Brexit and the role of foundations: first thoughts
Brexit and the role of foundations: first thoughts
This article was first published by the Association of Charitable Foundations on www.acf.org.uk/.
There will be no shortage of comment about the implications of last week’s referendum, for UK civil society and beyond. Necessarily, much will be speculative, but there remains a need to make an initial assessment of the implications in order to support thinking and planning for foundations and the sector more widely.
Beginning with what we can know with some degree of confidence: the economy is likely to enter a period of volatility and uncertainty. Foundations funding abroad have already felt the impact of this, seeing their relative buying-power change as the value of the pound fluctuates. Over the medium and longer terms, those that rely on their investments may face an erosion of their asset-base and a possible reduction in income.
With a history stretching back over a thousand years, it is no surprise that foundations have precedents to draw from. Following 2008, our research showed that many foundations, as long-term investors, were able to weather turbulence and even maintain spending rates for some time in the support of their beneficiaries. The lesson from recent years is that foundations need well thought through policies and strong governance in relation to issues such as asset allocation and spending-rates.
Others in society are less well-placed. As always, those most in need are likely to be hit the hardest by economic shocks, leaving foundations to consider how best to respond in a climate of ‘triple jeopardy’ - diminished governmental support, increased grantee need and potentially reduced foundation resources.
In this situation, can foundations leverage their unique position in order to ‘gift’ some of their advantages - their independence, their relative resilience, their social networks - to the communities and organisations that they fund? We can offer money to support action of course, but can we also help organisations buy time and space to reflect in order to change the way they work or redesign services to areas where need is greatest?
With hindsight, whatever the outcome of the referendum, it was always going to reveal dividing-lines across our society. We are now able to observe stark intergenerational and geographic differences, disparities in income and education as well as attitudes to immigration. With questions also arising about the stability of the United Kingdom, and the continued existence of substantial EU funding streams, it is clear that working together with the rest of society to promote inclusion needs to be high on our collective agenda.
For foundations, I would suggest this context asks us to apply a sharpened lens through which we view our decision-making processes. When making a particular grant, programme or social investment, how aware are we of its potential inadvertently to encourage division? Have we missed an opportunity to foster cross-cultural, geographic or generational exchange? Have we now a greater responsibility to consider how our support can help empower communities, build democratic engagement, or forge meaningful links between the private, public and voluntary sectors? Are we being attentive to the ongoing leadership and capacity needs of marginal groups, be they women, LGBTQI, BME communities, or the white working class?
Experience has taught me that in difficult times foundations respond creatively to challenge and engage seriously with the needs of their beneficiaries, willing to be self-reflective and ask themselves the difficult questions when necessary. I don’t doubt that you will do so again in what promise to be turbulent times ahead.
As for ACF, we remain a UK-wide organisation, working in Northern Ireland, Scotland and Wales. We are an associate member of European and global networks such as EFC, DAFNE and WINGS, as well as being strongly networked with other umbrella bodies throughout the sector.
In the immediate term, we will be working with national sector bodies to bring foundations and communities together to work through the implications of the referendum result, and will host conversations with members throughout this period of uncertainty and possible opportunity. We invite foundations to share with us your thoughts and reflections on how funders might best continue to play a role in working towards a proudly pluralistic, creative, tolerant and thriving civil society.
The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Registered Office at 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored.