Phi Newsletter: February 2013

Welcome to the February 2013 edition of the Factary Phi newsletter.

Major Giving News

Social Entrepreneur reaches £1m donation goal

Social entrepreneur Charlotte Grobien has reached her target of donating £1m to charitable causes after making a £25,000 donation to an autism charity.

The gift was made to Ambitious About Autism, and will be used to help encourage young people with autism to get involved in raising awareness about the disorder.

Ms Grobien’s property initiative Give It Away donates profits, made from selling homes which her team redevelops, to charities.

He said: “I like to be involved in charity work that progresses young people’s lives. Being with Ambitious About Autism’s youth patrons reminds me why I trudge around wet building sites to raise money to support such great work.”

Anne Shinkwin, Ambitious About Autism’s director of fundraising, said the charity was “delighted” with the generous donation.

Peter Moore Foundation donates £10,000 to BSO

The British School of Osteopathy have made a fantastic start to 2013 after receiving a welcome £10,000 grant from the Peter Moore Foundation for their osteopathic clinics that support people suffering from HIV.

As the foundation begins to prepare for closure in 2014, 2013 will mark its final year of HIV and AIDS related support. Now 80, Sir Peter has urged philanthropists and charities to ‘take up the baton’ and continue to support people who suffer from the disease.

The foundation was one of the first to support work in this field during the early history of HIV/AIDS, and since then, it has put well over £2m into supporting a range of projects across the UK.

“We understood that the Foundation was closing after ‘this financial year’ (2012-2013) so did not imagine that there would be further support. This is fantastic news”, said Charles Hunt, Principal of the BSO. “It means that we can continue providing free osteopathic treatments to people with HIV at our award-winning community clinics at Southwark Bridge Road and in the Ian Charleson Day Centre at the Royal Free Hospital.

The BSO also won the 2012 Times Higher Education award for Outstanding Contribution to the Local Community. The award was given in recognition of its good work and free subsidised treatments in one of London’s most disadvantaged areas.

UK billionaires pledge their fortunes

A number of billionaires from Europe, Australasia and Africa have joined other leading philanthropists by publically committing to give away at least half of their fortunes to charitable causes.

Their commitments could not have come at a better time, with growing international debate over tax avoidance by companies and individuals and the moral responsibility of the wealthy to give back to society.

The Giving Pledge, which was established by Bill Gates and Warran Buffet three years ago has been designed to promote a debate over philanthropy and encourage more rich individuals to give their money more effectively to worthwhile causes.

Mr Gates, one of the world’s richest men whose own foundation has disbursed $25bn over the past decade, said that: “A lot were going to do it anyway but the pledge creates more of a movement, makes people do it earlier, collaborate and do it smarter.”

Past efforts by him and others to expand the pledge outside the US in countries including China have met resistance from donors, who because of cultural practices prefer to remain anonymous or, for reasons of politics or personal safety, do not talk about their wealth and philanthropy.

Some of the latest editions to their cause include Patrice Motsepe, the South African mining magnate estimated by Forbes to be worth $2.7bn, Vincent Tan Chee Yioun of Malaysia, who owns the Friendster social network site, worth $1.2bn, and Mo Ibrahim, the founder of the African Celtel mobile network, worth $1.1bn.

Other new members also include Andrew and Nicola Forrest from Australia; Victor Pinchuk from Ukraine; and John Caudwell, Chris and Jamie Cooper-Hohn and David Sainsbury from the UK.

Collectively, the new billionaires are worth $61bn according to Forbes’ latest estimates. That adds to existing wealth represented by the US members of $433bn, according to Glasspockets, a monitoring service run by the Foundation Centre in the US. It calculates health, education and human services dominate their giving.

Sir Richard Branson, the founder of the Virgin Group and another new member of the pledge, told the FT: “This makes individuals sit up and think. Hopefully the vast majority will realise there are better ways of using wealth than leaving it to future generations.”

He stressed his focus was less on charitable giving than support to “social enterprises” for environmental causes including carbon reduction, fostering entrepreneurship and conflict resolution.

Aviva raises £97,000 using Twitter

Aviva are set to donate more than £97,000 to charity Railway Children after the overwhelming support for the charity shown by fans using the social media platform, Twitter.

For the second year running, the players wore the charity’s logo over their kit in order to raise awareness of the fact that one child runs away from home every five minutes in the UK.

The insurance provider pledged to donate £1 to the charity for every tweet or retweet of support for the charity made during Norwich City’s premier league triumph over Everton.

For every tweet or retweet posted on Twitter on match day including the hashtag #1every5, Aviva pledged to donate £1 to Railway Children with the aim of reaching a target of £18,000. Last season, the community game activity raised £10,000. Fans got involved in their thousands making #1every5 trend number one in the UK.

Overwhelmed by the support of the British public – which included tweets from NCFC Director Stephen Fry, TV Presenter Jake Humphreys and comedian Ricky Gervais as well as NCFC footballers led by club captain Grant Holt – Aviva has generously increased their donation to £97,774. This reflects the full number of 97,774 individual tweets or retweets using the hashtag that were generated during the 24 hours of Saturday 23rd February, raising valuable awareness and vital funds for Railway Children.

The Marketing Director at Aviva Direct Insurance, Heather Smith, commented ‘We would like to thank all who showed their support for our charity partners Railway Children this weekend by tweeting the hashtag #1every5. This match offered us a fantastic opportunity for us to build on our year-round work with Railway Children, raising awareness and funds for the charity.’

Terina Keene, Chief Executive of the charity said ‘Many thanks to the British public for your amazing support and to Aviva for their kind generosity.’

Next section: Report

Report: Is the Third Sector Being Overwhelmed by the State and the Market?

The research was conducted on behalf of the Third Sector Research Centre by Simon Teaside, Heather Buckingham and James Reese as part of the TSRC’s Future Dialogues programme, a series of reports and events that aim to examine some of the main issues facing the sector. In particular, this report discusses the politics and marketization of the third sector and the overall place of TSO’s in the welfare system.

It begins by identifying two interrelated dynamic processes that demonstrate how the state impacts upon the third sector, the marketisation of the welfare state and the privatisation of welfare services. Marketisation can be defined as entering into, or participating In market competition in the service industry and privatisation is considered to be the transfer of ownership or delivery of the state services to private (including third) sector organisations.

These two processes have had a profound influence on the relationship between the government and some areas of the third sector, due in part to the introduction of procurement and performance measurement strategies. Not only do TSO’s enter markets to deliver public contracts, but they have also adopted private sector organisational structures, management practices, and similar ways of thinking and behaving. In order to better to discuss the issues mentioned above, the paper draws on quantitative evidence collated by TSRC, and on qualitative research in order to explore the consequences of privatisation and marketisation.

The Politics of the Third Sector and Marketisation

The report points out the role of TSO’s in service delivery and marketisation of the third sector has not been wholly welcomed. It argues that in the UK, While a great deal of the social enterprise agenda was driven by the left and those within the co-operative movement, there is now a ‘split’ between a those who favour a modernising ‘third way’ that attempts to marry both the dynamism of markets with social democracy and those who favour state provision of welfare.

Indeed, influential think tanks on the right such as Institute for Economic affairs have argued against the state provision of welfare, claiming that ‘many charities have become little more than government subcontractors, charging fees to provide services… very few charities now offer any alternatives to the statutory approach”.

What can we learn from the Quantitative Data

According to the 2008 National Survey of Third Sector Organisations (NSTSO), TSRC researches estimate that 36% organisations received some form of public money, either from central or national government. Furthermore, 14% of third sector organisations also regarded statutory funding as their most important source of income, and larger organisations were more likely than others to receive at least some form of public funding.

A separate analysis of the data found that 28% of organisations received ‘earned’ income through contracts or trading. However if membership fees or subscriptions are included as commercial income, this figure rises to 56% of the organisations surveyed.

An analysis of a sample of charity accounts collected by TSRC in partnership with NCVO suggests that around 79% of statutory income received by charities is of a commercial nature. This analysis reported in the NCVO UK Civil Society Almanac estimates that 38% of charities’ total income comes from statutory sources, while 55% of total income comes from commercial sources – over half of this is commercial income from statutory sources.

Based on this, the state as a funder has some significant influence over the third sector. Although longitudinal analysis is not currently available, TSRC analysis shows that commercial revenue has gradually become more important to general charities between 2000 and 2008. Commercial revenue has increased from 40% to 49% of total income and has even become a partial replacement for grants and donations.

Innovation, Competition and Collaboration

It has been argued that exposing TSOs to market principles will encourage greater innovation, however at the same time, the evidence also suggests that a reliance on this model could adversely affect TSO’s ability to innovate and improve the services they provide. While an exposure to these markets would certainly change the way TSO’s collaborate, research from Heather Buckingham into supporting people and homelessness service providers has suggested that a sense of competition between TSO’s could be detrimental to co-operative relationships with organisations.

The evidence suggests that overall, there has been a shift from niche provision – in which TSOs’ specialist skills were valued and resourced – to a single generic programme for all benefit groups – in which TSOs are treated merely as alternative providers.

According to the report, a popular claim from ‘social entrepreneurs’ is that organisations have to be tough by prioritising sales at the expense of social goals to protect the long term needs of their organisations. However TSOs often display considerable agency and creativity when negotiating tensions between social and economic objectives. They may be able to adapt to, or even shape, the unwritten rules of the game by positioning themselves as different entities to different stakeholders in order to access a wide range of resources.

Concluding Thoughts

It is noted in the report that there is a so called ‘tension field’ that is occupied by TSO’s in-between the state and the market has long been recognised. And as such, it would be unfair to suggest that the third sector is suddenly becoming overwhelmed by the state and the market. However with this in mind, there has also been an undeniable increase in revenue from large organisations that rely heavily on government funding, to the point where these streams now constitute over half of the sector’s income.

So What are the Broader Implications for TSO’s?

It has been argued that by fully engaging with the market, TSO’s can begin to more fully compete with private commercial providers and better deliver their services. However this competition is in many ways a double edged sword, as such an approach can potentially undermine a more collaborative approach between TSO’s attempting to achieve their goals.

In order to compete with private providers, TSO’s must often behave in a similar way to private firms. Unfortunately though, this can potentially come at the cost of their social goals. Some volunteers may even be discouraged from contributing to TSO’s that become more like private firms. Indeed, it is argued in the report that perhaps a split may even be emerging between TSO’s who increasingly rely on the market, and the wider third sector that depends on the contribution of private donations and voluntary effort.

A great deal more needs to be done to understand the relationship of the third sector with the state of the market. It is notable that many of the welfare services that are becoming privatised and marketised were originally developed by the third sector before being scaled up and adopted by the government. Future research might begin to explore the qualitative and quantitative dimensions of the third sector upon the state and market both in resisting marketisation and privatisation, and also in creating a more socially cohesive society.

To view the full version of the report, please visit this page.

Next section: Phi Database Update

Phi in Numbers: Database Update February 2013

During the course of this month, more than 5,000 new records have been uploaded onto the Phi database, bringing us to a grand total of 39,2260 records. The latest data to have been uploaded is made up of donations made to a number of UK universities, including the University of Cambridge, The University of London and the Royal College of Music.

For this month’s edition of our database update, we’ve decided to survey the number of donations made into all 18 subcategories across the non-profit sector from the years 2011 to 2012, and see how this compares to an earlier analysis of the database that was conducted in November 2010.

The graph below contains a breakdown of donations from the period and compares those from individual donors versus those from trusts and foundations. The blue bar represents individuals, the red represents trusts and foundations and the green represents donations from all other donor types.

Donations to the UK non-profit sector, 2011-2012, by subcategory

It is interesting to note that many of the trends shown in this graph also echo those shown in an earlier analysis of the entire Phi database that was made in November 2010. We see for example that the number of donations made to mental health charities from individual donors remain remarkably low, with the majority instead coming from other donor types and the remaining 20% coming from trusts and foundations.

Similarly, the number of donations made to education and training are still largely made up those from individuals. However in other subsectors such as Health, it is notable that an increasing percentage of donations have come from other donor types, rather than being made up of those from trusts and foundations. The same is also true of Animals, with an increase in donations coming from individuals, rather than trusts and foundations in previous years.

From this survey of Phi, we can see a possible indication of changes in funding trends across the sector in more recent years.

Next section: Profile

Profile: The Clore Duffield Foundation

The Clore Duffield Foundation was established in 1964 by the late Sir Charles Clore, who was one of Britain’s most successful businessman and prominent philanthropists of his day.

Born in Whitechapel, he was the son of Jewish immigrants from the Latvian city of Riga and in the 1950’s, he was a pioneer of company takeovers who became a household name in the UK and overseas.

After his death 1979, his daughter Vivian Duffield took over responsibility for the Foundation and also created her own in 1987 with the aim of continuing her family’s strong tradition of philanthropy. The two were then merged in the year 2000 to become the Clore Duffield Foundation, which to date has distributed over £50 million to charitable causes over the last decade.

The Core Duffield Foundation reports its main grantmaking focus to be upon cultural learning, creating learning spaces within arts and heritage organisations, leadership training for the cultural and social sectors, social care, and enhancing Jewish life.

The Foundations funding programmes are divided into two categories, these are its Main Grants Programme, and its Small Grants programme, although this one has reportedly been closed. Donations made by the Main Grants Programme usually range from below £5,000 to in excess of £1m and it should be noted that while the Foundation does occasionally make donations to the health and social care sectors, the majority of its support is directed towards the cultural sector, and in particular to cultural learning and to museum, gallery, heritage and performing arts learning spaces.

In the financial year ending 31/12/2011, The Clore Duffield Foundation reported an annual income of £5.6m and an expenditure of £6.7m. Factary Phi records 511 made the Foundation between 2005 and 2011, representing a minimum of £32.4m in funding.

In terms of size, the average grant made to charitable causes has been £63,494, and the largest single donation to have been recorded in Phi is a £5.5m grant made to the Southbank Centre as part of the Foundation’s capital campaign.

The majority of the 511 donations to have been recorded in Phi were made to Arts/Culture related causes (195 records). Below, we have also included a breakdown of how many donations have been made to all other activity types.

Education/Training (61), Religious Activities (58), Children/Youth (45), Health (34), Heritage (26), Welfare (17), Environment (15), Disability and General Charitable Purposes (11) Development/Housing and Sport (9), International Development (8), Rights/Law/Conflict (5), Elderly (4) and finally Animals (3).

The Trustees

Dame Vivian Duffield

Dame Vivian Duffield DBE is one of the UK’s most active philanthropists. She is thought to have given over £200 million to charity projects in Britain. She is currently Chair of the Clore Duffield Foundation and it is her huge efforts for good causes that have attracted attention. She has spent more than £1.5m on a leadership training programme to assist others working in the charity sector, and she is also ranked on the Sunday Times Rich List 2012 with an estimated personal wealth of £40m.

Sir Mark Weinberg

Sir Mark Weinberg is a South African-born British financier. He was born in South Africa and educated at King Edward VII School in Johannesburg. After receiving degrees in Commerce and Law he practised as a barrister and then later received his Master of Law at the London School of Economics and he specialised in Company Law. In 1961 he founded Abbey Life Assurance Company in London, which was one of the first companies to develop unit-linked assurance and where he formed one of the UK’s first retail property funds. In 1971 he went onto found Hambro Life Assurance, subsequently called Allied Dunbar, where he was managing director until 1983 (it is now part of Zurich Financial Services). Today, he is now the President of St. James’s Place, which he co-founded with Mike Wilson.

Maitre Caroline Deletra

Maitre Caroline Deletra is an Attorney with Lenz & Staehelin LLP where she has over 30 years’ experience in advising private clients, and specialises in estate and tax planning.

David Harrel

David Harrel has been a Board Member for Saville Group plc since 2011. Prior to this, he became one of the founding partners of the City law firm SJ Berwin LLP in 1982 and also served as Senior partner of the firm from 1992 to 2006. After retiring as a partner of SJ Berwin, David held a number of appointments including Chairman of Kyte Group Limited and Non-Executive director of Wichford PLC. His current appointments include Chairman of CPA Global Limited, Senior Independent Director of Rathbone Brothers PLC and nonexecutive director of Proven (UK) Ltd. Additionally David holds a number of trusteeships and consultancies including being a member of the Board of the English National Opera.

Next section: News

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