Phi Newsletter: November 2013

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

Major Giving News

St Michaels Hospice to receive £1m

Herefordshire philanthropist Clive Richards has donated £1m to St Michaels Hospice as part of a recent fundraising campaign for a major refurbishment.

The donation comes from his personal charity, the Clive Richards Charity, which was set up in 1987 thanks to his hugely successful business and investment career.

Speaking on his donation the Hospice’s Chairman of Trustees, Alister Walshe, said that:

“Clive and Sylvia’s profound act of human kindness builds on the longstanding support that St Michaels’ has received from its community over the last 30 years, and will enable the hospice to double the amount of care it can give to family members affected by the life-limiting disease of a loved one.”

Thanks to his donation the first two phases of the scheme, comprising a new in-patient unit and complementary therapies suite is very close to becoming a reality, and it is now hoped that others in the local area will follow his example by donating to the Hospice.

“I have chosen to support St Michael’s Hospice because I feel passionate about the work that it does,” said Clive.

“The new hospice will play a vital role in the community and I believe that every penny being spent on the new development is needed, not only to make sure people are cared for at every stage of their illness but to support families through the most difficult of times.”

University nets £15m gift

Professor Jo Bradwell has donated £15m to the University of Birmingham.

An entrepreneur and himself a former student, Professor Bradwell founded the Binding Site, a university spin-out company in 1983. The company went on to develop the first developed diagnostic products for immune-deficiency and autoimmunity, then a range of important cancer tests.

His donation will be used to establish a new Institute for Forest Research at the University, which will study the impact of climate and environmental change on woodlands, and the resilience of trees to pests and diseases.

Speaking on his donation, Professor Bradwell explained, “The UK has the lowest woodland cover of any large, European country because of deforestation over the centuries. What little we have remaining is now under serious threat from climate change and imported tree diseases. The new forestry institute will increase our understanding of these challenges in order to help planners, owners and foresters maintain and improve the health of our woods.”

Professor Malcolm Press, Pro-Vice-Chancellor, University of Birmingham, said: “The University is ideally placed to integrate research and education in forests and forestry with its global strengths in related areas such as microbiology, ecology, climatology, and sustainability science. With our bold ambitions to build such a unique facility we intend to attract the best scientists who can work with us to make this centre the best in the world.”

Nick Blinco, Director of Development, Alumni and Business Engagement, said: “I would like to thank Jo and Barbara for their transformational donation. Their gift demonstrates the University’s ability to work in partnership with leading UK and international philanthropists, helping them to realise their ambitions and to make an impact in the world. Their support, together with the many thousands of donors to the Circles of Influence campaign – the most successful university fundraising campaign in the Midlands – are helping us to have an impact locally, nationally, and internationally.”

Rowling book sales to aid Eastern European children

Harry Potter author JK Rowling is set to donate £25m to the children’s charity Lumos.

Sales from her latest novel, The Tales of Beedle the Bard, along with a number of personal donations from the author will be put towards ending the abuses suffered by children in institutions across Eastern Europe.

Vicky Gillings, a spokeswoman for Lumos, named after a Harry Potter spell, said: “The power of one person to change things is incredible. Lumos helps governments and local authorities reform their care system. It is funded by JK Rowling and the sales of Beedle the Bard are a huge contribution.

“In the UK nowadays, it is almost inconceivable that children born with a disability would be taken from their parents and placed in large state-run regimented institutions.

“Unfortunately, it is still the case for eight million children around the world. For them, the practice of institutionalising children is still going on – it simply hasn’t gone away.”

The charity was founded by Rowling in 2005, who is herself a mother of three, who visited Romania in order to highlight the plight of many children in mental health institutions.

Lumos also works in the Ukraine, Bulgaria, Montenegro, the Czech Republic, Serbia and Moldova, returning disabled children locked up in institutions to their families. Now the author aims to expand Lumos’s work beyond Europe to the rest of the world.

Next section: Report

Report: Adapting to economic uncertainty in the voluntary sector.

For this month’s edition of our report section, we have included our summary of a recent report on adapting to economic uncertainty in the voluntary sector.

Introduction to ‘The New Normal’

The report begins by acknowledging the fact that that for many charities in the UK, the focus has now shifted away from simply managing in what is considered to be an economic downturn, to adapting in a somewhat uncertain environment that is now considered the norm, at least from an economic standpoint.

In the face of these conditions, many more charities are being forced to consider some bold steps to save themselves, including merging with other charities, utilising reserves and also making redundancies - all of which might be considered extreme in better times.

Part 1 - The current environment & the sector’s relationship with the government

Summary of Findings:

  • Overall, respondents were underwhelmed by the Government’s policies in recent times, with 58% reporting that moves by the government had resulted in a negative impact on levels of funding during 2012, and 53% reporting a negative impact overall
  • Despite introducing measures designed to support the sector and encourage giving, only 7% of those surveyed reported a genuinely positive impact from government measures
  • Year on year increases in demand have continued, with 67% of those surveyed expressing an increase in demand during 2012, and 72% expecting a similar increase in 2013
  • Of those surveyed, only a quarter were adequately resourced to meet the additional demand, with 63% having to cut back services to meet demand in other areas.
  • Public sector funding from trusts, Lottery and foundations continued to be reported as the most important income stream, although public sector funding saw a slight decline (-7%)
  • Most income streams, along with the report’s ‘anxiety index’ showed signs of slight recovery, with income from the public sector declining at a lower rate

Although 2012 is identified as a somewhat ‘rocky’ year for the relationship between the government and the Third Sector, it is noted in the report that the government’s commitment and support has continued into 2012, with ATM giving and new tax incentives recently being introduced.

New measures on Gift Aid are also to be introduced, such as the Gift Aid Small Donations scheme, which adds online filing and improvements to the administration of Gift Aid in charity shops.

Government departments and local commissioners are also paying closer attention to service outcomes, including increased use of ‘payment by results’, and there has also been a growing shift in focus from remedial to preventative interventions in tackling social challenges.

Even with this level of support, it is noted that in the report that charities that have been dealing with these issues for years will be typically much better placed to respond to new opportunities at both a local and national level. New measures, including the open public services agenda are intended to create a level playing field for charities and other ‘non-traditional ‘ providers, and it is hoped that the new Social Value Act will better allow those organisations to differentiate themselves from private sector competitors. Other measures have also been introduced with the aim of improving access to finance for charities with, for example, the creation of Big Society Capital.

Unfortunately however, many charities are still reporting problems as a result of government policies outside of these areas. Charities are feeling stretched by changes to welfare, and are also feeling the effects of cuts and other problems with delivering their services.

Respondents were asked to assess their experiences of Government policies, and to also provide a view on exactly how the demand and performance of their income streams had changed.

Part 2 - Response to the current environment.

Key Findings:

  • Respondents continue to favour fundraising to generate income when times are tough, in the face of other strategies. 64% of respondents planned to increase fundraising in current areas during 2013, and 56% were going to explore new fundraising options.
  • As well as this, a number of charities were also considering other options: 42% planned to use reserves, 29% to implement a pay freeze and almost a quarter (23%) indicated redundancies were on the cards. A further 21% of charities were either considering merging, or had merged with, another organisation in 2012

Alongside its usual analysis of the areas charities have typically explored when adapting to external pressures, this year’s report also explores several new approaches, including the use of social investment products, trading and social enterprises.

The results of the survey showed that while some charities have adapted rapidly, others have chosen to take a more conservative approach, in which, they focus more on continuing to provide their existing services at a consistent and high level. This approach is illustrated by the response of one charity, who said that: “[E]mphasis has been placed on ‘innovating’ [by other charities – but] why not on maintaining existing tried and tested, quality services? New does not always mean better.”


Key Findings:

  • According to respondents, fundraising continues to be a challenge with 93% of those surveyed reporting that the climate has gotten tougher over the last 12 months, with a further 89% predicting an even tougher year ahead
  • Investing in fundraising remains the predominant strategy being used by charities to help ride out the downturn. 85% of charities planned to invest in new fundraising methods, with 64% planning to increase fundraising in their current areas of focus and 24% of those surveyed indicating that they will employ more fundraisers over the next 12 months
  • 14% of charities reported an increase in attrition, which suggests that donors are adjusting to the new economic realities and feel more able to continue to support their favourite charities

Respondents to the survey were also asked what they considered to be their key fundraising challenges over the next 12 months. Similarly to last year, competition from other charities remained one of the biggest challenges as different charities all vie for a limited amount of money.

However in contrast to last year, respondents are now less concerned with donor uncertainty and donors having less disposable income in general. This could be because, for both fundraisers and the public, the feeling of apprehension and uncertainty around the economy has alleviated at least to some extent, as people become more acclimated to its bleak, but stable conditions.

Elsewhere, charities are still struggling to boost fundraising activity and, based on the responses to the survey, most organisations overwhelmingly favour a focus on fundraising over other strategies when their income is particularly stretched.

Working together: collaborations and mergers

Key Findings:

  • 5% of respondents had merged during 2012, and 16% were considering it during 2013 – which is down slightly from the one in five charities considering merging last year
  • The majority (66%) of charities who hadn’t merged said it was because they didn’t need to, however, 34% cited other reasons such as a lack of appropriate merger partners (16%), or they were worried about their charity losing its identity (10%)
  • The idea of working in collaboration with other charities remains popular, with 69% of those surveyed saying they had partnered with others, or were considering doing so
  • Joint programmes or service operations were the most common form of collaboration – accounting for 66% of joint activity. Sharing staff or back-office services was least popular, indicating perhaps that barriers remain, despite measures such as the introduction of the VAT cost-sharing exemption


Key Findings:

  • Economic pressures have been taking their toll, with 50% of respondents indicating that they had taken steps to reduce wage and salary costs during 2012
  • Of those that had reduced spending in this area, 31% had some form of restructure, 26% had made redundancies and 16% had reduced their number of hires
  • Despite evidence of staff changes in many charities, the net impact on staff numbers was not as dramatic as expected, with 73% reporting either an unchanged or increased headcount during 2012
  • Promisingly, the mood and morale of staff members was good, with only 3% reporting demoralised colleagues and 46% stating that their team appeared energised or optimistic. This is in stark contrast to last year’s survey, when the mood and morale of staff members was a concern

Part 3 - Looking ahead - The challenges and opportunities

The last section of the report looks into what charities anticipate 2014 will hold in store for them.

Respondents were asked ‘What do you feel have been the biggest challenges in the past year, and what challenges to do you anticipate?’. The results of the last survey suggested that, although reducing income was of course a major concern, the welfare of staff and staff morale was the largest single concern.

The results from last year were summarised into 6 broad categories, these were:

  • Uncertainty and a lack of understanding
  • Changes to operating models
  • Managing significant change
  • Fundraising in a difficult climate
  • Maintaining confidence and morale
  • Stemming increases in costs

Perhaps unsurprisingly, the same concerns were broadly reflected this year as well. However, from the 245 responses, a significant majority related to pressures on income. While this may seem obvious, it does suggest that the on-going pressures on income - year after year - have combined to help foster a very prominent concern around the impact of reductions in funding.

However, based on the results from last year, many charities have also been able to take account of these pressures and are reporting tangible responses, such as increased fundraising, more use of trading and enterprise, as well as collaboration and, in 20% of cases, either considering or actively pursuing a merger with a similar organisation.

Furthermore, staff morale was also considered to be much less of a concern when the survey results were compared against last year. Staff respondents were more optimistic about the future, and according to the report: ‘there is a real spirit emerging as we all become accustomed to the ‘new normal’, which should stand us in good stead for what lies ahead’.

Click here for a full version of the report.

Next section: Phi Database Update

Phi in Numbers November 2013

We have been increasingly asked to research European Trusts and Foundations for our UK based clients in recent years. This has made us wonder what Phi can tell us about which European trusts are actually donating to UK organisations. And which UK organisations have been successful at attracting funds from the other side of the Channel and the North Sea?

Phi would suggest that this is still very much a minority activity. Of the 465,905 donations listed on Phi as at 19th November 2013, we could only attribute 121 to a European foundation. Our own research, however, would suggest that there are European foundations out there with a willingness to fund outside their borders, so there may be untapped opportunities for brave fundraisers with an international outlook. The three largest identified European foundation donations listed on Phi were for a total of £675,137 – an average of £225,000.

The single most prolific European foundation donor on Phi is the Stavros Niarchos Foundation. Based in Greece and Monaco, the 36 listed donations by the foundation lead to those countries being the most common in terms of overall donation levels. Stavros Niarchos are most likely to have made donations to causes working in education (10 donations) and international development (8 donations). They have, however, also made donations to the arts, heritage, health, children, disability and welfare.

Donations from Germany are from a wider range of foundations including Friedrich-Ebert-Stiftung, Michael Otto Stiftung für Umweltschutz, Bernd und Eva Hockemeyer Stiftung and Ceramica-Stiftung Basel. The Netherlands are also relatively well represented with donations coming to the UK from Stichting Teuntje Anna, HIVOS and Stichting Kinderpostzegels Nederland amongst others.


Phi would suggest that UK charities in the Arts and Culture sector have been most successful at attracting donations from European foundations. A wide range of organisations are represented including the Tate, the Serpentine Gallery, the Wallace Collection, the Whitechapel Gallery, the Arnolfini in Bristol, the London Philharmonic Orchestra, the London Symphony Orchestra and the Royal Opera House Covent Garden.

International Development is the next most represented type of organisation. As international development organisations are less likely to publicise the names of their major supporters than arts organisations, this would suggest that this may well be a significant under representation of the amount of European donations coming into this sector. UK development organisations which acknowledge European foundation donations include Concern Universal, Water Aid, International Alert, Build Africa, Oxfam and Practical Action.

University development teams have been relatively successful at attracting European funds. This will clearly not include all the funding attracted to individual research projects which will be considerably higher in number (and size of grant) than those represented on Phi. We see European funding going to the Universities of Oxford, Cambridge, Bristol, Cardiff and St Andrews plus to Kings College London and to RADA.

A number of Heritage organisations have also attracted European funding. Success stories in this sector include support given to the National Museum of Science and Industry by the King Baudouin Foundation (Belgium) over a three year period.


Next section: News

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