Tier 3 member and non-member revenue
In the Statement of Financial Performance, revenue received from members is to be recorded separately to revenue received from non-members.
Where practical, all revenue from members should be recorded in the category ‘Fees, subscriptions and other revenue from members’.
This could include:
- membership fees and subscriptions
- donations, koha or offerings from members
- fundraising contributions from members
- revenue from members for goods or services.
Revenue from non-members is recorded in either the category 'Donations, fundraising and other similar revenue', or 'Revenue from providing goods or services'.
You can’t change the type of information that must be reported within each category, however you can split or rename a category to make it more meaningful for your charity. You can also delete a category if it isn’t relevant to your charity. Refer to the Charities Services resource ‘Tier 3 minimum categories’ for more information.
Why is revenue from members kept separate?
Separating revenue from members and non-members helps to show the reader the extent to which the charity is self-funded or funded from external sources. This is useful in understanding where a charity gets its revenue from to fund its activities.
Who are members?
For some charities it will be clear if they have members. For example, societies are membership based and will clearly have members. However, it may not be straightforward for all charities and some may decide that they do not have members.
There are a few factors that will help you identify if you have members:
- Members are a distinct group of people that are clearly separate from the general public
- Members may have access to benefits, goods or services that are not available to the general public
- Members can be involved in decision making. This will often happen at an Annual General Meeting
- Membership commonly involves some form of contribution towards the charity - for example, membership fees, subscriptions, attendance expectation, or volunteering
How do we separate member revenue?
Keeping some revenue from members separate, such as membership fees, will be relatively straightforward. In other situations it can be more complicated and you will need to use judgment to determine how you will record the revenue. Here are some examples:
Annual fair
An annual fair is held every year to raise money from the community. The attendees will mainly be from the wider community, but a small percentage will be members. The charity knows that a small percentage of revenue from the annual fair will be from members but it will be difficult to separate these. The charity decides:
All revenue from the annual fair will be recorded in the category ‘Donations, fundraising and other similar revenue’.
Quiz night
The event is mainly for the members, but they are encouraged to invite friends and family. The nature of the event makes it difficult to track non-members. Revenue from the event is from koha on entry and a raffle. On the quiz night, the organisers make a note that about 25% of the attendees are non-members. The charity decides:
25% of revenue will be recorded in the category ‘Donations, fundraising and other similar revenue’. 75% of revenue will be recorded in the category ‘Fees, subscriptions and other revenue from members’. It will explain in the notes the judgement made about splitting the quiz night revenue: “Revenue from the quiz night was split; 75% from members, 25% from non-members.”
Classes
Educational classes are attended by members and the general public. The instructor keeps a record of who attends the class and the amounts they have paid. The charity knows who the members are. Therefore, the instructor’s records make it straightforward to record which revenue is from members and which is from non-members. The charity decides:
Revenue from non-members will be recorded in the category ‘Revenue from providing goods or services’. Revenue from members will be recorded in the category ‘Fees, subscriptions and other revenue from members’.
Frozen meal fundraiser
As a fundraiser, members are asked to sell frozen meals to their friends, family and work colleagues. The charity decides that they cannot easily record whether they are receiving revenue from members or non-members. The charity decides:
All revenue from the frozen meal fundraiser will be recorded in the category ‘Donations, fundraising and other similar revenue’.
How do we show the total revenue for an activity when member and non-member revenue is separated?
The Tier 3 Standard requires that revenue from members and non-members be reported separately. However, if a charity wants to show the total revenue from activities such as the quiz night or net proceeds of an activity, it can provide this information in the notes.