UK Trusts and Foundations Continue to Fund in the Downturn

A report commissioned by the UK Charity Commission has found that Trusts and Foundations are taking a calm and measured approach in actively managing the impact of the economic downturn.

The funds admit that managing the downturn has taken up a considerable amount of time and say they are ‘holding their nerve’ and not seeing the financial situation as a reason to panic.

There are an estimated 8,800 Trusts and Foundations in the UK. The top 500 grant makers spending around £2.7billion per year – or around 10% of Third Sector income.

The Chief Executive of the UK Charity Commission, Andrew Hind says the income accrued from investments in the boom times has served these funds particularly well and some are starting to spend from this pot without having to cut deeply into their capital base.

However, Hind says all the Trusts and Foundations interviewed for the research were clear that the current situation requires a different response.

He says in common with many other funders, they are increasing their oversight of how effectively their money is used by recipient charities.

He says they also appear to be more alert to the risks involved with the vast majority reporting that they now undertake closer scrutiny of the financial viability of organisations applying for funds.

Hind says it is clear from the research that Trusts and Foundations saw the downturn coming; a natural awareness given their primary income stream is investment-based and the cautious approach to investment management sees many of them having the capacity to respond to sudden economic changes.

The Charity Commission says this is good news for the charities that rely on Trusts and Foundations .

The research also found that Trusts and Foundations are considering more flexible approaches to supporting charities by funding more core costs while at the same time  affecting the funding for innovative work by charities.

The report can be downloaded at  www.charity-commission.gov.uk