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| How is the recession affecting grantmaking from trusts and foundations? DSC research shows that many top trusts and foundations are giving more money despite a drop in income, while others still maintain the same level of funding. |
As a group, the top 400 grant-making trusts and foundations in the UK are continuing to increase their giving, despite a fall in the collective value of their assets of around £4 billion.
For 2007/08, in most cases the latest financial year where data is available, the majority of trusts included in DSC’s The Guide to the Major Trusts Volume 1 saw their incomes and the total amount given in grants increase, despite the financial crisis and collapse in the stock market.
Although the drop in asset values has affected the income of many trusts, considerable numbers say their intention, at least in the short term, is to maintain their levels of grantmaking so that their beneficiaries can continue their valuable work with some of the most disadvantaged members of society.
The trusts in this edition of the Guide gave almost £2.53 billion to organisations during the latest year for which information was available. This is a relatively modest increase compared to £2.3 billion in the last edition (largely 2005/06 data) although significant given the current difficult economic climate.
The full picture will not be clear for some time however, as much of the financial information taken from 2007/08 accounts relates to the beginning of the recession.
Much of the increase in grantmaking shown in this edition of the Guide is due to the impressive work of the Wellcome Trust, whose grantmaking rose from £324.7 million in the last edition to a staggering £598.5 million in this edition. However, 21 other trusts in the top 25 also increased the amount of money they gave since the last edition of the book.
For example, the Garfield Weston Foundation gave £55 million in 2007/08 compared with £38 million in 2005/06; the Leverhulme Trust gave £29 million in the previous edition and £48.5 million here; and the City Parochial Foundation, whose grantmaking has increased from £9.7 million to £11.5 million. Although a relatively modest increase, the City Parochial Foundation is a good example of a pro-active and dynamic foundation that achieves a great deal with its money – the foundation works with some of the most excluded and disadvantaged people in the Capital and is not afraid to tackle difficult issues.
Naturally, there are also trusts featured in this edition whose grantmaking has decreased since last time (indeed some have been omitted as a result), be it because of natural fluctuations in the level of funding distributed each year, or as a result of the recent financial crisis.
The Northern Rock Foundation, for example, reduced its grantmaking from £27.1 million in 2006 to £10.5 million in 2008, largely due to uncertainty around funding arrangements from Northern Rock plc after the bank was taken into public ownership.
In summer 2009 DSC carried out an additional survey of the trusts and foundations in the Guide to try and find out how the recession was impacting their grantmaking.
Around half of those who responded said that they had about the same level of funding available during the current financial year (in most cases, 2008/09) as they had available in the previous financial year.
Encouragingly, around half of those who responded also said that they anticipated that they would have around the same level of funding available during the next financial year. These findings are broadly corroborated by other recent research conducted by the Association of Charitable Foundations and the Charity Commission.
The full picture of how the recession has affected grantmaking from these funders will not be clear for several years. Significant numbers of trusts and foundations have been dramatically affected and have had to reduce giving, whilst others have not been severely affected or have seen little difference.
Thankfully, the evidence suggests that many have decided not to reduce their giving in the short-term, at a time when needs are great.
There is no question that financial meltdown poses significant challenges for the future, but there are silver linings in the storm clouds.
In all of this it is important that trusts and foundations remember that they exist to serve beneficiaries, not to accumulate capital; in the bad times their funds are more, not less, vital.
The Guide to the Major Trusts Volume 1 is published by DSC in March. Pre-order your copy now at www.dsc.org.uk
By Tom Traynor, Author of The Guide to the Major Trusts Volume 1, Directory of Social Change