Are trusts and foundations giving their all?

9 November 2011

Sarah Ridley is Executive Director of The Tubney Charitable Trust until 31 March 2012, when the trust will close its doors after fulfilling the wishes of its founders and spending out its funds. The Tubney Charitable Trust has given over £65 million over a 15-year period. In this blog, Sarah talks about the benefits of operating as a spend out charity, and introduces ‘Giving our all: reflections of a spend out charity’, which is published this week.

“The most difficult and important question all Trustees must ask themselves is ‘why do we exist?’ A corollary is ‘why do we need to exist forever?’ Can we do more good by concentrating our resources, within a fixed timeframe and very specific areas of interest? Can we do even more good by using our resources to make other organisations pursuing similar or identical goals more effective and robust?”

These questions are posed by René Olivieri, Chair of The Tubney Charitable Trust, in Giving our all: reflections of a spend out charity, which was published this month to mark the end of the 15-year life of one of the UK’s most prominent spend-out charities. When we close our doors in March 2012, having donated over £65 million to charitable causes, we will have fulfilled the wishes that our founders set out when they established the fledgling trust in 1997, explicitly stating that they wanted the money disbursed within a short timeframe.

Although spend out was a given for the Tubney Trustees, they had no trouble seeing its attractions. As our Trustee, Jonathan Burchfield, a charity lawyer, has stated:

“There is too often an over-simplistic focus on the need to act ‘in the best interests of the charity’, an expression that encourages too much focus on the structure and group of people that is ‘the charity’. Instead, the focus should be on acting in the best interests of your charitable objectives, something that is much wider, and may indeed lead to Trustees deciding that those interests require that a charity should be wound up.”

Tubney Trustees and staff believe we have been more effective by concentrating our energies and resources over a shorter period than if we had acted over a longer one. First, and perhaps obviously, the benefits of action are reaped sooner. Second, all other things being equal, the Trust will increase its social investment by the amount it has saved in its own overheads.

Not surprisingly, we have become advocates of ‘spend out’, for as René states in our new publication:

There is no question in our minds that ‘spend out’ focuses the collective mind and resources of a trust in an extraordinary way and can do more to achieve a trust’s long-term goals than a slow, modest, and possibly uninspired, perpetual outward flow of funds.

And the Tubney Trustees are not alone in their belief in the power of spending out. In October 2006 the Bill & Melinda Gates Foundation announced the decision to spend all of its resources within 50 years after Bill’s and Melinda’s deaths.  Atlantic Philanthropies, The Diana, Princess of Wales Memorial Fund and the One Foundation are among a growing number of grant-givers who are following this path.

Spending out is not for all philanthropists, and indeed, some organisations are compelled by their deeds to exist in perpetuity. But the Tubney Trustees believe it is incumbent on each charity to justify its continuing existence on an ongoing basis. At the very least, they encourage all trustee boards to take the ‘what if’ or ‘why not’ test – what would the charity do differently if it were compelled to spend out? Even if the board decides against such action, the exercise could illuminate and strengthen existing grant-making policies and practices.

Think of the good that could be achieved now if more grant-makers were giving their all.

Giving our all recounts the evolution of The Tubney Charitable Trust, which works to encourage biodervisity in the environment and improve the lives of farmed animals, and the various challenges it faced over time. Against this background it explores issues of interest to all grant-makers: strategic planning, governance, campaigning, risk management, project management, partnerships and financial management. In addition, it should be of particular interest to grant-makers like Tubney who have committed to, or are contemplating, spending out. The publication is downloadable from the Trust’s website or available upon request from 30-31 Friar Street, Reading, RG1 1DX.