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Recession starts to impact on grantmaking

Fundraising | Tania Mason | 6 Nov 2009

A number of charitable trusts have stopped taking new applications or are delaying making decisions about grants while they wait to see the full impact of the recession on their endowments.

Consultant Simon George, who founded the Institute of Fundraising’s trusts special interest group, said the current recession was affecting trusts and foundations worse than any previous downturn he could remember. Discussions on the online trustfundraising forum support his views, with lots of charities saying their applications have stalled or been turned down.

Last month the Lloyds TSB Foundation for Scotland closed its doors to new grant applications “for the foreseeable future” after  failing to reach agreement with its main benefactor, the Lloyds Banking Group, on future funding. Talks have now reopened between the two parties.

The Marchday Charitable Fund is also not accepting new applications. A spokeswoman for Marchday, which is funded mainly by corporate support from the Marchday Group plc, said the trust had reached its capacity for this financial year and its future was under review.

PF has also learned that the Clore Duffield Foundation has delayed application decisions until a trustee meeting in December to decide how proceed. The Foundation refused to confirm or deny this.

A trust fundraiser also told PF that the Bromley Trust was  sitting on all current applications and planned to reconsider them in January, but the Bromley Trust denied this was true.  A spokesman said the Trust may have told individual fundraisers this was the case regarding their particular application but that this did not apply across the board.  

The J P Getty Jnr Charitable Trust has announced its intention to cease grantmaking altogether in the next few years, though it insists it is not connected to the recession, but to the wishes of its founder, the late Sir Paul Getty. The Trust will spend out its £44m reserves over the next five to ten years. In 2008 it awarded grants totalling £3.1m but it is now looking to increase the level of its annual spend and award bigger grants that will have an enduring impact.

Simon George recalled that Sir Paul Getty always said his eponymous Trust wouldn’t last forever, but added: “It seems a shame it is going now.  It’s been a really good funder to small organisations and this is where the worst damage will be. There will be a bonanza short-term but in the long term it will be a big loss.”

George said he knew of other trusts whose future was hanging in the balance, and that the current recession was the worst for trusts and foundations that he had witnessed in over 20 years in fundraising. “In the 2001/2 downturn lots of trusts took a big hit and reduced their giving, but very few disappeared. This time it seems to be shaking out the weaker ones.”

The Anglo-German Foundation will also close on 4 December, claiming it has largely achieved its aims of improving mutual knowledge between the two nations.

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