Phi Newsletter: December 2013

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

Major Giving News

University school to receive £20m

The University of London’s school of Oriental and African Studies are to receive a £20m donation to advance the study of South East Asian art.

The money was awarded by the Alphawood Foundation in Chicago, whose founder Fred Eychaner, a broadcasting tycoon, is a former Asian art student at the school (SOAS).

Speaking on the donation Professor Paul Webley, director of SOAS, said that it will have a “transformational impact” on the school, by providing funding for 80 scholarships and three academic posts.

“We are thrilled to be working with Alphawood on this visionary and ambitious project,” he said.

“SOAS has been studying and interpreting the development, languages, arts and cultures of Asia for nearly 100 years and this project will draw on that knowledge as well as further reinforce our position as a world-leading centre for the study and interpretation of South East Asian art.

“We aim to attract the highest-calibre candidates for the new academic posts and will reach out to our contacts across the region to attract students, curators and scholars, enabling a new generation of South East Asian art experts.”

Firefighters raise £1m

Supporters of The Firefighters Charity have raised £1m through donations to its textile recycling scheme.

Using this scheme, the charity has diverted more than 7,000 tonnes of clothing from landfill sites since 2009. Its first textile bank was founded at Kettering Dire Station thanks to the support of Northamptonshire Fire and Rescue Service, and now, there are now more than 500 clothing banks across the country where donations can be left.

Chief Executive John Parry said: “We would like to say a huge thank you to all of our supporters who have recycled with us over the last four years – they have helped us to reach this huge landmark for income from recycling.

“We do however, need people to continue to support the scheme and help us keep firefighters fit, healthy and happy so they can continue saving lives.

“It costs £9m a year to keep The Fire Fighters Charity running and with no government funding, we rely on the donations and goodwill of our supporters.”

£5m donated to typhoon relief

The Friends of Dorset County Hospital have donated £50,000 towards the development of its specialist dementia ward.

The ward, which has done much to improve the support offered to patients, has already had its day room refurbished to look like a lounge and dining room from the 1950s, complete with vintage furniture and fittings and authentic household appliances such as a television and radio.

The money from the Friends will be used to remove the central nurses’ station to create a seating area for patients, create clearer signs and colour coded walls, railings and doors to guide patients around the ward and add to the day room. Portable touch and sensory equipment will also be purchased to help patients who are bed bound.

Speaking on the donation, Healthcare Assistant Samantha Watt who runs the Memory Lane Room, said she and her colleagues were extremely grateful for the Friends’ funding, adding that ‘The nurses’ station can be intimidating and confusing for patients so removing that will make a big impact and we are going to make it much easier for patients to identify the different areas of the ward. We’ll also be able to refresh the Memory Lane room which is fantastic. We can’t thank the Friends enough.’

Friends Chairman John Weir said they were delighted to be able to fund these improvements: “We do feel that dementia is an underfunded area generally and there’s a growing need. The Barnes Ward team have already done a great deal for patients and we are really pleased to help them further improve the care and support for elderly people coming into hospital.’

Next section: Report

Report: Coutts UK £1m Donor Report.

For this month’s edition of our report section, we have included our summary of the Coutts UK £1m Donor Report. This report is the sixth edition in its history, and was authored by Dr Beth Breeze of the University of Kent’s Centre for Philanthropy.

Findings of the report


The report begins by acknowledging the fact that, encouragingly, million pound donations in the UK have now recovered in comparison with previous years, and have reached their highest level in terms of value since the global financial crisis in 2008/09.

The point is also made that for this edition, the data has been collected in a slightly different way. Unlike in previous years, the data has been based on the 2012 calendar year and not according to the financial year as before. The reason for this is because Charities in the UK can have a financial year that ends in any month, and in England and Wales they are allowed 10 months after their year-end to submit these accounts to the Charity Commission.

This may be the reason why overall, a smaller number of gifts have been found according to the research in 2012 compared to 2010/11 (as those made in 2012 have not yet reached public record).

Number and value of million pound donations

As is mentioned above, donations worth £1m or more have risen by 9% to £1.35b in 2012, up from £1.24bn in 2010/11, reaching their highest level since 2008/09.

The value was derived from 197 donations – the third highest number of £1m-plus gifts on record since the financial crisis in 2006. When the £512m donated between the 6th April – 31st December 2011 are also taken into account, the accumulated value of £1m-plus donations made since 2006 has risen to reach almost £9bn.

An increase in the average value of gifts also means that the total value of £1m-plus donations increased in 2012, despite a drop in the number of gifts from 2010/11. Although this rise is total giving is obviously a welcome statistic, the point is made that the annual number and value of £1m-plus donations tends to fluctuate rather than show a continuous trend in any one direction.

Average size of million pound donations

In 2012, the average donation size also increased along with the number of donations.

The average (mean) value in 2012 of £6.9m was significantly higher than the 2010/11 mean of £5.3m. However it should be noted that this figure can be deceptive, as it is strongly influenced by some of the outlying larger donations. The median value is arguably a more useful indication of the average donation, and this has increased to a record £2.3m from £2m.

Because of the high number of first-time million pound donors who will then go on to make even larger donations in future, the mode has remained virtually the same at £1m. The median donation has also stayed fairly static in previous years, however, this was at a record high in 2012 due to a large number of big donations.

Value of £1m+ donations

Last year, more than half of all million pound gifts (56%) were worth £2m or more, with some (17%) of all gifts worth over £10m, including one £100m donation.

As was also the case in previous years, the largest single donation was ‘banked’ in a private charitable foundation and will be distributed over time, rather than immediately distributed to front-line charities.

The trend towards larger donations suggests that donors are either feeling wealthier or are giving a greater proportion of their wealth. This is trend may also be explained by increased investment in major donor fundraising.


According to the study, 22% of million pound donations were made by individuals, collectively accounting for 32% of the total value. However, the point is also made that individuals are most likely responsible for the decisions behind a larger share of these donations through their own personal foundations

Those foundations (both personal and professional) were responsible for 71% of the number of million pound donations, although these accounted for 62% of the total sum donated.

Corporate donations dipped slightly in 2012, accounting for just 7% of the number of million pound donations in 2012, and 6% in terms of total value. This figure corresponds with recent data produced by the Directory of Social Change which found corporate giving in the UK has dropped.

In 2012, 98 unique donors gave gifts worth a million pounds or more. The vast majority (86%) of donors gave a single gift of this size. Fourteen donors, however, gave multiple gifts of £1m or more.

According to the research, these findings are also in line with previous years, as most donors will have a particular passion or strong relationship with one charity and make smaller gifts to the other causes they support. Most multiple million-pound donors are institutions rather than individuals: the Wellcome Trust was the most prolific, making 37 separate gifts worth £1m or more in 2012.

Location of million pound donations

Perhaps unsurprisingly, London maintains its status as the seat of UK Philanthropy, which is in keeping with the city being the centre for wealth in the UK. Almost two thirds (63%) of all 2012 donations worth £1m or more came from this location.

Recipients of million pound donations

‘A total of 156 organisations were recipients of million pound donations in 2012 [1] – fewer than the 191 recipients in 2010/11, but in line with the trend for previous years.’

The vast majority of these organisations received only one donation worth £1m or more (139 charities, or 89% of all organisations).

The two recipient organisations receiving four gifts each, as well as the three organisations receiving three gifts each, were all higher education institutions. This is in keeping with a key finding in previous reports – as only a small group of organisations, notably universities, receive more than one such million pound gift in any given year.

Distribution of million pound donations

2012 marks the first time that charitable trusts and foundations have been replaced by higher education as the most popular destination for million pound donations.

One in four (24%) of donations were given to higher education, accounting for 42% of the total value of all million pound donations made in 2012. Indeed, six of the ten biggest donations were given to universities, all of which were worth £30m or more.

Foundations came in as the second most popular destination for million pound donations in 2012, receiving 20% of the total value of gifts. However, these transactions were still the largest at an average of nearly £14m, including three of the four biggest donations, all worth £60m or more.

According to the report, the popularity of universities as recipients is probably due to at least two key factors. Firstly, they are more likely to be viewed as credible institutions in terms of their permanence, scale and governance. Secondly, a key factor has been the government’s matched funding programme that ran from 2008 to 2011. It will be interesting to see if enthusiasm for giving to this cause is maintained once this incentive is removed.

Discussing the Findings

Looking beyond the data used, this report also discusses a number of trends in philanthropy that are worth highlighting.

For example, the 2008/09 economic downturn and the resulting policy of economic austerity continues to affect funders and charities alike in terms of their behaviour. There are some major philanthropists who are actively seeking to leverage their assets, including their endowment and brand, in order to create change.

Furthermore, the launch of Big Society Capital has highlighted approaches to social investment – which has been pioneered by a number of major philanthropic organisations and high net worth individuals.

How does the changing context influence philanthropy?

Behind individuals, the state remains the second largest funder of charities in the UK. According to the 2013 Civil Society Almanac, statutory funding accounted for £14.2bn in 2010/11 compared to £16.5bn from individuals. However, it is noted that in the report that the level of state funding has fallen in recent years. The coalition government produced a deficit reduction plan in May 2010 that predicted a fall in public expenditure of roughly £30b in real terms between 2009/10 and 2015/16.

The Almanac also states that, assuming voluntary sector income from government decreases at the same rate as total government spending, the UK voluntary sector could lose around £3.3bn over this period. There are also various implementations of spending cuts from different parts of national and local government, making it difficult to predict the long-term impact on charities in different sectors and different parts of the country.

Charities have also begun to receive government funding in a different way. As over the last decade, there has been a shift away from government grants to government contracts. The 2013 Almanac states that in 2010/11, £11.2bn of government funding (79% of all government funding for charities) was for contracts for service provision – a real increase of £6.7bn (151%) since 2000/01. Between 2003/04 and 2008/09, grants from government reduced year-on-year by £2.5bn. Between 2008/09 and 2010/11, grants from government remained roughly static in real terms, and in 2010/11 grants from government were worth £3.0bn.

The social enterprise sector is also growing, with estimates suggesting that there are 70,000 of them in the UK employing around one million people. Its contribution to the economy has been valued at over £24bn.

Donors, whether they are individuals, private foundations or corporate foundations, are meeting these challenges in a number of ways.

How has the philanthropists’ toolkit expanded?

As is mentioned above, there has been a great deal of interest in social investment in recent times, and although such a move might not be appropriate for some organisations in the UK, there are now more organisations making use of a more sophisticated funding ecology, including loans, equity and patient capital.

As the field continues to emerge, the market has also seen the development of investment vehicles that involve both government backing and philanthropy. For example, since the launch of the first Social Impact Bond (SIBs) designed to reduce re-offending, there are now at least 13 of these bonds in the UK, and the appeal of the model is demonstrated through adoption in other countries including US federal and local governments.

By definition, SIB’s are a form of outcomes-based contract in which public-sector commissioner’s commit to pay for significant improvement in social outcomes for a defined population. According to the report, these are an innovative way of attracting new investment around outcomes-based contracts, as they use private investment to pay for interventions that are delivered by service providers with a proven track record. Furthermore, they also provide up-front funding for prevention and early intervention services and remove any risk that interventions do not deliver outcomes from the public sector.

How do foundations use their assets?

According to a recent report published by the Association of Charitable Foundation (ACF) in 2012, there are around 900 endowed foundations in the UK with an income of over £500,000. With collective assets of £48.5b, they are responsible for £2.3b in charitable spending per year.

In recent times, there has been an increasing focus on how private foundations manage their endowments. This has been manifested in a number of ways.

In 2012, the ACF published a report highlighting the difficulties foundations are facing in terms of both lower investment returns, and the increasing demand for funding in the face of worsening economic conditions. This report explored the governance and financial management of endowed foundations, highlighting how they can use their endowment to achieve their mission.

As well as, foundations are also starting to consider the wider impact of their investments, or how their management of their endowments can help them to better achieve their aims. This might involve taking environmental, social, governance or ethical factors into consideration in investment decision-making processes – or adopting social investment.

Others are actively attempting to leverage all of their assets in order to achieve their aims. For example, in a 2013 report by ACF, Anna Southall, a trustee of the Barrow Cadbury Trust stated that they seek to leverage “all the assets to achieve our goals, including voting powers; adopting an ethical framework; using our location by sub-letting space or making desk space available; using our intellectual resources by having in-house experts; and wielding our brand and reputation – as well as setting aside 5% of our assets for social investment”. If spending at the current rate is sustained, the Trust could conceivably disappear over the next 30 years, although trustees have not taken the decision to spend out.

In terms of using all assets available, there are also foundations that make grants from both the capital in addition to their income. These foundations often cite the motivation of preventing future generations from paying for the consequences of issues that can be addressed today.

How are philanthropists collaborating?

It is noted that in the report that not-for-profit legal advice services (covering areas such as welfare benefits, housing, debt, employment, immigration and housing) have been hit particularly hard by the changing economic and political climate.

In response to this, groups of funders including the Baring Foundation, Comic Relief and Unbound Philanthropy have agreed to collaborate on a programme to help advice agencies establish more sustainable footings and to influence the wider policy and funding environment. Elsewhere, the Social Impact Investors Group has also been established in order to discuss developments and investment opportunities in the social investment market.

Clickhere for a full version of the report.

Next section: Phi Database Update

Phi in Numbers December 2013

With the number of donations in the database fast approaches half a million, we have decided to survey the spread donations from Phi’s four main donor types into each of Phi’s 18 activity types. (These activity types include Trusts/Foundations, Individual Donors, Companies and Other Grant Making Bodies) and the survey includes all donations listed in Phi from the year 2006 to 2013.

Below, we have included a bar chart displaying the income sources of each of Phi’s activity types. The blue sections represent donations from trusts & foundations, followed by individual records, then companies, and finally other grant making bodies in purple.

December Graph

So for example, we can see that donations from Trusts & Foundations make up a substantial proportion of the records in all activity types, with the exception of Education/Training and the Elderly, where donations from Individual feature the most heavily. Elsewhere, donations to Sport & Recreation related causes appear to receive over 60% of their publicly acknowledged funding from Other Grant making Bodies.

With the data presented in this way, we can get an interesting idea of which areas different donor types may be interested in funding.

Next section: Profile

Profile: The Charles Wolfson Charitable Trust

The Trust was established in 1960 by Charles Wolfson, who was a member of the wealthy Wolfson family and the son of Sir Isaac Wolfson, who was himself a notable Scottish businessman and philanthropist who made his name with Great Universal Stores.

An intelligent man with an aptitude for mathematics, he first wished to train as an accountant, unfortunately however, he could not afford to do so. Instead, he began his career in Glasgow as a salesman working for father, who owned a business selling furniture in the local community.

It was not until 1920 that he Isaac moved to London to start his own business selling clocks, mirrors and upholstery, and it was also there that he met and married his wife Edith Specterman in 1926.

His involvement with Great Universal Stores began in 1930 when he was exhibiting at a trade fair in Manchester City Hall. Its Director at the time, Goerge Rose, was impressed with his display and ordered 500 clocks, which for Wolfson at the time was a big order. The pair then began working together, and Wolfson eventually became GUS’s chief buyer whilst also retaining his own business.

Wolfson gradually acquired more shares in the company using cash lent to him by his father-in-law who owned a chain of cinemas and his friend, Archibald Mitchelson. He progressed further in the company and by 1932, he had become joint Managing Director with George and by 1934, he had risen further to become its sole Managing Director.

In his first eighteen months with the company, Wolfson rapidly streamlined and rationalised its operations, and a loss of £55,000 in 1932 became a profit of £330,000 in the following year. From 1934 onwards Wolfson acquired companies with large Hire Purchase debts and property assets, some for G.U.S. and some for his own business. These acquisitions provided cash for more acquisitions and further expansion.

As the Second World War approached, Woflson, who was Jewish, reasoned that if Hitler won the war his businesses would be finished, however if not, his opportunities would be enormous. He was proven right, as over the course of 10 years from 1938 to 1948 GUS’s policy of aggressive expansion led to a jump in value from £1.9m to £16m.

By 1970, Sir Isaac had sold his private business and handed over control of G.U.S. to his son Leonard, the brother of Charles Wolfson, after whom the foundation is named. Today, his foundation is still managed by several members of the Wolfson family, and it supports the encouragement of medical studies and scientific research, the advancement education or child welfare, religion and the relief of poverty.

The foundation reported an income of £6,721,973 and an expenditure of £6,539,112 in the year ending 05th April 2012. Factary Phi has 371 records of donations made to various organisations totalling £10,838,503 since 2006. Based on these, the average size of grants made to various causes is £30,878.

The largest proportion of donations have been made to Welfare with 137 records, followed by Health (91), Education (77), Disability (18), Children/Youth (15), Arts/ Culture (11), Religious Activities (8), Animals (3), Heritage (3), Development/Housing/Unemployment (2), Elderly (2), Sport (2), Environment (1).

The Trustees

Lord Simon Wolfson

Lord Simon Wolfson studied law at Trinity College in Cambridge and then began working as a sales consultant for clothing retailers Next in 1991. His father, Lord Andrew Wolfson of Sunningdale was the company’s Chairman at that time, and Simon would also rise to a senior position with the company, becoming its Chief Executive in 2001. He still holds this position, and he has also founded the £250,000 Wolfson Economics Prize.

Dr Sara Levene

Dr Sara Levene specialised in paediatrics at Cambridge University, and she was for many years an adviser to the Child Accident Prevention Trust and the Foundation for the Study of Infant Deaths. She also worked in the UK and Europe on safety standards and product safety, and she was involved with Association of United Synagogue Women. She is a governor of the Hasmonean Primary School, a Trustee of the JCL Trust, and JPA UK.

Andrew Wolfson

Andrew Wolfson is a former a Chief Executive of the Carphone Warehouse Group plc and he is also a trustee of The Benesco Charity and The Music in Secondary Schools Trust.

Lord David Wolfson

Lord David Wolfson is a Conservative Peer and he was Chairman of Great Universal Stores until the year 2000. He was also Chairman of the Alexon Group plc from 1982 to 1986, Chairman of Next plc from 1990 to 1998, Chairman of William Baird from 2002 to 2003. Since 2001, Wolfson is non-executive director of Fibernet, and chairman since 2002. For Compco, he was chairman from 1995 to 2003. He was Knighted in 1984, he was made a life peer with the title Baron Wolfson of Sunningdale, of Trevose in the County of Cornwall on 26 March 1991. He is also a trustee of the Benesco Charity and he is a vice president of The Patients Association.

Next section: News

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