‘Give dormant assets to community charities to create £40m per year’

25 Sep 2017 News

Fergus Burnett

Sector infrastructure bodies have called on the chancellor to give community charities the £1bn or more expected to be raised from dormant assets, to generate £40m a year for the sector.

The proposals are included in a letter to the Chancellor, Philip Hammond, from Sir Stuart Etherington, chief executive of NCVO, Vicky Browning, chief executive of Acevo and Fabian French, chief executive of UKCF.

The letter has also called for a successor to the European Social Fund, which has previously offered EU grant funding to the sector. The fund has previously been estimated to be worth up to £500m over seven years.

In the letter to Hammond they underline that: “Our proposals do not require additional funding from the Exchequer.”

Dormant assets

Charities said that dormant assets, which a recent commission estimated to be between £1bn and £2bn, should be used to “strengthen local philanthropy”. 

The Dormant Asset Commission published its report in the spring and Rob Wilson, then minister for civil society, said it would be used for good causes. But the government is yet to reveal how it plans to do this. 

Charity leaders called on the government to invest it in “local philanthropic institutions, such as community foundations and local funders, to help fund small and local charities now and in the future”.

They predicted that investing £1bn this way could generate £40m per year for local grantmaking. 

“Widening the network of endowed community foundations, and increasing the level of capital they hold, will generate investment returns from which small and local charities can be grant funded.

“At a time when local authority grants to charities are in decline, this is an opportunity to address the sustainability of small charities so they can continue to support and help communities create opportunities for themselves well into the future,” the letter said.

It said that this could be even more if match funding from philanthropists was sought and highlighted a previous successful match funding initiative, the Endowment Match Challenge when £100m of philanthropic capital was generated with a £50m match from government.

Successor to the ESF 

The letter also said that when the UK leaves the European Union the money that would have gone to the European Social Fund should be used to create a similar fund which “builds on the best aspects of ESF while addressing the design flaws which have led to wasteful bureaucracy”. 

They highlighted that the Conservative Party’s election manifesto included a commitment to set up a UK Shared Prosperity Fund and has sent the government proposals for how a social fund aspect could be included in this. 


 

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