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West Somerset Railway General Discussion

Discussion in 'Heritage Railways & Centres in the UK' started by gwr4090, Nov 15, 2007.

  1. Breva

    Breva Part of the furniture

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    Mr. Maxwell would agree with you here :)
     
  2. 35B

    35B Nat Pres stalwart

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    I think you mix a couple of important concepts. A charity's members absolutely can direct their trustees as to how they may use the charity's resources so long as they accept that in doing so they may be limiting the freedom of those trustees to act in the broader interests of the charity. One of those consequences is that being overly restrictive would increase the risk of insolvency, and thus of the funds having to be used to pay creditors - though I'd be concerned if any charity were run to anywhere near that point.

    The other concept is about cash reserves vs. accounting provisions. The accounting practice is as you suggest, but it is one that I think causes issues for certain sectors - including heritage. In a company, the depreciation captures the idea that the asset has worn down, and therefore the company is worth correspondingly less. In the heritage sector, that value of the company is of less importance as it is very unlikely to be sold. Instead, the availability of cash is much more critical, as it is ultimately cash that will determine whether or not the railway has a future. So, taking an NYMR example, we have Yorkshire's Magnificent Journey where the NYMR is quite rightly appealing for significant sums to repair (presumably long depreciated?) bridges.
     
  3. Big Al

    Big Al Nat Pres stalwart Staff Member Moderator

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    Haven't you just, by accident (or design) started to dig a new hole that nobody had thought of?

    I trust that you don't mean that appeal funds should just go into a large pot? Many people actually decide that their donation or bequest is ring fenced. Talk to the National Trust about their apparent massive wealth but how much of it is 'tied up' for various reasons.

    Your trading account should cover your day to day operations and when there are no operations, surely?
     
  4. Snifter

    Snifter Part of the furniture

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    The answer is quite simple in that should the membership elect us and then change their minds, there are solutions within easy reach. It's a small membership so only a few would need to agree that a meeting be called where the membership could then express their views. What could be fairer or more democratic than that ?

    More to the point, why are the usual suspects so afraid of openness and due process ?
     
  5. Lineisclear

    Lineisclear Member

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    How many heritage railways generate enough surplus to cover their annual expenditure? Precious few, if any. The nature of their seasonal business is that they depend on other sources of income, such as grants donations and bequests, to balance the books and sustain their cash position over the closed season. If a large chunk of that discretionary cash support is tied up in restricted funds they can all too easily run out of available cash. If donors really insist on donating to a restricted fund so be it, but it makes sense to encourage them to support the railway generally.
    My impression is that many of the challenges the WSR faces result from fundraising for specific projects rather than the needs of the railway. Inevitably cash is raised for the things donors find exciting when the need is for the mundane such as culverts, wet beds, bridges and embankments which may not look any different after the donated money has been spent.
     
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  6. Jamessquared

    Jamessquared Nat Pres stalwart

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    I disagree with this, in both parts.

    On the first, you have completely avoided the question of how having three charities on the railway simplifies things. You said above "Can we draw a distinction between the motives of the 10, which seem to me to be entirely honourable, and the means they are advocating to achieve them?" and yet here you seem to be distrustful of a merger precisely because of the means being advocated to achieve it. You have not explained why a merger is inherently a worse idea than having multiple charities; simply that you disagree with the means being put forward to achieve it.

    On restricted funds: I think you are ignoring donor motivation. This year has clearly been exceptional, and many railway charities have organised successful appeals to support general operational expenses, but in a normal situation I would be very mistrustful of donating where I didn't feel I had a significant say on which project the money was used for. For the same reason, I am a regular donor to railway charities but would not consider investing in a railway company. If you are making. donation, it should be called such, not an investment.

    In any case, charities can have both restricted and non-restricted funds. In our own case, the amount raised every year splits very roughly 50/50 into restricted and unrestricted, which leaves plenty available for wider support from the unrestricted fund. As an example, the Trust is funding parts of our track renewal programme. Charities can also turn down money if they feel the donation is for an objective that is unlikely to go forward.

    The fundraising tail wagging the operational dog is possible, but you would expect the owning charity, and its operating subsidiary, to have a high degree of unity over what the capital objectives were for the whole railway: if the operating company feels that undercover storage is a significant priority which can't be met from operating income, then the charity can create a ring-fenced fund in order to deliver it.

    Tom
     
    Last edited: Sep 18, 2020
  7. gwilialan

    gwilialan Part of the furniture

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    Do you actually understand how charities are required to handle specific donations?
     
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  8. 35B

    35B Nat Pres stalwart

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    Is that a consequence of the set-up, or the leadership? My impression was that, with occasional exceptions (notably Michael Rowe/@Maunsell907), the scale and implications of the wearing out of the fixed infrastructure were not acknowledged by the WSR plc management and directors until a crisis point in late 2018. While I'm sure that ring fenced funds may have made life harder in some ways, I'm not at all sure that they were a cause of the problem.

    There is also the question of how appeals (and the plural, I am sure, is something we'd both agree is part of the problem) have been run towards the WSR track repairs, appeals that have garnered significant amounts towards this unfashionable aspect of the railway.
     
  9. Bayard

    Bayard Part of the furniture

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    Once again, you seem to be making the error that donors are all the same, that they are giving money to "the railway" so that "the railway" can survive and prosper. As @Jamessquared has pointed out, this is seldom the case. By and large people give money for a particular purpose, that is why appeals are made that way: "We need £500K a year to renew our track", "We need £600K (or whatever) to provide covered accommodation for our carriages", "Sponsor a fishplate and help our extension to X", not "We need your money, give generously". Look at the success of the fundraising to overhaul 9351 or repair wagons for the Military Train. Fundraising for specific objectives works and the donors want to know that there money is going to be spent on that objective, not spent on the WIBNI de jour. The hard fact of the matter is, that if funds are not ring fenced and the money is liable to be spent elsewhere, the donations don't happen, or at least don't happen twice from the same donor. In any case, why is it such a disaster if the monies have to be returned to the donors? They'd probably be keen to donate them for something else if consulted. I'd be interested to know what happened to the £15,000 reportedly raised by the WSRA for the purchase of 4110. Was it given back? it should have been. I would have been bloody cross if I'd given £100 specifically to buy a steam locomotive and it was spent on something else. Ok "Inevitably cash is raised for the things donors find exciting when the need is for the mundane such as culverts, wet beds, bridges and embankments", but the point that you are avoiding is that by and large the cash raised for things donors find exciting is not cash that otherwise would have gone on mundane things, it is additional cash, cash the charity or company wouldn't otherwise have had, like cash in someone else's bank account, so it really doesn't matter that it's not available to spend on mundane things. Indeed to solicit cash for the exciting and then spend it on the mundane is a form of fraud.
     
  10. Piggy

    Piggy Member

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    Do we have a date for the September 2020 meeting of the PDG (WSR Partnership Development Group) ?
     
    Last edited: Sep 18, 2020
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  11. Roger Thompson

    Roger Thompson Well-Known Member

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  12. Lineisclear

    Lineisclear Member

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    I agree it would at least be deception if you raised money for one cause and spent it on another. That assumes you either invited or accepted donations for a restricted purpose.
    All the above is fine if the Company / Charity is generating sufficient cash to cover its outgoings. What do you do when you get to the back end of the closed season, you’ve run out of ready cash and there are bills due? If at that point you have lots of cash tied up in restricted funds you’ve got quite a problem that would have better avoided by maximising free cash reserves.
     
  13. 49010

    49010 Member

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    I fear that part of the problem is that Permanent Way is, in more ways than one, beneath the attention of many a visitor to a railway. They tend to look, understandably, at the Locos, the carriages, the freight train maybe, the Signal Boxes, Signals, Level crossing Gates etc, all the attention grabbing stuff. Sadly, they don't tend to look at the track but the permanent way is literally the bottom line in terms of actually having something to run on, but so easy to overlook both literally and figuratively. That, in a funny way is why I decided to join OAPWay at the Churnet Valley Railway - I'm more interested in substance than appearance if you understand me. That and a connection with the much missed Jeff Higginson, formerly of this parish.

    I remember saying on a related thread that when I visited other lines I always seemed to hear about projects being funded by grants but never seemed to hear about anything comparable at the WSR. I can't help thinking that the problems with PWay at the WSR now are in some measure, the inevitable consequence of attention being given to the WSR as a visitor attraction (e.g. on impressive gala lineups) and top line numbers but not enough attention to accessing grants to fund capital projects. I sense that the WSR is having to play catch up due to a deficit of attention on capital projects. I'm glad to see that Grant funding is now more in focus, and I hope that the WSR, which I love and have missed, is able to catch up quickly.

    To build a house you start by digging and laying foundations and for a railway that is the PWay - trackbed, bridges, culverts, 4 foot, 6 foot. Fingers crossed this will now get the attention that seems to have been missing.
     
  14. Piggy

    Piggy Member

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    Restricted Funds are just that, not for anything else. Like having your cake ....
     
  15. 35B

    35B Nat Pres stalwart

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    Which is fair, and a valid strategic choice. However, it presumes, as others say, that "the railway" is sufficient cause for people to donate the same amount. I disagree, however, that this is how fundraising works. Again, using the NYMR example, I have not donated to YMJ when I did donate to "Bridge to the Future" because I felt that the appeal, in the round, did not speak to me sufficiently. Structured slightly differently, my reaction may have been different.
     
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  16. Big Al

    Big Al Nat Pres stalwart Staff Member Moderator

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    Yes, I agree with you on that point but as I first read it I thought you were meaning something else, so apologies. That said, most railways do have a general donation fund and specific projects and some folk do lock in their bequests or donations to specific 'pet' ideas. The WSR family does seem poor at prioritising thereby trying to be all things to all people which in the heritage world is virtually impossible so you shouldn't try.

    And back to the vision (that to a lay person doesn't seem to exist on the WSR) that is precisely why something concrete is needed. Everyone seems to want their particular priority addressed - be it a milk dock, a locomotive, a coach, a station yard (or a section of track!). It would be great to see this all grasped firmly and a direction set that is good for the line even though it will not be popular with some. Too many teams pulling in their own direction at present including the 'none of the above' team!
     
  17. staffordian

    staffordian Well-Known Member

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    But I do think @Lineisclear made a good point a page or three back in how the National Trust deals with this issue.

    I'm not clear thought, how specific bequests might be dealt with if the will specifies a particular project. I guess this cannot be used for other purposes under any circumstances where active donations made where the possibility that in extremis it might be redirected is made clear up front.
     
  18. Jamessquared

    Jamessquared Nat Pres stalwart

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    Exactly. the railway seems to have no overarching strategy, and no governnce process to define such a strategy. If you get that, the fund-raising will naturally follow. Without a strategy, everything is bound to be scatter gun.

    Tom
     
  19. 35B

    35B Nat Pres stalwart

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    In the case of a legacy, the donor has significant control over what happens, which generally overrides the wishes of the receiving charity; in the case of an appeal, there is the ability for the charity to advise what will happen to donations in the event that the appeal is oversubscribed and/or unsuccessful. The donor would, however, retain the right to insist on repayment.

    All of which takes us back to the question of how a charity can organise itself to avoid getting caught up in these questions, and focus its fundraising in a way that means they aren't relevant. Which in turn means having and following a strategy.
     
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  20. Gladiator 5076

    Gladiator 5076 Well-Known Member

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    I remember a railway I was a member of making an appeal and saying if it was not successful then the funds would be used for something else. Stopped me donating, I would like to know that if I donate it is spent on something I want it spent on.
     
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