In 2023, Lankelly Chase (LC), a trust with almost £150m in capital at the time, announced that it had decided to dismantle itself and disappear within five years. I have been mulling over this startling decision since.
LC’s website explains that it is “on a journey, from supporting charity to promoting justice”. This is a phoney antithesis. Many charities can and do promote justice, often reliant at crucial stages on the support of foundations.
Indeed, many of the greatest campaigns leading to transformative change take decades, not five years, from the abolition of slavery to women’s rights or the fight against discrimination against gay people.
In fact, such campaigns may never be over, which is one of the reasons that it is so important that major foundations will still be there to support them. The continuing presence of foundations is critical to the flourishing of alternative visions of society, whether secular or religious.
The charitable case for spending out a foundation
It can nonetheless be legitimate (if their founding documents allow) for trustees of a foundation to conclude, after careful consideration, that spending out the money is the best way of advancing their charitable causes.
But it is an awesome responsibility, because a defunct foundation will not be there for future generations that need it and who are unable to contribute to the present-day discussion to close it.
There is a serious debate to be had about the arguments for releasing substantial sums in the short term for social change. If done carefully and well, it can sometimes effect change sooner and have continuing ripple effects that achieve more than retaining capital with a view to spending only the interest in annual grants would.
But although they mention the “hoarding” of capital as an issue, this is not the main explanation given by LC for dismantling the charity.
The LC rationale for dismantling itself
The cornerstone reason LC gives is that the cause of interlocking social, economic, environmental and health crises in the world is capitalism, to which it adds boo words such as “colonial capitalism” or “extractive capitalism”.
The foundation says it has invested in colonial extractive capitalism in order to fund its charitable activities.
LC argues that its funding model also encourages charities to compete against each other for the resulting money, and by judging which charity gets what, it mirrors the unequal power relationships that characterise the malevolent economic system.
This creates an unbearable contradiction, it argues, between the charitable aims of the foundation and the way in which it perpetuates the extractive economic system that gives rise to the marginalisation and oppression in the first place. Promoting these ills by its very nature outweighs any good effects of its continuing grant giving, so the foundation must be dismantled.
Trustees of charities are allowed to have contestable, ideological or even eccentric views as to how best to advance charitable causes – so long as that really is what they are trying to do – but this LC analysis has multiple problems.
Problems with the LC rationale
Firstly, anyone relying or accumulating a pension (including no doubt the LC team) depends on investing in the economy, along with anyone who invests any savings anywhere rather than keeping them in a sock under the bed. Whenever we buy anything we participate in the economic system.
Even if we were to agree that ethical investor and consumer choices and different economic policies can’t make much difference, we just have to get over the fact that we participate in and rely on a global economy – a fact to which the demise of LC will make remarkably little difference, whatever happens to the £150m.
Secondly, you have to ignore a great deal of history to estimate so ungenerously the impact of foundations on any number of good causes, and place extraordinary faith in a theory of change to do with making some sort of marginal dent in the norms of the world economic system.
Thirdly, it isn’t foundations that make charities compete with each other for the attention and support of the public and funding agencies of all kinds. That is an existential fact about any voluntary organisation.
Indeed, foundations have often been to the fore in using their grants to incentivise and enable collaboration: most coalitions of charities campaigning collectively will have depended on foundation funding.
Fourthly, as LC showed in the past, independent foundations have considerable powers of convening and bringing together both different charities and representatives of local and national government and private sector, in order to encourage more coherent approaches to key social or environmental problems and enable the voices of marginalised people to be heard by them.
Some foundations (such as the Joseph Rowntree Foundation) speak out with significant authority, amplifying the voices of their grantee partners. The assumption that all such efforts to change awareness, policies and practice are unlikely to make much difference seems defeatist and inaccurate.
Fifthly, undeniably, foundations are able if they so choose to make charities jump through hoops, spend a lot of time filling out forms, tailor their grant applications to what the foundation considers to be desirable, and impose intrusive grant conditions – power that can be abused.
But there are undoubtedly also many cases where the recipient charity experiences the relationship with a foundation as supportive and empowering, suggesting that the solution is not hara-kiri but an ethos and practice of service, listening, sensitivity and support.
Moreover, foundations have the power and freedom to use their independence to champion those causes and charities that are otherwise likely to be ignored and fare badly at the hands of state funders or appeals to the public.
Sixthly, the LC website contrasts foundation grants practice with the way it wants money to “flow freely” to marginalised people and social movements. This is opaque. Money that is not a legal entitlement can’t just “flow” like a river: someone has to decide to give it and take responsibility for doing so.
And you don’t get rid of gatekeepers and power relationships, not to mention factions and sectional interests, just because you are a democratic body rather than a trust. The free-flowing fountain is a chimera.
Exploration in progress
Here is a crucial fact: it is seriously difficult for a body like LC to spend £150m really well over a short time period. And the effort to do so, with very uncertain outcomes, itself absorbs significant charitable funds.
Annual staff, governance and office costs approach £2.5m, of which 18 staff and HR costs account for about £1,620,000 and an extra £250,000 is allocated to “board advisers, facilitation, learning, stakeholder consultation and change management”. In addition, LC are seeking tenders for a PR and Communications agency to assist their transition.
What might be achieved?
LC’s trustees know that their actions will not bring capitalism down, but they aim at significant disruption of some of the systems that characterise the current economic system. What straws in the wind can we see so far?
The most striking is an £8m grant to endow the Baobab Foundation, which is a member-led foundation working for racial and disability justice that describes itself as a movement of, by and for Black and global majority people, disrupting discriminatory patterns of philanthropy that have disadvantaged such groups.
It makes its own grants to grassroots global majority organisations. In principle, this could be a creative and influential LC grant, and although very large, it’s the kind of grant a flexible independent foundation can make at any time. If it works as hoped, it can be seen as a vindication, rather than condemnation, of the foundation model.
A £2m grant has gone to War on Want to support social movements globally. There is nothing very disruptive or innovative about that. Even a much larger one-off disbursement to War on Want is hardly likely to rank as transformative alongside the large resources already devoted to such work year-in year-out by other charities such as ActionAid International.
Another recent grant is investment along with several other major foundations in a social justice network called Local Motion. Together, the total investment by LC, City Bridge, Esmee Fairbairn, Lloyds Bank Foundation, Paul Hamlyn and the Tudor Trust amounts to £18.4m. This looks seriously interesting, but is precisely the sort of thing that continuing foundations can use their freedom and flexibility to do and which they can’t do if they no longer exist.
So the straws in the wind don’t seem too encouraging for the case in favour of dismantling the foundation.
When is the purpose of dismantling yourself charitable in law?
The LC decision to dismantle itself raises the question: is the purpose in so doing actually to advance charitable causes? There is scarcely any mention of any charitable purpose except for a formal note in the annual report.
It’s clear that challenging capitalism is not a charitable purpose. Escaping collusion in the world economic system is not a charitable purpose. The core mission, described as “changing systems of injustice and oppression”, is not a charitable purpose. Yet these all appear to be the most prominent, explicit reasons behind the LC decision to dismantle itself.
In order for the decision to dismantle LC to be seen as advancing its charitable purpose, the trustees would need to explain why they regard that choice – the equivalent of a single massive, terminal grants round ending in three years from now – as the best way of preventing poverty, saving the environment, promoting racial harmony, advancing health and human rights, citizenship and so forth.
That is not the case that they have made publicly.
The most important issue for most readers is whether LC’s approach is credible, evidence-based and will actually produce a better world, but it isn’t straightforward from the LC rationale that it is charitable either.
