Appendix 1: Financial Analysis
Small Society Definition
A small society is one whose income is less than its expenditure. No allowance is
made for possible surplus income in the Activities Account arising from visits, study
days etc. Calculations suggest that a society with fewer than 180 members falls into
this category.
Typical Societies’ Annual Income/Expenditure 2014
Membership
INCOME
Membership subs.
@ £40
Visitors fees @ £7
Catering
Bank Interest
TOTAL
EXPENDITURE
Lecturers’ fees
Hall hire
Affiliation fees @
£12
Pools Fares
Areas fees
Admin.
Insurance
Sundry Extras
TOTAL
Surplus
180
250
350
450
7200
10000
14000
18000
420
100
30
£7750
420
150
50
£10620
500
250
100
£14850
300
350
150
£18800
3653
965
2160
3653
965
3000
3653
965
4200
3653
965
5400
163
56
600
105
50
£7752
Nil
163
56
600
150
113
£8700
£1920
163
56
700
200
163
£10100
£4750
163
56
800
250
163
£11450
£7350
This table presents an analysis of the budgets of societies of different sizes, based
on an average annual subscription fee of £40 and the current affiliation fee of £12
per capita. It is assumed that a membership of 180 is about the break-even point for
small societies and that societies with fewer members would find it impossible to
produce a surplus without additional fund raising activities.
The table demonstrates by extrapolation, how the larger the membership of a
society, the easier it is to produce an ever increasing surplus. This is because the
major fixed costs such as lecturers’ fees and hall hire remain the same whilst the
extra income generated by increased membership fees more than covers additional
costs of affiliation fees, administration and other routine expenditure.
To rectify this imbalance, our proposed model would, therefore, be based on a two
tier scale of charges, though we recognise that this is not the only possible model.
1
Two Tier Affiliation Fee Proposal
Current situation
There are 362 societies in the U.K. Of these 75 have fewer than 180 members and
probably operate at a loss on the income and expenditure account.
Currently, there are 90,859 members in total of which 10,184 are in small societies.
The total current affiliation fee income based on the numbers above, at a rate of £12
per member, is £1,090,308.
If the 10,184 members in smaller societies pay at a reduced rate of £6 this will
reduce the total income by £61,104. If this shortfall were passed on to the large
societies, each member would pay £12.76p, an increase of 76p.
Calculation
Current model (£12 per member)
Current Affiliation Income = £1,090,308 (90859 members)
Proposed Model
In our proposed scheme, we suggest a new rate of £6 pa for each member of a
society with fewer than 180 members and £12.76 in respect of a member of a
society with more than 180 members.
10184 members @ £6 = £61,104
80675 members @ £12.76 = £1,029,413
Total Income = £1,090,517 (compared with £1,090,308 under previous system)
We do not consider that the increase of 76 pence per member would be detrimental
to the larger societies. For example, a society with 350 members and a current
surplus of £4700 would pay an extra £266. This would not affect a large society’s
ability to prosper. Indeed, as demonstrated, the larger the society, the less significant
would be the impact of increased fees. By the same token, a small society of 150
members would save £900 which would greatly assist its finances.
Examples:
Henley DFAS : the largest society with 625 members currently pays £7500 in
affiliation fees but would pay £7975 under the new scheme
Budleigh Salterton DFAS : a medium sized society of 254 members currently pays
£3048 but would pay £3241 under the proposed model.
2
Tor Bay DFAS : the smallest society with 66 members currently pays £792 but
would save £396 under the proposed scheme
3