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Thread: Capitation Refund?

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    Capitation Refund?

    I see that TSA are expecting Capitation for 2020 to be covered by us and paid in full. Our District are "encouraging" us to levy Subs on parents for the terms when we are not running any practical activities nor meetings. This is because District and TSA need the money. This is a difficult one to sell to parents. I anticipate significant push back from parents - and I am inclined not to ask for subs. I can't rationalise the argument. 48% of our income goes to TSA in capitation fee... and we charge parents a very reasonable subs. But how can I say we need that money? Our activity is zero - we have no staff wages, we have no activity costs. We have establishment costs but I think our Group should swallow that loss. Likewise the TSA's costs will be reduced - if we have little activity nationally then their costs will be reduced. Their staff are possibly furloughed and their volunteers on a break. Yes they have ongoing and contractual costs (maybe they can sue the Compass developers and get £1.9m back) but not enough to justify crowbarring money from parents to pay for a Capitation fee. It just looks like Groups are bailing out TSA. I can see a situation that parents will leave Scouting because of it.
    Last edited by Paul o; 18-04-2020 at 08:22 AM.

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    It is quite simple - You pay for insurance, legal and safeguarding services. They still need to be paid.

    As independents, we still have to ay our insurance - fortunately, we have the reserves to cover the cost so we will not have to ask for anything till September, and if we go back in September we will be open to reducing fees and take the hit to get things back on the run again.

    We are all now in the very situation that none of us ever imagined would happen, having a Scout group with no income. Which is exactly why advise was given out in the past to try and establish a year's worth of reserves to cover just this scenario.

    The situation that you face is not easy and it is up to TSA to support groups through this. It is actually a good reason for embedding AMS in the subs and setting that amount aside when it comes in. Always allow more for AMS than you know will be asked for. Build a pot. Doesn't help you now, but perhaps something to consider in future. This is going to happen again, by many accounts.
    Ewan Scott

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    Quote Originally Posted by Bushfella View Post
    It is quite simple - You pay for insurance, legal and safeguarding services. They still need to be paid.

    As independents, we still have to ay our insurance - fortunately, we have the reserves to cover the cost so we will not have to ask for anything till September, and if we go back in September we will be open to reducing fees and take the hit to get things back on the run again.

    We are all now in the very situation that none of us ever imagined would happen, having a Scout group with no income. Which is exactly why advise was given out in the past to try and establish a year's worth of reserves to cover just this scenario.

    The situation that you face is not easy and it is up to TSA to support groups through this. It is actually a good reason for embedding AMS in the subs and setting that amount aside when it comes in. Always allow more for AMS than you know will be asked for. Build a pot. Doesn't help you now, but perhaps something to consider in future. This is going to happen again, by many accounts.
    I don't have a problem with our costs - it is the capitation fee that is unjustifiable. Your argument suggests the £3000+ capitation is entirely spent on insurance, "legal" and safeguarding services. Does TSA have no other costs? Of course it does, and most are scalable downwards. I can't go to parents and say you won't see us for 6 months but HQ want you to pay for their insurance and legal fees. The only reason we would be levying subs would to bail out TSA.

    We are a Scout Group that have a sinking fund for emergencies so we can exist without subs for a year. As for our own insurance - we reduced our annual insurance from £2400 to £600pa, when we looked elsewhere other than Unity who are a tied agent. So we are prepared.

    As for support from TSA - I don't see levying a full capitation fee as help at all. Capitation is by far the single biggest expense for most Groups. What sort of help are you suggesting they will offer?

    As a comparison, I have experience of 2 private schools in a similar position... they have to retain their staff and have significant establishment costs - one school has reduced termly fees by 50% (which I though was very generous to parents) and the other reduced by 10%.
    Last edited by Paul o; 17-04-2020 at 07:08 PM.

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    Without looking at annual accounts, I would imagine TSAs costs are:

    Staff- many of whom could be furloughed (there will be a need for some core services plus basic ongoing maintenance at the activity centres)
    Insurance (liability, premises, vehicles)
    Contracts (IT, payroll services, etc)
    The pension deficit
    Existing commitments for building work and maintenance of premises

    I've always thought that the centres, events, etc should be self funding. I assume insurance is a fairly big bill but surely it can't be more than £10/member?!

    Tsa gets income from it's centres, events, BP house, unity and scout shops as well as AMS... I've always wondered what it fritters this away on!

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    Do we need to consider what our subs are? If we were charging for a service then we would not be able to gift aid it so therefore do you actually need to be weekly sessions to warrant requesting a payment?

    Membership subs is really a form of donation towards the running of the group.

    We have chosen not to request subs but will review this every half term. At some point we have to say that you need to pay to maintain membership, even if we decide it is not full amount.


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    Quote Originally Posted by GSL-Baloo View Post
    Do we need to consider what our subs are?
    Parents don't see Subs as a club membership. It is for the meetings per term. If we don't run Scouts then they will quite reasonably expect that we don't charge them subs. That is fine by me as Treasurer as we can cover our establishment costs (reduced through lockdown) and our activity costs are now reduced to zero. The rub is when TSA don't see it that way and won't reduce their Capitation - then that puts financial pressure on all Groups, in my view, unreasonably.

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    Quote Originally Posted by campwarden View Post
    Without looking at annual accounts, I would imagine TSAs costs are:

    Staff- many of whom could be furloughed (there will be a need for some core services plus basic ongoing maintenance at the activity centres)
    Insurance (liability, premises, vehicles)
    Contracts (IT, payroll services, etc)
    The pension deficit
    Existing commitments for building work and maintenance of premises

    I've always thought that the centres, events, etc should be self funding. I assume insurance is a fairly big bill but surely it can't be more than £10/member?!

    Tsa gets income from it's centres, events, BP house, unity and scout shops as well as AMS... I've always wondered what it fritters this away on!
    There is a plenty of scope for reduction in costs there: staff could be furloughed. Events should be self funding normally so loss of income is not an issue. Activity centres mothballed for 9 months. Unity are just staff and I assume profit comes in regardless. SATC can be mothballed for 12 months and no-one would notice the difference.... so yes it does make you wonder why our capitation is the same irrespective of whether we run Scouting or not!

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    Quote Originally Posted by Paul o View Post
    There is a plenty of scope for reduction in costs there: staff could be furloughed. Events should be self funding normally so loss of income is not an issue. Activity centres mothballed for 9 months. Unity are just staff and I assume profit comes in regardless. SATC can be mothballed for 12 months and no-one would notice the difference.... so yes it does make you wonder why our capitation is the same irrespective of whether we run Scouting or not!
    I forgot about SATC... although if i remember correctly they charged groups for the work they do? Maybe now would be a good time for them to catch up on the backlog. I certainly wouldnt mothball them as there's probably some groups still carrying on lease negotiations in the background. Would hate a group to lose the lease renewal on their land because SATC was closed!

    Activity centres can't quite be mothballed... grass still needs cutting - if its left to go wild it will cost a lot of time and money to get it back to a good standard - far more cost effective to keep on top of maintainance. Same goes for preventative maintenance on buildings etc. Most of my friends in the private campsite industry are still keeping their sites "ready" for campers - partly so they can reopen as soon as they are allowed, and partly because its more effective than letting a site go wild and trying to get it back.

    The vast majority of staff could be furloughed. They've suspended DBS checks, and there should be very few new safeguarding cases, so the safeguarding team could be reduced to a core. All regional development staff could be furloughed. The same applies to the paid programme staff, all activity centre instructors and anyone not required for key maintenance, all the conference team at Gilwell (apart from maybe one person to manage any 2021 bookings coming in). And staff can probably be reduced at scout shops as I doubt many people are putting in uniform or badge orders at the moment.

    The biggest saving of course could be made by furloughing the CEO.

    TSA is a very inefficient charity - most big charities are. Vast amounts are wasted at HQ while the grass roots struggle. Ask anyone who works or volunteers for any of the big national charities - the RSPCA, RNLI, St John Ambulance, etc and they'll all say the same. Walk along City Road in London and see just how many charities have large London HQs... when they could save a fortune by having their head office on an industrial estate in the midlands or the north and not paying london rental, london staff weightings, etc.

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    Charitable organisation crashes in to provider of children's services.

    TSA made this bed, and we're all having to lie in it.

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    Quote Originally Posted by campwarden View Post
    ......
    TSA is a very inefficient charity - most big charities are. Vast amounts are wasted at HQ while the grass roots struggle. Ask anyone who works or volunteers for any of the big national charities - the RSPCA, RNLI, St John Ambulance, etc and they'll all say the same. Walk along City Road in London and see just how many charities have large London HQs... when they could save a fortune by having their head office on an industrial estate in the midlands or the north and not paying london rental, london staff weightings, etc.
    I agree with everything you say - except I disagree that grass roots struggle, every group I know is charging subs to cover costs and sectional activities and has a reserve. Most do some form of limited fund raising. I don't think many struggle financially.

    Where they do struggle of course is in recruitment of leaders. But in 10 years of being DC and assisting practically every group locally at some point when they were struggling for leaders, I have never found anything better than persuading the parents and hoping (often rightly) that they will enjoy it enough to stay. And we tried paid advertising, volunteer fairs, news stories, social media, village magazines and posters, taaster days and camps, village fetes - at the end of the day all they ever did was bring in more youth !

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    Quote Originally Posted by RisingStar View Post
    I agree with everything you say - except I disagree that grass roots struggle, every group I know is charging subs to cover costs and sectional activities and has a reserve. Most do some form of limited fund raising. I don't think many struggle financially.

    Where they do struggle of course is in recruitment of leaders. But in 10 years of being DC and assisting practically every group locally at some point when they were struggling for leaders, I have never found anything better than persuading the parents and hoping (often rightly) that they will enjoy it enough to stay. And we tried paid advertising, volunteer fairs, news stories, social media, village magazines and posters, taaster days and camps, village fetes - at the end of the day all they ever did was bring in more youth !
    I can think of struggling groups. Often thus is due to an ineffective exec though. But I was at that point talking about UK charities in general.

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    Quote Originally Posted by Paul o View Post
    Parents don't see Subs as a club membership. It is for the meetings per term. If we don't run Scouts then they will quite reasonably expect that we don't charge them subs. That is fine by me as Treasurer as we can cover our establishment costs (reduced through lockdown) and our activity costs are now reduced to zero. The rub is when TSA don't see it that way and won't reduce their Capitation - then that puts financial pressure on all Groups, in my view, unreasonably.
    Then your parents need to be appraised of the situation. That we are part of a national organisation that provides services to us the members, and we pay for that through an annual membership fee which we've been told will still have to be paid regardless. There was an email from Tim Kidd suggesting maybe groups could explain, charge zero subs, but parents could make a donation for this term, which I guess then could be gift aided. On the other hand, if you're running virtual meetings, setting badge work, encouraging camping at home, etc etc. Then why not charge for it? Parents aren't stupid (steady at the back), they know you'll still have costs, and membership fees is one of those.

    Charity commission advice is to have a year of reserves in case you have some time with no income. So here we are, potentially some time with no income.

    And actually, you're saying 48% of your income goes to AMS. And it's £3000 a year. So let's assume this term is a right off. So you're down £1000. Poor show if you haven't got £1000 in reserves. Now, I know, you could do a lot with £1000. But there it is. You won't be looking for £3000 next Jan, you should have £2000 of it collected already.

    As far as I know, HQ have furloughed a load of staff, but still keeping some for the info centre, and some for essential teams like safeguarding.
    They'd also have to keep paying pensions, and if there are any mortgages on properties. And the value of any investments are probably down about 20%+
    Let's assume that they made a healthy surplus from scout shop sales, which have dropped from ever member buying uniform to a few leaders buying hoodies and t-shirts in the sale.
    Let's assume they made a surplus from leasing BP house to Meninger. Wonder if they're still forcing them to pay that?
    Let's assume they made a surplus from their activity centres, that did have paid staff but also quite a lot of free labour from volunteers. Income: zero. Expenses: Permanent paid staff.

    But actually, though I assume the info centre is probably an awful lot quieter, and they will be getting nearly zero accident forms, they are still having to provide the services they always have, at a lower level but still.

    Yes, they will have reduced some costs, but a quick finger in the air looking at the annual report suggests they're going to lose 2/3 of their income. No way they're going to be able to lose 2/3 of their costs. And you're suggesting they don't collect their only remaining source of income, membership fees? Well that's another £11m hole in the income! I'm betting even with collecting all the AMS they'll have to dip into reserves to stay afloat this year.
    Ian Wilkins
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    Quote Originally Posted by Paul o View Post
    There is a plenty of scope for reduction in costs there: staff could be furloughed. Events should be self funding normally so loss of income is not an issue. Activity centres mothballed for 9 months. Unity are just staff and I assume profit comes in regardless. SATC can be mothballed for 12 months and no-one would notice the difference.... so yes it does make you wonder why our capitation is the same irrespective of whether we run Scouting or not!
    I think that you might be surprised by the insurance costs. Unity is expensive - even allowing for a discount to TSA from its commercial rates. We were quoted over twice the cost of the commercial cover that we have, for a lower level of cover on fewer activities. I would guess that Unity insurance costs to TSA are around £15 per head. SATC costs to TSA are, I believe minimal as all they do is hold property in trust. There are minimal management fees. There are costs that we don't see - NDA agreements in settlement of complaints, for example, office costs - remember Charities have not been forced to close and staff can still work.

    Having said all that... If TSA has been advising that we hold a year's worth of reserves, they should, in theory, be able to run for a year with no income... As I said, at this time, I think that TSA should be supporting its members.

    I cannot get a rebate on the insurance of my car that is not in use. I cannot get a rebate on youth group insurance. I suspect that Unity will not be able to give a rebate on its premiums.

    Also, in 26 years, I have never had a single parent ask about the AMS - we explain it in black and white in the subs invoice. We make it clear that they pay for the term, including insurance contribution. We have had to cancel a paid-for kayak session - no-one has asked for their money back. We have lost 8 meetings from this term, no-one has asked for a refund.


    Operating at the bare essentials, Insurance and BC membership fees - I think that our Navigator group could "run" for maybe 10 years without income - but we would eat into our funds reserved for big events. The problem, if the coffers of a group are empty at the end of a prolonged social distancing that prevents us running (and I'm generalising here not suggesting a 10-year lockdown) is geting the momentum going again to attract members and leaders alike.
    Ewan Scott

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    Quote Originally Posted by ianw View Post
    Then your parents need to be appraised of the situation. That we are part of a national organisation that provides services to us the members, and we pay for that through an annual membership fee which we've been told will still have to be paid regardless. There was an email from Tim Kidd suggesting maybe groups could explain, charge zero subs, but parents could make a donation for this term, which I guess then could be gift aided. On the other hand, if you're running virtual meetings, setting badge work, encouraging camping at home, etc etc. Then why not charge for it? Parents aren't stupid (steady at the back), they know you'll still have costs, and membership fees is one of those.

    Charity commission advice is to have a year of reserves in case you have some time with no income. So here we are, potentially some time with no income.

    And actually, you're saying 48% of your income goes to AMS. And it's £3000 a year. So let's assume this term is a right off. So you're down £1000. Poor show if you haven't got £1000 in reserves. Now, I know, you could do a lot with £1000. But there it is. You won't be looking for £3000 next Jan, you should have £2000 of it collected already.

    As far as I know, HQ have furloughed a load of staff, but still keeping some for the info centre, and some for essential teams like safeguarding.
    They'd also have to keep paying pensions, and if there are any mortgages on properties. And the value of any investments are probably down about 20%+
    Let's assume that they made a healthy surplus from scout shop sales, which have dropped from ever member buying uniform to a few leaders buying hoodies and t-shirts in the sale.
    Let's assume they made a surplus from leasing BP house to Meninger. Wonder if they're still forcing them to pay that?
    Let's assume they made a surplus from their activity centres, that did have paid staff but also quite a lot of free labour from volunteers. Income: zero. Expenses: Permanent paid staff.

    But actually, though I assume the info centre is probably an awful lot quieter, and they will be getting nearly zero accident forms, they are still having to provide the services they always have, at a lower level but still.

    Yes, they will have reduced some costs, but a quick finger in the air looking at the annual report suggests they're going to lose 2/3 of their income. No way they're going to be able to lose 2/3 of their costs. And you're suggesting they don't collect their only remaining source of income, membership fees? Well that's another £11m hole in the income! I'm betting even with collecting all the AMS they'll have to dip into reserves to stay afloat this year.
    If they're not making a surplus from leasing BP house then that would suggest a very bad arrangement. It's a central London property worth a lot of money. If it doesn't usually run at a profit it's being mismanaged. Wouldn't put it past TSA.

    I'm not saying TSA shouldn't still be charging some AMS, but I'd hope they are keeping their costs to a minimum at the moment

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    as we ar running weekly mettings with which kids are interacting sp we find it pretty easy to ask for half fees which covers (as we explain) their AMS and some ongoing costs to make sure we have a building and kit to go back to. We are kicking in some from our reserves too and explianing that.

    we are also making it very very easy for a parent not to pay the £25, we know some parents now have vastly changed circumstances.

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