UK Trusts show commitment - or do they?

Two apparently contradictory stories in the current Charity Times Enewsalert:

"Falls in grant-making and asset value for top charities
New analysis of the impact of the recession on charity fundraising shows 41 percent of the top 300 charitable trusts saw a fall in the value of their grant-making in 2008..."

Says one intro but another report in the same Enewsalert says...

"Charitable trusts show commitment to supporting charities, reveals report
Charitable trusts and foundations realise now is not the time to turn off the tap of support for Britain’s charities, according to new research published today by the Charity Commission"

Reading on I hoped that maybe they weren't contradictory, with maybe just eye-catching headlines, and talking about different things - but no, they are totally at odds with each other.

The first, by ESRC Centre for Charitable Giving and Philanthropy at Cass Business School, London looked at the biggest charities and trusts. Charity Times tells us "Her results indicate grant-making by the major charitable trusts has been maintained as a result of gifts and endowments received over the last decade, but this is a hidden ‘time bomb’."

And then, the research by the Charity Commission says "There was a clear indication from these trusts that levels of grant-making are, despite the recession, being sustained.The report also found that trusts and foundations had adopted a sustainable approach which would allow them to offer this vital support not just now, but into the future."

Hmmn. Well, if you have a report to the board coming up, you can use either story to back up whatever case you are plumming for - just hope your board members don't subscribe to Charity Times!'

The good news story is here, and the bad one here. Take your pick.

Funding strategically during a recession

Fascinating report from The Institute for Philanthropy talking to donors and funders and offering them ten tips to maintain their giving in recession.

Download the report here.

Jan

Tranquility or turmoil

http://www.fundraisingtraining.co.uk

Interesting summary from Bill Bruty and his team here in the UK of research they've conducted with charitable trusts to look at whether their giving will decrease in the short term as a result of the recession.

Dowload the summary report from the link above (currently in the newsflash section), but the two things that really grabbed me were (1) the fact that while Trust balance sheets have decreased somewhat in the past year or two, many of them had unimaginably good years in 2006 when the market was strong so the pool of potential income increased dramatically back then. We'd all forgotten that... or at least I had as I was out of the country then.

(2) The report also points out that most large trusts make their grants from their dividend income which is actually remaining pretty stable.

Smaller trusts undoubtedly are more likely to be buffeted by the economic climate as they are much more reliant on exceptional income and donations for their ability to give.

So, as with all fundraising, know your donor. Check their specific circumstances and don't assume they haven't got any money. Anecdotally I'm hearing about trust application numbers falling as fundraisers assume the money is going to be tight. Maybe it is and maybe it isn't - but our charities' needs are still as important, so hang on in there, do your research and don't forget to ask.

Trusts and Foundations - the next to be hit?

Contribution by James Huitson

I have been chatting a lot recently to my friend and mentor Bill Bruty which is something I enjoy a lot, and occasionally in between comparing the relative tribulations of supporting Portsmouth and Leyton Orient football clubs we do talk about fundraising.

Now Bill is a real expert on trust and foundation fundraising and is unusual in this field in that he is as much of a data nerd as we are at Pareto. He likes nothing more than a pleasant afternoon at the Charity Commission in the UK wading through the information on the various charitable trusts who give in the UK and as seems to be ubiquitous these days, the chat turned to the recession. Once we had finished discussing bankers and whether they are now above or below lawyers in our lists of favourite people I asked the question – so Bill, I assume the trust market is shot at the moment then?

“Funny you should say that" he replied. "I’ve been looking into that. There are a lot of trust fundraisers who want to reduce their targets by a third because of something they have read about the Barings Foundation”.

For those of you who don’t know, the Barings Foundation was one attached to Barings Bank which was infamously brought down by Nick Leeson in the 90’s and they know a thing or two about financial crises. They have said that because they make decisions on their giving based on three year market forecasts, they are anticipating that in two years time they will reduce their giving by a third because they think that two out of the next three years are going to be bad.

That all sounds reasonable, but said Bill, “I’m not sure that that is going to be typical. Lets follow the money around”.

“Take the Garfield Weston Foundation. They give out around GBP39 million a year. Do you know how much of a percentage of their assets that is? Just over 1%, they have GBP3.6 billion in assets and they have a expendable capital fund which is worth almost three years of typical grant giving. They can continue their giving levels and ride out a pretty big storm. It’s similar for lots of the oldest and the biggest of the UK trusts and foundations – they have been around for a long time, they know how to smooth things out”.

It will probably be different for the corporate foundations. Lloyds TSB for example only get money from dividends from profits from the bank and well, there might not be any. But it is not all doom and gloom and setting targets lower is probably just a cop out.

Yes, you will probably have to run faster to stand still, and yes there is ever more pressure to put forward good pieces of work with demonstrable impact and outcomes, but when was that ever a bad idea?

The recession will impact on fundraising, but it might not be the disaster some people seem to think. One thing is certain, the way to guarantee you have problems will be assume you are going to have problems and give up and go home.