Surplus Fund

🗎 SURPLUS FUND ANNUAL REPORT AND FINANCIAL STATEMENTS (PDF) for the year ended 31 March 2021

By 1790 a surplus of some £300 had been accumulated by the Naval Society of 1765 and the use to which this and any future surplus should be put began to receive serious attention.

At a meeting in February 1792, Captain John Markham proposed a scheme:

“It is presumed that the best manner of applying the surplus money of this Club will be to charitable purposes and it is submitted for consideration whether the most proper objects may not be the widows of those who now are members or in future shall become members of the Society.”

Captain John Markham, 1792

A subsequent meeting added “legitimate orphans” to widows as potential beneficiaries. The proposal was approved unanimously at a third meeting by the 36 members attending and a special committee set up to administer the fund. The institution of the fund had a remarkable effect on the payment by members of their arrears and in 1793 the amount received on this account was £1,076, a significant sum in those days. The initial investment was £1,300 in 3% Consols. The balance of the interest after payment of grants, together with the annual surplus from the Club’s funds, was used to purchase additional stock. The sum invested increased steadily to £10,000 by 1823 and £20,000 by 1874.

When the Club’s Rules were revised in 1824 the regulations governing the administration of the Surplus Fund were clearly defined. Four Trustees were appointed headed by Admiral John Markham who had played such a major role in introducing the scheme. Applications for relief were made on a special form known as a Memorial and beneficiaries were – and are – known as Memorialists.

At first very few grants were made but the number of Memorialists increased to 10 or more from 1824 and in 1889 was 27.

• Between 30 and 40 were sustained up to 1914.
• Thereafter the figure remained between 20 and 30 until the 1960s, decreasing to nine in 1969.
• Since then it has slowly declined to seven or less.
• The total granted was £100 in 1828, £545 in 1889 and £1,505 in 1920.
• It remained between £1,300 and £2,000 for the next 40 years.
• The 1970s saw it reach £5,000 but by 1990 it had soared to £25,000 when the market value of investments was over £400,000.
• The value of investments is currently over £1.3m.

In 1927 the Surplus Fund was established as a registered charity governed by the terms of a Trust Deed. This conferred recognition by the Charity Commission and the Inland Revenue. Benefits were extended to include the sisters of deceased members. The investment policy has changed over the years to permit the Trustees freedom of action within their discretion whilst employing professional investment management. Investments are supported by a small but steady stream of legacies and donations.

The Trust Deed governing the Surplus Fund’s charitable activities was reviewed in 2006 following which potential beneficiaries were redefined as “widows, widowers, siblings, orphan children and dependants” of former members of the Club. At the same time, the responsibilities in law of the Trustees were acknowledged by clarifying the role of the Committee with respect to the Surplus Fund as being purely advisory.

During FY 2022/23, £500 was received from the General Fund, and charitable disbursements from the Surplus Fund were some £20,548, less than previous year since memorialists in receipt reduced. During the FY investment income was good and Trustees decided to keep the level of help to memorialists high but still leading to a modest surplus of £7,070 at end of year.

The value of investments is now over £1.2m, and the Permanent Endowment was reviewed in 2017 at its 10 yearly point and increased to £200,000 from £150,000.

September 2023