As Big Society Capital prepares to delve into dormant funds in advance of EU and FSA approval, Gordon Hunter ponders where else funds may linger in the not-for-profit sector. 

A letter from a sister Foundation:

Imagine our surprise and delight when a Mr Ebenezer Grabgrind asked us to take on his obsolete Clogs for Candlemakers Trust. The fund had lain dormant for decades, with just one surviving beneficiary, a Miss Candida Grabgrind (no relation). The process of converting from a restricted to a general area of benefit is, with Charity Commission guidance, quite straightforward; unravelling the Trust and its records, less so. We persevered, cornered Grabgrind’s solicitor, Scuttle of Grab, Nest & Grind (no relationship) and, 6 months later, unwrapped our nest egg. 

The fund value, over its forty year history, had reduced from £120,000 to £20,000 excluding grants to beneficiaries. In its final six months, £10,000 had gone to “professional fees”; the capital had been invested at less than a quarter of one per cent; we inherited the bare minimum of paperwork. Is this standard practice in the charity sector?

Yours sincerely,

Mr Gently Benevolent
Correspondent for the trustees

Grabgrind is a fiction but the transaction parallels reality. My point in airing the case (as Big Society Capital flexes its dormant muscles) is that there are thousands of these archaic or frustrated Trusts languishing in the pink-ribboned files of professional advisors all over the Country. Many of them are managed with probity and competence. Many more are buried in the archives, fulfilling no practical purpose (the original benefactors turning in their graves), and rapidly losing value whilst coughing up often unjustified fees. 

I would love to see the “Society of Trust and Estate Practitioners” campaign for the consolidation of dormant Trusts, converting them to wider benefit and maximising their investment potential.