‘Financial crisis: responding to the new normal’ was the title of the opening plenary of the UK’s Association of Charitable Foundations’ 2012 conference, held in London on 7 November. Responding to the financial crisis has been centre stage for ACF for the last few years. In 2010, the opening plenary focused on ‘Orientation for foundations in a time of change’ – ‘a time of change’ comprising ongoing recession and expected massive cuts in public spending. The 2011 opening plenary was called ‘View from the bridge’ and the view was similarly challenging.
The big change in 2012 was that ACF chief executive David Emerson acknowledged that the economic situation ‘no longer looks like a crisis blip but a new normal’, where endowed foundations can expect continuing low investment returns and increasing demand from hard-pressed charities struggling to meet high levels of social need.
Few could argue with Emerson’s conclusion that ‘the combination of need and austerity makes it difficult for any of us to succeed in our missions with our previous approaches’. Or with his suggestion that foundations ‘need to make their whole balance sheet work for the mission’. The challenge is to find new approaches.
Social investment surely has to be part of the answer – despite one panellist’s dismissal of it as ‘depressingly irrelevant’ to struggling small charities with no means to repay a loan. Sara Llewellin of Barrow Cadbury Trust described the work of Bristol Together, launched in October 2011 with the aim of creating full-time jobs for ex-offenders through the repair and refurbishment of empty properties. This example shows that while social investment can’t necessarily plug the gaps left by public spending cuts, it can do different things. Another way of doing more with resources was put forward by Catherine Howarth of FairPensions, suggesting that foundations can secure the maximum positive value from their investments by being active, engaged and responsible shareholders.
Summing up at the end of the day, European Foundation Centre chief executive Gerry Salole reminded his audience that foundations always have to make choices with scarce resources – it’s just that today the choices are harder. Levi Strauss talked of differences in the ways people solve problems between engineers and bricoleurs, who put something together using whatever materials are at hand. Foundations should be the bricoleurs, said Salole.
Caroline Hartnell is editor of Alliance magazine.
For more information
Event: Association of Charitable Foundations conference
Date: 7 November 2012
Location: London, UK
Organizer: Association of Charitable Foundations