Family foundation giving robust despite an 8.7% drop

By: 

Cheryl Chapman

Managing Editor, Philanthropy UK

Giving by the 100 largest UK family foundations may be down by 8.7% from £1.41bn in 2008/09 to 1.29bn in 2009/10, but it remains ‘robust’ compared to other forms of philanthropy, according to an annual survey.

The Family Foundation Giving Trends 2011 report, by the Centre for Charitable Giving and Philanthropy (CGAP) and the Pears Foundation,  shows that over the last five years family foundation giving has increased by 25% while individual giving has dropped 0.4%. Corporate giving has increased by an estimated 7%, though it’s difficult to measure by how much as in-kind giving, which makes up a significant proportion, is hard to value.

Cathy Pharoah of Cass Business School who co-authored the trends report with Charles Keidan of Pears Foundation and Jillian Gordon, lecturer at Hunter Centre for Entrepreneurship, says the drop in Foundation Giving is the result of falling asset values in 2008/09. She said as giving lags a year behind asset value and it increased by 7.8% in 2009/10 it "raises hopes that family foundation giving will increase next year".

The top five by charitable expenditure were the Wellcome Trust, with slightly reduced spending (£635m); the Leverhulme Trust, with increased spending (£50m); the Gatsby Charitable Foundation (£36m); the Garfield Weston Foundation, whose spending increased (£34m); and the Monument Trust (£32m).

The aim of the report as well as to provide benchmarks is to encourage more foundation giving. To that end the report contains eight interviews with a mix of foundations of various sizes and ages.

“By sharing experiences it will help people to find pathways into philanthropy,” said Pharoah.

One of the key messages to emerge from the report case studies is that "charities, professional advisers and policymakers need to deepen their understanding of the diversity within philanthropy, and develop many more imaginative and supportive ways for potential philanthropists to share experiences and learning".

Pharoah said among the actions that could be taken to encourage more giving was for philanthropists to be more willing to share their experiences.

At the launch event philanthropists Sir Tom Hunter, entrepreneur and founder of The Hunter Foundation, Nigel Doughty, president of The Cranfield Trust and founder of The Doughty Foundation,  and Trevor Pears, executive chair of Pears Foundation, did just that, giving personal accounts of giving through their family foundations. They also took questions from the floor in a session chaired by Thomas Hughes-Hallet, philanthropist, Marie Curie CEO and founder of the Emily Hughes-Hallett Fund, in memory of his daughter. 

Pears said it was the first time he had spoken publicly and that he felt he should do so.

The three spoke about how giving through a family foundation can bring a family together and how it should be fun for children. They agreed that a giving strategy should not confine giving so that it became too onerous and not fun. They also identified a need to educate the next generation of givers.

They were asked whether the current economic conditions should be a trigger for foundations to spend more or to be more conservative with their funds.

Trevor Pears said he felt it important to respond to need today when charities were being asked to do more with less: “If the need is there and you can spend more, then you should,” he said.

The founders also shared their motivations and their giving journeys. Nigel Doughty said giving through a foundation had made his giving less ad hoc and less reactive, more strategic and more impactful. Trevor Pears said it had caused them to move in a direction of trying to understand the impact of what they were funding. "We applied research, evaluated the field we were working in and though about ourselves in terms of who we are and our context locally, nationally and internationally”. He said it had lead to working much more in partnership with charitable organisations to achieve their aims.  

The report is available to download for free from The Pears website.