Trustees report and financial statements 2020

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS 14 SCIENCE SHAPING THE WORLD WE LIVE IN 15 Where our income comes from and how we spend it Income The Society has a number of income sources, including the government, trusts, foundations, companies, individuals, trading activities and income from investments. Its income enables the Society to deliver a wide range of programmes in support of its strategic aims. Income for the year totalled £129.8 million. Income and endowments from donations and legacies (£0.8 million) The Society has relied on the generous support of philanthropists throughout its history. This year the Society received funding from trusts, foundations, companies and individuals in addition to the contributions made by Fellows. The Society is grateful to all its donors and their names can be found on the Society’s website. Grants for charitable activities (£108.5 million) The Society receives the majority of its funding from the UK government’s Department for Business, Energy and Industrial Strategy (BEIS). In the year, a grant was also received from the Department for International Development. In addition to government funding, the Society receives valuable contributions towards charitable activities from long-term partners such as the Wolfson Foundation and the Leverhulme Trust, as well as other external bodies. Trading in furtherance of charitable activities (£11.5 million) The Society undertakes trading activities in the form of publishing journals and conferencing activities that further its charitable objectives. Other trading activities (£2.0 million) The Society acquired Chicheley Hall in 2008 with the aim of operating the property as a centre for scientific and academic conferences. In addition to its mission-related activities, the Hall hosted conferences and other events, and Royal Society Trading Limited was established to process the activities of the Hall. Royal Society (London) Ltd was established to process other non- charitable trading activities including income from sponsorship agreements. Income from investments (£6.9 million) The Society holds a significant investment portfolio which was valued at £234.1 million at 31 March 2020. Many of these funds held were bequeathed to the Society as endowments or gifted as a restricted fund for a specific purpose. The investment objective of the Society is to at least maintain the real value of its investment assets while generating a stable and sustainable return to fund charitable activities, thus being even handed between current and future beneficiaries. Other income (£0.1 million) The majority of other income sources relates to financial contributions made to projects led by the Society. Expenditure Expenditure for the year totalled £133.7 million. Expenditure is incurred on raising funds and charitable activities. Expenditure on raising funds (£4.4 million) Expenditure on raising funds includes the direct costs of raising funds, associated support costs, costs of trading and investment management fees. Expenditure on charitable activities (£129.3 million) The Society’s charitable expenditure is categorised in the statement of financial activities as follows: • promoting science and its benefits; • supporting and recognising excellence in science; • providing scientific advice for policy; • fostering international and global cooperation; and • education and public engagement. Each of the areas above supports the delivery of the three strategic objectives as set out in the current strategic plan. The expenditure chart on the following page illustrates expenditure by both strategic objective and expenditure category. The expenditure to further the strategic objective of promoting excellence in science includes the majority of grant awards, the costs of the Society’s publishing operation and the costs associated with lettings at Carlton House Terrace which are in furtherance of charitable objects. Expenditure in this area also includes costs arising from recognition of the excellence and creativity of scientists by election to the Fellowship and Foreign Membership and the awards to scientists to recognise excellence in science and technology. Expenditure to further the objective of supporting international scientific collaboration mainly constitutes grant awards on international schemes, providing scientific advice for areas of international policy and expenditure on events convening scientists from across the world. The majority of the Society’s expenditure to demonstrate the importance of science to everyone is in the form of providing scientific advice for policy and education and public engagement work. Expenditure is shown by strategic objective in the outer ring and by expenditure category as shown in the statement of financial activities in the inner ring.  Read more on page 40.