Cabinet Office made savings of £8.1m last year largely as a result of the failure of individual and corporate donors to take up its £50m match fund challenge designed to invigorate local philanthropy for community foundations.

The Community First Endowment Match Fund Challenge was touted by minister for civil society Nick Hurd as “money on the ground for the Big Society” when he launched it in January 2012. 

The government put up £50m as an incentive matching scheme, releasing £1 of government money for every £2 of donations from individuals and corporates to the endowments of community foundations. Fundraising for the fund is due to run until 2015 at which point it was expected to be worth £150m in total, and after which it was originally predicted that returns of £12m would be delivered to local community organisations each year.

However, in the first full year of the Fund, targets have been missed. Cabinet Office accounts for the year ending 31 March 2013 attribute an office saving of £8.12m “primarily” to underspend on the Community First endowment initiative due to the fact that donations from the public were lower than expected. If one was to suppose that £7m of this underspend could be attributed to the below-expectation performance of the match fund, this would equate to a shortfall of £21m to date in the total value of the endowment.

On launching the fund last January, Nick Hurd pitched the initiative as setting charities up for the future and as a salve for local authority cuts to community organisations.  

“It’s time we invested in our future rather than borrowing on it,” he said. “The Community First endowment will be a lasting source of money to help local community groups achieve what they want, whether that’s turning wasteland into parks, holding social events for older people or starting sports clubs for the young. This is money on the ground for the Big Society and the 5,000 community organisers we are training will encourage people to get together and use it.”

The precise value of donations or match funding raised by the endowment challenge is not clear. According to Cabinet Office accounts, released last week, the value of capital grants made in 2012/13 by the Office for Civil Society under the banner ‘Community First’ was £7.9m and £9.1m in the previous year.

The Office for Civil Society also made £8.6m worth of Community First ‘resource grants’ in 2012/13. However, this spending is not all on the endowment match fund; alongside the £50m for the match initiative the Cabinet Office has allocated £30m to Community First for a small grants programme.  Between April 2011 and the end of March this year, £30m has been spent in total on Community First initiatives.

The £80m programme is due to finish in March 2015.

Neither the Cabinet Office nor the Community Development Foundation, which runs the fund, would respond to questions on the under-performance of the fund. Civilsociety.co.uk was directed to the explanation within the Cabinet Office accounts which read: “The funding raised by members of the public was less than expected.”