About the Charity
Chen Su Lan Methodist Children’s Home provides shelter, care and protection to boys and girls between 5 and 21 years old who come from low income, broken, dysfunctional or abusive families in Singapore.
7 VITAL SIGNS
Vital Sign 1: Financial Health
Ratio of Liabilities to Assets
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This ratio tells us how much of the charity’s assets come from borrowing money or other sources of debt. The lower the number, the more financially strong the charity.
According to our analysis, this number indicates excellent financial strength
The Home is in a very good position to pay off what it owes (to staff, vendors etc.) if the debts suddenly fall due
The Home has been accumulating cash, which is a good sign of its short term financial health
Working Capital Ratio
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“If the charity’s short-term debts suddenly become due immediately, will it be able to pay them”?
A ratio higher than 1 means that the charity has enough liquid assets like cash that can be used to meet its short term debts. The higher the ratio, the more resilient the charity is.
Increase in Cash and equivalents
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This tells us about the financial health of the charity. No matter how much surplus the charity makes, it is likely to collapse if it runs out of cash to pay its bills. A positive value is a healthy indicator
Net Surplus over 3 years
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“How much surplus did the charity have at the end of the year, subtracting its expenses?”
While charities are non-profits, a financially healthy charity should still carry over some surplus each year to grow its reserves. This is important, so that the charity can continue to run even if its funding sources are affected.
A charity that continues running deficits yearly would deplete its reserves and be unsustainable in the long run
Reserves help ensure the financial stability of a charity, and ensure that it can continue to deliver its services even where unexpected circumstances arise, such as a downturn in fundraising or unexpected costs. Reserves are also used to fund new initiatives or improvements that will ultimately help the charity's beneficiaries.
Here, the Home has been continuing to grow its reserves every year, which is a sign of good financial management. With growing reserves, the Home is better able to respond to unexpected circumstances, and is better able to take on projects to improve its services to residents.
Note: The sharp increase in surplus carried over in 2020 was due to one-off government initiatives such as the Bicentennial Community Fund as well as Covid-19 funding initiatives such as the Job Support Scheme. Also, many of its activities were curtailed as a result of the pandemic resulting in a decrease in expenses and more surplus carried over as a result.
Vital Sign 2: Sources of Income
Charities receive money from a variety of sources which include public donations, grants and government contracts. What are this charity’s sources of income over the years?
Sources of Income in 2018-2020
What do these mean?
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This include social welfare grants from various sources such as the government, Tote Board, Community Chest etc.
The charity receives program grants as part of funding agreements signed with MSF and NCSS.
The amount of funding from these sources has remained relatively stable, which is a good sign as it indicates financial stability.
This includes public cash donations, and non-cash gifts in kind by the public
Donations from the public account for 20% of the Home's income stream.
This includes income not recognized in the categories above, including interest earned from keeping cash in the bank.
The sudden increase was due to one-off grants received from the government such as the Bicentennial Community Fund as well as Covid-19 funding initiatives from the government such as the Job Support Scheme.
Sources of Income in 2020 - Our Analysis
Chen Su Lan Methodist Children’s Home received $4,804,660 from various social welfare grants. This represented 58.8% of the total income receipts for the year. The large amount of grants indicates that government organizations endorse and support the charitable work done by the Home.
Despite being supported by grants, a significant portion (about 1/5ths) is derived from public donations.
The “other income” category was exceptional due to one-off government grants and Covid-19 supports in this year.
Vital Sign 3: Sources of Expenditure
Charities spend money on various sources including their charitable programmes, staff expenses, administrative costs, etc. What are the biggest contributor's to the charity's spending over the years?
For this charity, the major contributors of expenses were Home and Programme expenses, as well as salary expenses
Home and Programme Expenses
The numbers fell slightly in 2020.
For Programme Expenses, the dip was a result of activities which were curtailed during the year due to the Covid-19 pandemic.
The dip in Home Expenses was attributed primarily to lesser donations of food in kind during 2020.
Staff expenses rose significantly in 2020, compared to previous years.
The Home recruited more staff towards the end of 2019 (these were budgeted headcounts).
In 2020, the Home recruited more contract staff to help out in the dormitories, due to split-team arrangements imposed by Covid-19 measures.
Over the past 3 years, the Home has added a therapy team for the clinical work to be done for the children. Most of the case workers in the Home are also more qualified with either a bachelors or master’s degree.
Sources of Expenditure in 2020 - Our Analysis
Expenditure on fundraising was minimal this year, due to restrictions on fundraising brought by the pandemic.
Overall, the increase in expenditure for staff salaries demonstrates that the Home is expanding its operations to provide better quality services for its beneficiaries, which is a good sign.
We anticipate that in the future, with the lifting of activity restrictions imposed by COVID-19 measures, the Home's expenses will continue to increase. Apart from the above, the Home also incurs expenses in upkeep and maintaining its premises. The Home will continue to require more income to sustain its operations and serve its residents.
Vital Sign 4: Fundraising Efficiency
“How much does the charity spend in raising donations from the public?"
The lower the figure, the more efficient the charity is in raising public donations. A lower number is generally a positive sign, as it means less wasted costs in fundraising.
Fundraising Efficiency over the years
The spending on fundraising declined sharply in 2020, due to the Home being unable to host public fundraising events as a result of the pandemic. This figure should be viewed as an outlier.
In the preceding years, the figure has been relatively low – this is a very good sign as it shows that the Home is not spending excessively without return in obtaining donations from the public.
Vital Sign 4: Fundraising Efficiency
Vital Sign 5: Spending on
“What proportion of the charity's spending goes to direct outcomes?"
We are interested in knowing how much of our donation goes to the actual beneficial outcomes that beneficiaries enjoy. The greater the figure, the more likely every dollar we donate directly goes to benefitting the charity's beneficiaries.
For this charity, the programme, home and salary expenses directly go to benefitting the residents of the home. We will look at this figure over the years.
Over the years, the proportion of the major components of the costs (staff costs and programme costs) have been quite stable.
Quite a significant part of the expenses come from staff costs, which are an essential part of the Home's services. The Home employed 88 staff as of the end of 2020, with about 60% being involved in the direct care of children and youth.
In our view, this figure is the greatest strength of the charity - the vast majority spending goes to direct outcomes for its residents. Donors can be assured that their donations will have a direct impact on the residents of the Home.
Vital Sign 6: Number of Beneficiaries Served
"How many beneficiaries did the charity help?"
In assessing how impactful a charity is, it is always useful to look at how many beneficiaries benefitted from the charity. This also helps to put the charity's needs and expenses in perspective - a charity that provides more services, or serves more beneficiaries would naturally require more donations and funding.
In 2020, the Home served a total of 90 residents and ex-residents and their families
The Home currently houses 69 residents in the home. It continues to provide post-discharge care and support for its former residents
In 2020, through the Home's education programmes, 13 candidates passed their national examinations and were posted to the secondary school or higher education institution of their choice.
Vital Sign 7: Non-Financial Needs
"Apart from donations, how else can I support this charity?"
Currently, the Home has about 93 volunteers serving in various capacities
The Home requires volunteers to guide and supervise children with schoolwork, support logistical provisions, and lead care groups by providing pastoral care
Donations in kind
Apart from financial donations, the charity also appreciates donations of meals and groceries