Phi Newsletter – August 2015

Welcome to the August 2015 issue of the Factary Phi Newsletter.

Major Giving News

Popstar to donate £2m

One Direction singer Louis Tomlinson has reportedly donated £2m to children’s charity Believe in Magic.

His bandmate Liam Payne also made a sizable donation to the charity after attended the event, where he paid £50,000 to get his face painted as part of the fundraising effort.

Louis was the host, and he added afterwards that he was ‘very excited and proud’ to support the work of the charity, which aims to support and entertain seriously ill youngsters.

Chancellor George Osborne promises £1m donation

Yorkshire Air Ambulance have been promised a £1m donation after a recent visit from George Osborne and England opening batsman Geoffrey Boycott.

The funding has been raised from fines levied on banks, and brings the total given to air ambulances across the country to over £10m in the past year. This is part of more than £500m raised in banking fines to have been pledged by the Chancellor in support military good causes and emergency service charities since 2012.

Speaking on their decision to award the money, George Osborne said: ‘it’s only right that funds from those who have demonstrated the worst values should go to those, like the dedicated and skilled air ambulance crews and their supporters who demonstrate the best of British values on a daily basis’.

Next section: Report

Report: Financial Sustainability Review 2015

This month, we have included our summary of the recent ‘Financial Sustainability Review’ of the voluntary sector, co-authored by Michael Birtwistle and Andrew O’Brien for the NCVO.


The review aims to consider how the sector has adapted to some of the wider economic changes that have taken place in the UK over the past few years, and also how these changes may have affected the charity sector in terms of its overall sustainability.

The research was conducted by surveying various organisations about their experiences and also through holding roundtables to identify some of the key trends since the recession. It is also worth remembering that this review has taken place over a period of economic recovery, and during some enormous reforms in terms of the size and shape of government spending, both in terms of the sector and in terms of UK public services.

Despite some evidence of real adaptation and resilience by the sector, the survey argues that these attempts have often been self-sacrificial, especially for small and medium sized organisations. The reason for this, it is argued, is because many of these organisations have eaten into their reserves, cut investments, and made other sacrifices all in an effort to maintain the level of support they provide on a day-to-day basis.

The long term sustainability of this approach is questionable, and this review seeks articulate the challenges the sector will be working through in the foreseeable future.

Key Findings


  • The research found that funding income amongst charities has stagnated over the last five years, and the sector’s spending power has also been significantly redistributed from smaller organisations to larger ones.
  • Smaller organisations in particular are not benefiting from the economic recovery, but are experiencing something of a ‘capacity crunch’ which has limited their ability to adapt or engage with any funding programmes that might improve their sustainability.
  • Income previously acquired from government contracts has fallen since 2009. Despite some positive developments in the form of the Social Value Act review, and ‘government contract transparency clause pilots’, there are still some significant barriers that are holding charities back from engaging with public service contracting.
  • Government grants are at an all-time low, with Foundations fulfilling the role as one of the only remaining providers of unrestricted funding.
  • While donations have finally recovered and are reaching pre-recession levels, a growth in income from individuals has been driven more by fees charged by charities for their services.
  • To rely on this as a future source of income may be unsustainable, the report argues, with a possibility of this undermining charity’s core aims in some areas.


  • Surveys have shown a consistent rise in the demand for the services of charities year on year, however details regarding this increase in demand is not routinely collected, let alone published across all parts of the sector. Charities need to improve both the measurement of this and their communication on the level of demand for their services.
  • The price of everyday goods and services that are commonly associated with the sector has significantly risen in price, the report notes, even above inflation. At the same time, support from local authorities and public bodies has reduced in the face of budget pressures, which in turn means that more has be spent on key services that would otherwise have been pro bono or at least offered at a discount.
  • Charities have responded to the increased pressures on their spending by also increasing the proportion of their spending on charitable activities. Foundations have also increased the amount of grant funding to other charities.
  • Staffing resources have been stretched in effort to pool resources, and cutbacks have also been made on office upgrades and training.


  • Voluntary sector assets have not yet recovered to their pre-recession value, and the overall recovery in asset value has not been uniformly distributed across the sector.
  • The use of reserves to cover operational costs has also left the sector in a somewhat fragile position. Without a significant improvement in terms of funding, the sector could potentially experience a delayed impact from the recession.
  • A fall in asset values during the recession has also contributed to a relative increase in pension liabilities, which in turn have not fully recovered during the most recent period of asset growth.


  • Presently, financial forecasts predict a £4.6b annual shortfall in overall sector income by 2018/19, simply in order to maintain its 2012/13 spending tower.
  • On the basis of current trends, the only significant and growing source of income (individuals) will not rise enough to make up for the deficit in income from the government.
  • The effect of inflation will reduce the sector’s spending power by £3.1b by 2018/19, which will feed into the squeeze on capacity.

Policy Implications

  • While some organisations are beginning to favour generating more income through simply charging for their services, the report argues that this approach is not suitable for all.
  • Charities should ensure that their efforts to generate income do not undermine their ability to achieve their main charitable objectives, overall.
  • Around £1.7b in government funding has been lost in 2009/10. Organisations therefore need to ensure that they are in a position to win government grants and contracts, and demonstrate their impact.
  • In the face of increasing demand for their services, charities need take additional steps to not only measure this level of demand accurately, but to get a better idea of exactly how much of their resources will be required. They will also need to think carefully in terms of balancing said resources in order to meet the short term demand, and to also balance this in order to ensure their long term sustainability.
  • Success stories regarding organisations that have adapted, or become more sustainable should be more widely publicised. However at the same time, the limits of possibly adopting a ‘one size fits all’ model should be recognised.
  • According to the report, an estimated £3b in efficiency savings will need to be made in order to maintain current spending power. To achieve this, voluntary organisations need to begin working now to identify exactly which areas these savings can be made.
  • With the reduction in funding from the government, charitable foundations now account for an increasingly important part of the sectors overall income. For this reason, foundations may need to reconsider their role as important funders of the sector. A more co-ordinated or entirely different approach to funding may be required to compensate for the loss of government income, for example in terms of capacity building.


  • In spite of efforts to ensure that the government plays a bigger role in public service delivery, its income provided to the voluntary sector has fallen. This report calls on such organisations to play a bigger role in public services delivery.
  • Although voluntary organisations are trying to adapt and replace the government income that they have lost, in many causes the reductions in funding are taking place faster than the sector can develop new revenue streams. For this reason, the government should reconsider the scale, pace and targeting or current spending reductions in order to ensure the sector is able to meet demand.
  • The government should ensure that the devolution of more power and spending decisions to the local level does not undermine the government’s ability to develop a coherent strategy for supporting the voluntary sector.
  • While voluntary organisations are working to generate more of their own resources, the government should also consider how tax reliefs such as business rates and gift aid can be better implemented to maximise charitable income.
  • In order to ensure that partnerships continue to be relevant and effective, the government should make an effort to renew and strengthen its commitment to strategic frameworks (such as the Compact).
  • Large charities and foundations have benefited the most from recovering asset values, disproportionately so (the report argues) compared with smaller organisations who have not yet seen a significant improvement. The government and voluntary sector need to work together to ensure that small voluntary organisations are ‘recapitalised’ so they are able to grow sustainably in the future.

Clickhere for a full version of the report.

Next section: Phi Database Update

Phi in Numbers: August 2015

As it stands, the database currently holds 582,077 records of donations with a combined value in excess of £32.2 billion. For this month’s edition of our database update, we have decided to survey and compare donations made by various titled individuals throughout the database.

For the purposes of the survey, the titled donors we have featured include Barons and Baronesses, Lords and Ladies, Earls & Countesses, Dukes and Duchesses, Dames, Sirs, The Honourable & Right Hon and Viscounts.

Below, we have included a pie chart displaying the spread of titled donations to various activity types throughout the database.


As is evidenced by the graph, the largest proportion of titled donations have been made into the Arts/Culture activity type overall, followed closely by Education, with donations to these two groups making up over half of all titled donations throughout the database.

We have also included a second graph, which contains a more detailed breakdown of each activity split according to donor title.


As the graph shows, the largest proportion of donations across almost all activity types have come from donors titled ‘Sir’ and from ‘Lords & Ladies’. The only exception to this being the Mental Health activity type, wherein donations from Barons & Baronesses feature more prominently.

It should be noted that our findings are based on the data as it appears in Phi, and it is therefore not necessarily representative of the wider giving sector as a whole.

Next section: Profile

Profile: The Beit Trust

Founded in 1906, this trust is formed from the will of Alfred Beit, a British-South African financier and a director of the British South Africa Company. Born in Hamburg in 1853, he began his career at Amsterdam diamond firm Jules Porgès and Cie, where he developed a talent for examining stones that would serve him well in later life.

He spent several years learning his trade with the firm, and it was not until 1875 that he was sent to Kimberly, South Africa to buy diamonds for the company, and it was also here that Alfred met and befriended future business partner Cecil Rhodes, who went on to co-launch De Beers Consolidated Mines in 1888.

Together the pair proceeded to buy out digging ventures in order to eliminate their competition, and as a result, Alfred came to be regarded as an influential financier in the country, where he held control over a number of diamond-mining claims in the Central, Dutoitspan, and the De Beers mines.

While he was mainly concerned with the Kimberley Central Company, Albert would later extend his interests to the newly discovered goldfields of the Witwatersrand, where he also had great success.

It was two years later in 1888 that he founded the British South Africa Company, and during this period, he also decided to move to London where he felt he would be better able to manage his financial empire.

His considerable business interests aside, Alfred also made a number of charitable donations towards scientific research and education in Britain and overseas. He founded a chair of colonial history at the University of Oxford, and he also made a notable donation of two million German mark towards what would eventually become the University of Hamburg.

His trust, which was first named the ‘Beit Railway Fund’, was originally formed in order to promote the development of communications and the infrastructure of Rhodesia. However, the terms of his will stipulated that its income could also be applied to “education, public or other charitable purposes in Northern and Southern Rhodesia” which has enabled the Beit Trust to exist in its present day form.

Alfred was never married, and had no children. He died near Tewin, Hertfordshire in 1906 at the age of 53.

For the financial year ending the 31st December 2014, the trust reported an income of £2,666,961 and an expenditure of £2,479,134 Factary Phi holds 400 records of donations made to various organisations since 2006 worth a minimum of £6,835,269

According to Phi, the largest proportion of these donations have been made to causes associated with Education/Training (155), followed by Health (109), Welfare (10), International Development (50), Children/Youth (17), Religious Activities (12), Animals (10), Elderly and the Environment (9), Disability (8), Employment (7), General Charitable Purposes and Heritage (3), Arts/Culture (2) and Sport (1).

The Trustees

Mr Jonty Driver

Jonty Driver is South African apartheid activist, former political prisoner, educationist, poet and writer. After leaving South Africa he attended Trinity College, Oxford and subsequently he spent some time as a teacher in the UK. He was a research Fellow at the University of York, a headmaster of Island School in Hong Kong, Headmaster of Berkhamsted School and the Master of Wellington College. He is an honorary senior lecturer at the School of Literature and Creative Writing, University of East Anglia, and he was also a Bogliasco Fellow, a Fellow at Macdowell Colony and a Fellow at the Hawthornden Writers’ Retreat. He is a Trustee of the Frewen Educational Trust.

Sir Alan Munro

Alan Munro is a former diplomat, author and UK Ambassador to Saudi Arabia. During his career he worked for the Ministry of Defense, he was Under-Secretary of State for the Middle East and Africa and he was the British ambassador in Saudi Arabia from 1989 to 1993. He is vice-Chairman of the Arab British Chamber of Commerce, a former governor of Imperial College in London, a former Chairman of the Saudi British Society and he was also vice-Chairman of the British Red Cross Society. He read history at the University of Cambridge and he is a Trustee of the Munro Charitable Trust.

Mr Roy Lander

Roy Lander is a retired former Chairman and Chief Executive Officer of Anglo American corporation Zimbabwe Ltd. He is also a former Chairman of a number of mining companies in Zimbabwe involved in coal, ferro chrome, nickel and gold.

Professor Chris Lavy

Chris Lavy is a commissioner for The Lancet Commission on Global Surgery, the visiting professor 2014 at The Hospital for Sick Children, Toronto, and he is a Co-Director of the COSECSA Oxford Orthopaedic Link. He originally qualified at St Bartholomew’s Medical College in 1982 after gaining a BSC in Anthropology at University College London. He also trained in orthopaedic surgery on the Royal National Orthopaedic Hospital rotation and in 1992, he became a Consultant in orthopaedic and hand surgery at The Middlesex Hospital and University College Hospital in London.

Sir Kieran Prendergast

Kieran Prendergast is a retired British diplomat and a former Under-Secretary-General for Political Affairs at the United Nations. He is a Trustee of the Anglo-Turkish Society.

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