Please feel free to continue submitting your questions to emergency.appeal@jst.org.uk  We will try to address as many of them as possible in the days to come.

  • Why such short notice and how has this come about?

    The JST has not operated with any significant reserves since Tenacious was built and has been working hard to increase our income to allow this to happen. In 2015, Trustees set an aim of building reserves of £0.5m which would help sustain the JST in the event of any unplanned expenditure and support future investment needs.

    Under a two ship model, the JST is unlikely to build an operating reserve until we reach c. £4.5m, which would be the level of income and expenditure that would allow us to operate a full, proactive, planned maintenance programme. This would allow us to address maintenance issues on the ship before they materialise in service.

    This £4.5m number is much greater than what the trust has spent historically. This is because the JST needs to catch-up on some deferred investment on the ships. It also reflects an increase in the age-related running costs of both vessels, the impact of operating in an increasingly regulated environment (onshore and offshore) and increased investments in fundraising, which are necessary to grow income and compete in an increasingly competitive charitable environment.

    We set about growing income by introducing a partnerships programme. We chose to launch this programme because it would improve our earning from activities onboard the ships and also increase our charitable impact. Earning would increase because partner projects were intended to be self-funding (generating c. £55,000 per week) and would contribute almost double the income than public voyages, which are 50% subsidised by the JST’s fundraising. They would also increase our impact by helping us reach, and work with, new groups of beneficiaries.

    The JST has also considerably strengthened our Fundraising Team – and continues to do so – so we can raise funds from higher value applications and major donors, alongside our more established gifts from smaller contributors.

    The combined impact of this work has increased our core income by around £1m per year. Reflecting this, our forecast (unaudited) results for the financial year ending March 2019 will see a break-even result, with income and costs balanced at £3.9m. This is over a £1m more than our average income in the period FY11 to FY14 but, despite this progress, the JST is still c. £0.5m short of its income target and has, as a consequence, still been unable to build the reserves it needs.

    Without these reserves, the JST is vulnerable to shock and in the last 18 months, financial pressure has increased because of a number of unplanned engineering works (£700k of unplanned engineering works during late 2017/ early 2018) on both ships. These have totalled c. £1m. As we have not had the funds readily available to service this work, our trade creditor balance (debts owed to people who have provided us with goods or services) has increased significantly. One key test of solvency is being able to pay your debts when they fall due, so it is important that the JST can show continued progress in reducing trade creditor debts.

    For the past year, JST has been just about getting by month-to-month, but the situation worsened towards the end of 2018, when we had turnover in two critical income roles during an important time of year before Christmas, which is a peak fundraising period and also when we close out our partnership agreements for the following year. We arranged interim coverage within six weeks, but the impact of this has been slower conversion of some partnership and major gift opportunities this year. Further engineering issues have added to the pressure.

    In June, two key pieces of funding (with a total value close to £200k) were deferred. Without any reserves to draw down upon, this meant we were struggling to service our core costs in June. Furthermore, a number of our trade creditors were seeking urgent payment and it is the combination of these issues that forced the Trustees to initiate an emergency fundraising effort.

  • If we raise the £1m, will it be enough to secure the JST's future and stop this happening again?

    Now that we have hit our £1m target, it will give the trust much needed resources to start addressing/negotiating the organisation’s aged creditor balance (debts). It will also provide the working capital needed to stabilise the JST’s finances in the short-term.

    The Trustees statement on Monday July 22nd outlines further changes planned to improve the service we offer beneficiaries and stabilise the JST finances in the medium to longer-term. These changes will, undoubtedly, create a new set of challenges. However, as you would expect, the Trustees will explore every option and are primed to take whatever action is necessary to safeguard the organisation’s mission.

  • What are the managers of JST paid?

    As required by the Charities Statement of Recommended Practice (SORP), salary information for everyone earning over £60,000 must be disclosed in our Annual Report and Accounts in note 7, which are submitted to the Charity Commission annually and available publicly. Substantial changes have since been made to the organisation in terms of staffing so our annual salary expenditure is much lower this financial year. Under GDPR laws we are unable to share specific individuals salaries, but the SORP requirements are there to offer transparency in terms of salary expenditure. There is also a note in the accounts starting on page 31 which shows how salaries are governed and benchmarked by the Trustees, again this is a SORP requirement for all charities.

  • Have managers of JST been paid bonuses?

    No, per Fundraising Regulator Guidelines, the JST does not pay bonuses to managers. This policy has been consistent for at least the past 5 years.

  • Do Trustees get paid a salary or claim expenses?

    Per Charities Commission guidelines there are very limited situations where Trustees can charge for their services (e.g. the provision of professional advice). They are also entitled to claim reasonable expenses. The JST is compliant with this regulation and very fortunate to have Trustees that fully volunteer their time, working for the JST fully at their own personal expense. No Trustee expense claims have been made for at least the past 3 years.

  • Why is there such a delay between the fundraising and announcing the plans for the future? £1million in 5 days was made out to be an emergency but then having 2 weeks to consider the options does not seem to be in line with the "Emergency" messaging.

    As you would imagine, we have been taking restructuring advice over the past several months to ensure that the Trustees have acted appropriately in managing the JST’s on-going financial pressures. We now continue to take advice so we can act on the Emergency Appeal success in the most responsible way possible, considering the needs of the JST’s creditors, donors and beneficiaries. 

    Reflecting this, the reason for the two-week “pause” after the appeal was to allow the Board to update our plans, based on the fundraising appeal outcomes, and then pressure test them internally and externally. This will help JST use the funds received in the most appropriate and impactful way. 

    To help facilitate this, a number of contributors to the appeal kindly gave the Trustees permission to use their donations to provide working capital during this two week period, so that this important work could be done without detriment to the JST’s activities or creditors. 

    Another factor is that we are also still in the process of receiving some of the larger donations, which have been pledged by individuals and institutions with more complex and lengthy processes for transferring funds. Most of the online donations, via Just Giving, are not received immediately, as this happens on a fortnightly cycle by standard procedure.

    Per the recent Trustees’ Statement of July 22nd, funds are now being cautiously used as plans continue to be refined and validated.

  • Why is the JST deciding to take one ship out of service?

    For the past nineteen years, we have been working hard to make a two ship model work, as we have always believed it to be in the best interests of our mission and stakeholders. Over recent years, many steps have been taken to try and ensure two ships can be kept in service (See answer to “Why such short notice and how has this come about?”).

    However, despite this progress, the Trustees are now of the view it is too expensive and financially challenging to continue operating two ships. The future planned costs to sustain a two-ship fleet are too high, as are the monthly running costs compared to the income we can reliably predict. As a result, moving to a one ship fleet will improve the JST’s financial sustainability by significantly reducing the organisation’s overheads and cash needs, both onshore and offshore.

    Despite the reduction in overall capacity, moving to a one-ship model has the potential to increase the JST’s charitable impact by allowing us to have a more rigorous application process to determine which crew will sail with us, and by focusing our charitable resources on those who would most benefit from one of our transformative, life-enhancing voyages.

    A single vessel will also help the JST deliver a much stronger voyage experience by concentrating investment into crew training, professional development, along with ship maintenance, and other elements that improve life on-board (e.g. upgrading adaptive technologies).

  • Why was it decided to keep Tenacious in service as opposed to Lord Nelson?

    We appreciate that both JST ships are much-loved and have a loyal following. However, the consideration of which vessel to retain had to be taken on purely objective factors and with our beneficiaries in mind. Both ships are also maintained to a good standard, would be viable options for future use and have pros/cons of continued service.

    However, Tenacious has been chosen to deliver the mission because she is fifteen years newer, has a lay-out more suited to a variety of activities and has a more modern presentation in accordance with the rising expectations of those who sail with the trust. Based on our best view, she will also require less capital investment for the foreseeable future. 

    Despite the fact she is a larger ship, the operating costs for both vessels are similar and any variance will be driven by capital investment needs in the future. Similarly, the challenge of operating a vessel over 500 tonnes is less of a factor if we are operating a single ship fleet. 

    Finally, Tenacious has a much larger going concern balance sheet value (£3.7m vs. £2.2m) and this is a consideration given the value of loans secured against both vessels and continued balance sheet solvency.

  • Why was it decided to take Lord Nelson out of service so quickly? Would it not have been better to wait until after Tenacious' Special Survey?

    The timing of Lord Nelson’s decommissioning was carefully considered, both from the perspective of the JST’s beneficiaries and finances. Many factors contributed to the pros and cons of each scenario. Factors included the running costs for the ship, the costs of refunding changes in a voyage programme, the support staff required etc. 

    Per the Trustees’ statement, the most advantageous scenario was to take Lord Nelson out of active service from early October 2019.

  • Is this an outcome of poor management?

    We set about developing and increasing our income by introducing a (high yielding, high impact) partnership income stream to complement our public voyages and by also strengthening our Fundraising Team so we could set about pursuing higher value funding applications and major gifts. The combined impact of this work has increased our core income by over £1m per year – taking us much closer to these target earning levels, but we are not quite there yet, meaning our funding environment has continued to be extremely tight without any operating reserves. The recent financial challenges arose despite this progress and reflect the vulnerability of the JST’s position despite very proactive steps to improve its financial standing. 

    The JST Management has always had high levels of financial oversight and scrutiny. A sub-group of Trustees with significant business experience meet monthly to discuss the JST finances. They are supported by three independent advisors, who are all respected and very experienced accounting professionals. The management team reports back to this group weekly.

  • What is JST doing about lower booking levels?

    Over recent years the JST has made various changes to its mode of operation to improve occupancy, including: the introduction of partner voyages, more varied international programmes, the use of channel partners to promote voyages and enhanced approaches to marketing/ awareness building.

    The JST has also established working relationships with other sail training operators, industry bodies and associations. We are currently collaborating with them to develop coordinated market approaches to programming and partnerships, which optimise supply/demand across the sector.

    As part of the current strategic review, the JST will be considering further steps to ensure our mission is effectively delivered. It is expected that a single ship fleet will deliver very high levels of year round occupancy and, as a consequence, the consistently high quality experience this will bring beneficiaries.

  • Are JST voyages simply too expensive?

    The JST has two types of activity: partnership voyages and those open to the public. At present, the partner voyages generally cover their costs whereas the public voyages are subsidised by JST’s fundraising and run at a significant loss, even with the contributions from the voyage crew which typically represent 40-60% of the true voyage cost (c. £180-200 per person, per day, dependent on the voyage). 

    This latter model is not sustainable, even at 100% occupancy, so there are long-standing structural issues with this contribution model that will need to be addressed in our future plans. We also need to ensure our charitable funds are put to good use and it is increasingly difficult to defend subsidies for people outside our core beneficiary groups (people with disabilities, those facing financial disadvantage and young people). 

    We would argue that £200 per person per day / £1,400 per week is a very reasonable investment in a voyage given the transformative, life enhancing experience that the JST offers. Our future plans will need to address these issues and create clearer alignment between our charitable objectives and voyage crew contributions.

  • Was the global expansion (Australia & NZ) responsible for the current situation?

    No, solvency issues may have arisen much sooner without the overseas deployment of Tenacious. Taking Tenacious away from the UK/European market provided a much improved uplift in capacity utilisation across both the JST’s vessels. It also opened up new sources of funding and significantly grew the fundraising contribution to the trust.

  • Is the JST beholden to a 'mystery Australian business man' as the major creditor?

    JST had a commercial mortgage following the construction of Tenacious in 2000. This was a commercial arrangement with RBS, underwritten by the government. When this arrangement expired in 2016, the JST underwent a benefactor-led refinancing effort to pay down this mortgage and to create much needed working capital. Four very established donors (three individuals and one institution) provided the funding for this refinancing – all on very favourable, low-interest bearing long-term arrangements. This benefactor syndicate solution was much friendlier, and financially viable, than any commercial solution available.

    The Australian supporter (Harry Cator) was one of the donors in this syndicate. Harry is a long-term (more than 35 years) supporter of the JST and the son of JST President, and co-founder, Jacquetta Cator. He is also Chairman of JST Australia, the JST’s charitable partner in this country. Beyond his support with refinancing, Harry has been a significant major donor and has contributed significantly as a volunteer.

    Harry, and all the other supporters who helped with this re-financing effort, have been very supportive of the trust throughout our recent financial challenges, providing loan and interest payment holidays. They are working with us to help ensure a bright future for our work and being as helpful as they possibly can.

  • Why did JST go through a major rebrand if the finances were this dire?

    It is essential that the JST presents itself in a way that aligns with our mission and beneficiaries. In 2018, we made a number of enhancements to our mission, target beneficiaries and impact frameworks. We also undertook a rebranding exercise to better present our work to these target audiences.

    We were fortunate to partner with Valiant Design on this project, who provided over 90% of the brand design and website work pro bono. The cash impact to the JST was consequently very low and has not been a factor in this recent financial situation.

  • Will members of the Senior Leadership Team and/or the Trustees be stepping down?

    As part of continued good governance, we will be reviewing our Trustee Board and management team to ensure it is fit for purpose. Per the Trustees Statement of July 22nd, we will be reviewing the JST’s organisational structure to ensure it is fit for purpose given the reduction in fleet size. Per ACAS guidelines, any organisational changes will be subject to consultation.

  • Why has JST shifted more of it's focus onto Partnership Voyages and subsequently away from Public Voyages?

    Partnership voyages are helping to raise our impact, grow our income and improve income security (through multi-year arrangements and a greater per diem income that is much closer to our operating costs for running a ship). They have also helped us to broaden our beneficiary groups and work with beneficiary groups who would have otherwise never heard of us. This is particularly important because recruitment of new beneficiaries is a critical factor in demonstrating charitable impact. Going forwards, we will be carefully reviewing the mix of partnership vs. public voyages to maximise charitable impact and financial security.

  • Has JST placed too much confidence in partnerships and their revenue generation?

    See above question and answer. Partnerships have helped to improve the JST’s impact and financial standing. They will continue to play a strong role in our future.

  • Is the website going to be improved?

    Since the launch of the new JST website we have received many positive responses by users, especially regarding the improvements to accessibility. However we are also aware that there are elements in the new design that our regular users are missing from our old site. During a second phase of the website creation some previous features may be reinstated and other new elements may also be added. Constructive feedback from our website users is always welcome as it guides us on any possible future improvements. Please send your suggestions to marketing@jst.org.uk or info@jst.org.uk

  • Will the JST be looking at focussing on a smaller number of Ports and concentrating their efforts on these Ports?

    Yes, we will be. Please see more information about this in the Hub Port Strategy document.

  • Will action be taken to raise the profile of JST within the wider public?

    As a smaller charity, with a limited marketing/PR budget, we will always face challenges in raising awareness of our work. Some good progress has been made in recent years and our partnerships strategy is central to this, for example impact stats from Barclays RBV, Lord Dannatt’s Round Britain Challenge, Sea Change winning Silver in National Charity Film Awards.

    We recognise the need to take this further and are in the process of recruiting a Story Teller and Content Manager to ensure we take a strong and contemporary approach to this task. It is a critical hire, so please share the details with anyone who might be interested.

     

  • Could the JST make more of alongside events? Both for fundraising and for more Open Ships.

    Yes, this is always a consideration in our planning. The aforementioned Hub Strategy should increase these opportunities in communities across the UK.

  • For those who have booked onto voyages in the future and committed money to those voyages, will they be refunded their money if a change in the voyage program is part of the new business model?

    Per the Trustees Statement on July 22nd, those crew members booked onto STS Lord Nelson’s voyages from March 2020 (towards the end of her winter programme) will be given the option of a full refund, or being booked onto another SV Tenacious voyage. Those with existing bookings will be contacted by our Customer Service Team to discuss their options and a new, revised, programme for both vessels can be found here

  • Will a change in how the JST fundraises be likely as a result of the Emergency Appeal?

    In the last few years, considerable focus has gone into growing the JST’s base of major donors (people contributing £10,000+ per annum) and this has helped to improve the Trust’s core income and deal with major issues like our re-financing needs (See answer to “Is the JST beholden to a ‘mystery Australian business man’ as the major creditor?”).

    The recent appeal has highlighted the widespread support for our work and that we need to do a better job maintaining relationships with our grassroots supporters and volunteers. Opportunities to do this will be central to our future plans, as will the growth of other opportunities, like corporate sponsorship and benefit-in-kind support from our suppliers.

     

  • Does JST have an independent financial auditor? Did they not pick up on this situation?

    Yes, we do have independent auditors audit our financial records annually as is legally required for a charity of our size. They are a well established chartered accountancy firm that is a member of the UK200 Group of independent chartered accountants and lawyers. During our most recent audited Annual Report and Accounts, for the year ending March 2018, the auditors did comment on material uncertainties regarding the trust’s continued operation. They can be found on page 36 of the document.

    The JST has also been the beneficiary of a generous grant from a big-4 accounting firm, who have also been independently providing us with ongoing restructuring advice from time-to-time.

    The JST Management has always had high levels of financial oversight and scrutiny. A sub-group of Trustees with significant business experience meet monthly to discuss the JST finances. They are supported by three independent advisers, who are all respected and very experienced accounting professionals. The management team reports back to this group weekly.

  • Will JST limit it's activities in more exotic destinations abroad?

    From our very first voyage, there has always been an international dimension to the JST’s programmes. However, this needs to be balanced with other objectives, like accessibility and costs of travel.

    Going forwards, we will be reviewing our voyage programme to maximise our charitable impact and ensure financial objectives are met. The Hub Strategy will likely provide a backbone to future UK programming as will our international network of partners.

    However, due to poor weather from October to April, it is likely that our operational vessel will need to leave UK waters to seek the winter sun. We also remain open minded about future longer-haul international programmes, but they will need a clear funding source and must demonstrate appropriate charitable impact.

  • Who is the sub-committee made up of and why?

    Two Trustee sub-committees were established; one was a “Planning Team” and the second a “Review Team”. The “Planning Team” was made up of three Trustees with very significant commercial and professional experience: Martyn Cuff (Vice Chairman), Ashley Head and Mark Rawson.

    The Review Team was constituted of Kevin Curran (Trustee, Chair of the Finance and Audit Committee), Mark Needham (Trustee and a lawyer), Tom Stewart (Trustee, former Chairman, and architect of the Watch Leader Training Programme) and Stuart Lisle (a Chartered Accountant and independent member of the Finance and Audit Committee). PwC, who are providing ongoing restructuring advice, and Hill Dickinson, the JST’s lawyers, have also been on-hand to provide professional advice where needed.

    The Trustees have been delighted to get a significant volume of thoughtful feedback from staff, volunteers and beneficiaries of the JST’s work. This has been assimilated, sorted and will be considered as plans are developed.

  • If members of the public cancel at the last minute, they lose their deposit. Why does it seem like this does not apply to Partnerships?

    Our standard terms include penalties to partners that cancel within a specified time frame. The cancellation penalties increase the closer you get to the voyage date.

JST

JST