Phi Newsletter: July 2013

Welcome to the July 2013 issue of the Factary Phi Newsletter.

Major Giving News

Shipping tycoon sinks £10m into new Tate Modern extension

Billionaire ship-owner Eyal Ofer has donated £10m towards the cost of a new extension at the Tate Modern gallery.

Speaking on the donation Mr Ofer, who is chairman of London-based Zodiac Maritime Agencies, said that it will ‘(enable) an iconic institution to enhance the experience and accessibility of contemporary art’. This latest donation will mean that only 15% of funding for the project remains to be found.

A Monaco resident, Eyal Ofer is a well-known modern art enthusiast who has previously supported projects such as Gloriana, the royal barge constructed for the Queen’s diamond jubilee, and he has also had the Tate Modern’s third floor exhibition space named after him.

The Ofer family has had quite a history of charitable giving over the years. His father Sammy, who founded the family business and served in the Royal Navy during the Second World War, gave £20m to the National Maritime Museum in 2008 to support its new £35m wing, and he also funded the restoration of the Cutty Sark in Greenwich.

The £215m development will increase the capacity of the Tate Modern by 60% when it is completed, and it is expected to be finished by 2016.

University receives £1m donation

The University of Kent is set to receive a substantial gift of £1m from serial entrepreneur and philanthropist The Hon Charles Wigoder.

Considered to be one of the biggest single gifts from an individual in its history, the money will be used in order to fund the extension of the University’s award-winning Kent Law Clinic.

Work is expected to begin next year on the new building, which if finished on schedule will coincide with the University’s 50th Anniversary. Speaking on the donation Professor John Fitzpatrick, who is Director of the Kent Law Clinic, said: ‘Everyone connected with the Clinic is hugely grateful for this major donation to our fundraising campaign.

This exciting new building for our Law Clinic will enable us to expand significantly our pro bono service to the public, which in turn will mean that more of our students will have the opportunity to learn about law through hands-on case work experience.

Our new mooting room will also enable students to hone their advocacy skills in a realistic courtroom environment.

Vice-Chancellor Professor Dame Julia Goodfellow also said: ‘We are delighted that Charles Wigoder has chosen to make this very significant donation to support the University’s award-winning Kent Law Clinic.

‘As a highly successful alumnus of the University, it is very pleasing that Charles has chosen to support a project that will ensure many more of our law students are able to gain first-hand experience of case work, which will provide them with a real advantage when they graduate.’

Lloyds of London donates to veterans charity

Specialist insurance market Lloyds of London have donated £200,000 in support of soldier’s charity, Veterans Aid.

The latest donation to come from Lloyds Patriotic Fund brings the total given to the armed forces charity over the last 10 years to over £2m. The charity works to support ex-servicemen and women who struggle to re-integrate into society by providing outreach programmes and also emergency accommodation when necessary.

Chairman of Lloyds Patriotic Fund, Michael Hardingham said: ‘It is a privilege for Lloyd’s Patriotic Fund to work with Veterans Aid, often referred to as the A&E of the Veteran’s World, and to support the vital work they do in helping veterans who have experienced extreme difficulties get back on their feet.’

Dr Hugh Milroy, CEO of Veterans Aid, said, ‘We are utterly delighted to be recipients of such a generous donation and proud that Lloyd’s, in making the award, acknowledges the value of the work that we do.’

Next section: Report

Report: Growing Up Giving

For this month’s edition of our report section, we have included a summary of a recent report on independence in the voluntary sector entitled ‘Independence Under Threat: The Voluntary Sector in 2013’.

The report was initiated by the Baring Foundation and was conducted by The Panel on the Independence of the Voluntary Sector. The research itself was intended to investigate and assess the importance of ‘independence’ in the sector and how this can be maintained.

The Context for the Report

The combined effects of the current economic downturn and some significant cutbacks in spending are having a serious effect on the most vulnerable members of society. As a result of this, the voluntary organisations that support them are facing an increasing demand for their services with a reduced income.

According to the report, the number of people relying on food parcels has doubled and homelessness is also increasing across the country. Calls to the NSPCC’s neglect helpline also doubled between 2009/10 and 2011/12 and the number of children in need increased from 694,000 in 2009/10 to 736,400 in 2010/11. State support is also being withdrawn altogether in some areas of legal aid, which in turn dismantles the structures that enable citizens to hold it to account, for example, for failings in the benefit system.

Where the demand is particularly high, many organisations face having to close or reduce their services, and financial resilience to this is weakening. According to a survey of the top 750 charities conducted by New Philanthropy Capital, more than 65% of these charities have been forced to cut their frontline services. Another recent survey of charities found that one in six believed they may face closure in 2013, half had used their reserves to cover shortfalls in income over the last year and more than eight out of ten said they thought the charity sector was facing a crisis. Around half of all organisations reportedly had no reserves left.

Despite the difficulties, many charities continue to provide support to the most vulnerable. The report suggests that they can only continue to do this effectively as long as they remain independent – able to make their own choices and, crucially, combat or voice concerns over decisions made by government that they perceive to be detrimental to the disadvantaged groups they support. The report highlights that as government provides up to 36% of the total income of the voluntary sector and sets the policy, tax and regulatory environment in which charities must operate, the state remains the ‘most powerful single influence on the voluntary sector’. There have been some concerns over the way the state is exerting undue influence over charities and the voluntary sector in general.

The voluntary sector’s relationship with the state is therefore under scrutiny in the report, which aims to highlight how charities can remain independent from the state. The report begins by emphasising that maintaining independence is what will keep the voluntary sector distinctive, trusted and effective in an increasingly unstable financial climate moving forward into 2013. Based on its findings, it is argued that if the sector is no longer trusted by the public as independent, it will quickly lose the essential financial support required in order to tackle social problems and to provide advice, support and services to vulnerable members of society.

Characteristics of Independence

The report shows that independence matters in order for the voluntary sector to remain ‘distinctive, trusted and successful’.

Included in the full report is a ‘Barometer of Independence’ which is used to help identify and measure what an ideal level of independence might look in the voluntary sector. The Barometer identifies three main areas of independence – of purpose, of voice and of action – and highlights how internal behaviours within organisations can support these three areas and also how the ‘climate’ (environmental factors – including funders, partners and regulatory bodies) can effectively support them. The barometer shows that ‘a respect for independence must underpin all (internal) behaviours and environmental factors’ for independence to be achieved.

Power in the Voluntary Sector

The report also outlines that independence is more easily achieved and more easily guarded from a position of strength – or ‘power’. There are three main sources of power for voluntary organisations:

Financial Power: a diverse range of income streams allows charities to walk away from funding which takes ‘organisations away from mission’.

Brand Power: charities with strong membership / volunteer bases can influence change and inspirational leadership can inspire wider support.

Knowledge Power: charities with a strong mandate formed from a clear evidence base, with clarity or purpose / clear mission.

The report outlines that the amount of power a charity has is directly related to how much independence it can achieve. Charities supporting disadvantaged groups are more reliant on government funding and so do not have ‘financial power’ – so, when government cuts strike, they are the most affected. They sometimes then look to take on funding which is not directly in line with their purpose, just to maintain operations. Smaller charities can struggle with the increasing bureaucracy of statutory funding procedures and commissioning processes – this means they can often form partnerships to compete for grants and this can dilute their mission, if not done correctly. Most large organisations do have sufficient financial, brand and knowledge power to be independent but the Barin Foundation hopes to hear from larger organisations in the coming year regarding their experiences of independence in an increasingly difficult financial climate as it believes even the largest charities are facing a loss of independence.

The Six Challenges

Together with a lack of power, last year six key challenges were identified in the report that can affect independence of purpose, voice and action. These were:

  • A blurring of sector boundaries leading to a loss of identity and respect for independence.
  • Ineffective safeguards/regulation in protecting independence.
  • Threats to independent governance by central and local government.
  • Threats to independence of voice.
  • Statutory funding and contracting arrangements that fail to support independence.
  • Lack of consultation and involvement over vital funding and policy issues.

Unfortunately, the report shows that all of these challenges have become even more pronounced over the past year, with only’ threats to independent governance’ being judged to have remained at the same level of concern, and not become worse 12 months on.

Looking ahead into 2013, the following recommendations were made in the report in order to correct and combat these issues:

  • A stronger sense of the unique identity of the sector is needed so that respect for its independence can be realised. To this end, a debate should be led by the charity sector itself into exactly what constitutes a charity, and it should consider not just charities but also the wider voluntary sector. Furthermore, calls to remove charitable status from those that mostly receive state funding should be resisted, as mission (not money) is key. It is also considered vital that charities act accordingly if they enjoy this status, and sector wide bodies should also take the time to express how important the independence of the public sector is, along with the effective delivery of its services.
  • Improved safeguards and regulation is also recommended, with an annual report on national compliance produced by the Cabinet Office and stronger leadership in all areas in order to back up Compact agreements. The Charity Commission should also have sufficient funding in order to promote independence, the 12 week period for consultation should be reintroduced and there should ideally be a clear separation between funders and regulators of exempt charities.
  • Ministerial direction or control of a charity should be prohibited, as is the case in Scotland.
  • Enhanced Consultation and involvement by the Government, allowing infrastructure bodies to hold discussions on how to strengthen the sector’s influence and put a strategy in place.
  • Stronger independence of voice. Gagging clauses and controls on data should be removed and the campaigning rights and independence of voluntary organisations should be strengthened.
  • Commissioning and funding models should ideally allow all voluntary sector bodies to give their best. To this end, guidance on the new Public Services (Social Value Act) 2012 should result in qualify and other social value being considered alongside price in determining social value. Better safeguards should also be introduced in order to protect sub-contractors that deliver services in the Work programme and elsewhere. There also needs to be a debate between the Sector and the Government into which funding models will enable it to operate at its best, while also recognising its diversity and the differences between different sectors.

Click here for a full version of the report.

Next section: Phi Database Update

Phi in Numbers July 2013

This month we have uploaded 6,751 new records to the Factary Phi database, which takes us to a total of 426,846 searchable records.

The data in the latest upload is taken from quite a large number of different UK charities, including the NSPCC, Crisis, Motability, The National Theatre, Great Ormond Street Hospital, and more. In light of this data, we have decided to include a breakdown of these new donations, split according to the various activity types that are listed in Phi.


As is demonstrated by the graph above, 1,851 donations were made to Arts & Culture related causes (just over 26% of the upload), with the smallest number of donations (aside from those to General Charitable Purposes at 0.21%) being made to organisations working with the Elderly (0.51%).

When comparing this month’s upload to the database as a whole, it is interesting to note that donations to Arts & Culture related causes are particularly well represented (26% of the upload compared with just over 14% of the database overall). Similarly, donations to both Children & Youth and Disability also feature heavily, with 1,543 and 1,003 records of donations making up a combined 37% of the total number of records to be included in this month’s upload.

While these three activity types (Arts/Culture, Children/Youth, Disability) account for well over half the total amount of donations included this month (63%), it is also interesting to note that one of the smallest activity types represented in the upload, Environment (1.67%), accounts for by far the largest proportion of the upload in terms of overall value.

From the 6,751 records of donations that have been uploaded, these 113 donations made to environmental causes represent 65.74% of the upload in terms of value, worth a minimum of £56m.

Next section: Profile

Profile: The John Ellerman Foundation

The John Ellerman Foundation was established in 1971 according to the wishes of Sir John Ellerman, a prominent natural historian and philanthropist. Although he was a capable businessman in his own right, he inherited his wealth from his father, also called John Ellerman.

Sir John Ellerman Senior was born in 1862 and made his fortune buying up and managing businesses, including newspapers, breweries and property and, most publicly, shipping companies. After moving to London at a young age, Ellerman turned down a partnership in one of the leading accountancy firms of the day to start his own, named J. Ellerman & Co. He then used this expertise to help identify under-priced companies that would be ideally suited for takeover.

Using the skills he had learned he became increasingly successful with this tactic and by 1892, Ellerman made his first move into shipping, selling one successful company for £1.8m and eventually buying and combining more in order to form his own shipping company, Ellerman Lines. The company continued to expand and by 1971, Ellerman Lines had formed an eighth of Britain’s entire mercantile shipping tonnage, equalling that of France’s entire merchant fleet.

Ellerman was also a major shareholder in the Financial Times, the Daily Mail and the Illustrated London News, and at the time of his death, his fortune was estimated at £36m, a sum equivalent to roughly £1.5b in today’s terms.

He left two children after his death in 1933 and his son, the younger Sir John Ellerman, inherited a fortune close to £20m at the age of 23. However despite being a capable businessman, he had no interest in continuing to run his father’s shipping business, instead becoming a natural historian and a notable expert on the study of rodents.

Like his father, Sir John senior, he was known for being somewhat publicity shy and by the late 1940’s, he spent an increasingly amount of time in South Africa with his wife Esther, reportedly in order to avoid both the British press and weather.

The pair had no children, and shortly before his death in 1973, he transferred 80% of his shares from Ellerman Lines Ltd into the Moorgate Trust Fund and the New Moorgate Trust Fund, which would later merge to form the John Ellerman Foundation.

For the financial year ending 31st March 2012, the trust reported an income of £1,573,000 and an expenditure of £5,055,000. Factary Phi holds 794 records of donations made from 2005 to 2012 representing a minimum of £16,492,587.

According to the foundation’s grantmaking policy, 50% of its funding is allocated towards causes associated with Welfare, followed by the Arts (25%) and the Environment (25%). From the records that are listed in Phi, the largest number of donations have been made to Arts/Culture related causes (166), followed by Health (124), Children/Youth (82), Disability (63), Environment (62), Welfare (55), International Development (39), Elderly (37), Education (35), Heritage (29).

The Trustees

Sarah Riddell

Sarah has a background in journalism and arts publishing, and she is currently Chairman of the Foundation after having served as a Trustee since the year 2001. As well as this, she is also Trustee of the Pilgrim Trust, the Sir James Knott Trust, Cicely Saunders International and the Castle Auckland Trust. Prior to this, she served as Vice Chairman of the Hammersmith Hospitals NHS Trust, and as a lay member of research ethics committees and of a government advisory body on clinical trials.

Vivian Gould

Vivian is a member of the Finance Committee for the foundation, and she is a Trustee of medical charity Cobalt, and the Stroke Association where she is Chairman of its Investment Committee. Prior to this, she worked for a number of different investment management companies and listed investment trusts. She was a founding Director of River & Mercantile Investment Management; an Executive with Gartmore Investment Management; and a non-Executive Director of Cooper Gay, a privately owned insurance and reinsurance group.

Diana Whitworth

Diana is a member of the Social Security Advisor Committee and she is also Trustee of Cranstoun, a charity which provides crisis and rehabilitation services for drug users, and of Headway East London. Prior to this, she was a Board Member for both the Big Lottery Fund and the Advertising Standards Authority.

Dr Brian Hurwitz

Brian has worked as GP in inner London for 30 years. During this career, he became Professor of Primary Health Care & General Practice and Head of Department at Imperial College. Currently, he is a Professor of Medicine and the Arts at King’s College, where he directs the Centre for the Humanities and Health and he is also a Trustee of The Lord Brock Memorial Trust and a Custodian of the Old St Thomas’s Operating Theatre, Museum and Herb Garret.

Hugh Raven

Hugh Raven is Managing Director of his family-owned holiday business, Ardtornish Estate in Scotland, a Director of Corrour Estate and he is also Chairman of the West Highlands Coastal Trust. He has previously served as an environment advisor to the UK Foreign Secretary and the Esmée Fairbairn Foundation and he was also board member of Scottish Natural Heritage and the RSPB.

Tim Glass

Tim is currently a member of the Finance Committee for foundation, after previously serving as its Director for over a decade. Prior to this, he finished his army career with the command of the British Gurkha Brigade in the Far East, before then serving as a Director at WH Smith and CEO of the Guidance Council UK. He is also a member of the Forces In Mind Trust Investment Committee and he is President of the Royal Hampshire Regimental Trust.

Next section: News

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