1. Groundwork UK Groundwork UK is a national environmental charity which seeks to transform lives and places in communities in need The Federation of Groundwork Trusts had an aggregated turnover of £149 million in 2011-12

2. Reserves Policies for Charities Why do Charities need to hold Reserves at all? Charity Commission Guidance Groundwork UK’s Reserve Policy

3. The Effect of Inflation on the Reserves Policy Operating Costs will continue to increase Year on Year if inflation exists Reserves will need to increase to comply with the Reserves Policy

4. Assume 4% Inflation

5. The Effect of Low Interest Rates on the Reserves Policy If Operating costs are increasing at 4% due to inflation, reserves will also need to grow by at least this amount to comply with your Reserves Policy However, if bank interest rates are lower than this,say 2%, reserves will struggle to keep pace with increases in your operating costs

6. Inflation at 4% - Interest Rates at 2%

7. Investment Options Bank / Building Society (Low Risk / Low Reward) The Stock Market Property A mixture of the above in a managed fund The Horses (High Risk/ High Reward)

8. The Relationship between Risk & Return

9. Investment Considerations The need for cash in the short term Understanding the risk & return relationship The current level of reserves The Board’s appetite for risk What did Groundwork UK do? And was it a successful strategy?