The Lloyd’s Register Foundation arrived on the Charity Commission’s register two years ago like a super-tanker pulling into a port filled with ferries and sailing boats. Its income of £950m a year instantly made it made the largest charity in England and Wales, pushing the British Council into second place.
Since then it has gone on to become the first charity in England and Wales to have an income of more than £1bn a year. Yet, for all its size and wealth, little is known about the foundation.
On Friday, the charity convened a meeting of the press to help shed some light on its purpose and work to date.
The foundation, we were told, sits at the top of a group structure that includes the Lloyd’s Register, a for-profit company that inspects ships and oil rigs among other activities. The foundation might wholly own the company, but its income to spend on charitable activity is small by comparison. In the financial year 2014/15, the foundation received an income of £19.5m and spent £14.5m.
The foundation’s promotional literature says it aims to protect life and property and support education and engineering-related research. In practice, this means it supports quite a lot of geeky engineering and science projects. For example, the University of Aberdeen has received a grant to help develop a system to detect oil leakages from vandalism in pipelines and a further grant was awarded to help set up The Alan Turing Institute, which will undertake data science research.
Other beneficiaries include the lifeboat charity RNLI, which receives funding for its sea-survival training for lifeboat volunteers. Paul Boissier, chief executive of the RNLI, told the event that without such funding its lifeboat volunteers wouldn’t be able to successfully carry out their duties.
There was a lot of talk about the foundation wanting to make an impact, be that through bringing about safety improvements in the engineering sector or through its research projects. But when pressed on what impact the foundation’s £60m grant awards had made so far, managing director Professor Richard Clegg admitted that it was difficult to quantity. No overall analysis was under way to establish its impact and it largely relied on case studies of its beneficiaries to establish the impact of its work. Clegg said: "Case studies give us hard, practical real-world examples of where we did do something. That’s the best thing at the end of the day."
Perhaps it was not the answer expected of a major funder of research, but it was delivered with refreshing honesty by Clegg, who added that he saw little point asking grantees to provide lots of metrics when it was "not sure" what it wanted to do with them.
Questions were also raised about how the foundation ensured that it remained sufficiently independent of its commercial arm. The foundation, we were assured, had its own independent board that made the decisions about its charitable work. The commercial arm was viewed as "an investment", said Clegg, who added that the foundation steered clear of interfering in the executive decision-making of the company. Such a structure was unusual in the UK but common in other parts of Europe, particularly Scandinavia.
Over canapés and dips at the end, it was clear that some questions remained. For example, if this organisational structure is better than others – the event was called ‘the 21st-century model for social business’ – why aren’t more businesses following suit? And do the tax breaks that come with charitable status bring the foundation and its commercial arm potentially major financial savings? (The hospital and gym provider Nuffield Health estimated that charitable status helped it save up to £25m in taxes in 2012.)
I’m sure in the fullness of time such questions and more will be answered.