The Esmée Fairbairn Foundation increased its spending on grants and social investment by 5.9 per cent in 2012, according to its annual report.
It shows that the foundation spent £37.6m on grants and social investment in 2012, compared with £35.5m in 2011, excluding £5m spent on gifts to 15 organisations to mark its 50th anniversary.
Grants from its main fund totalled £30.5m, including £14.5m spent on social change, £2.8m on the environment, £5.3m on education and learning, and £7.9m on the arts.
The grant-maker received 2,655 applications to its main fund in 2012 and, from those, approved 339 grants. The average main fund grant was £89,844.
A total of £6.8m was invested in 13 projects through the foundation’s Finance Fund, which makes loans and other investments to charities and social enterprises.
In her final chief executive’s report for the foundation, she says: "We face the challenge of reduced financial returns at the very time when there are greater levels of sustained and ongoing need in the UK. This is an issue that all long-term foundations are confronting in terms of balancing the needs of current and future generations with regard to how much we spend on grant-making."
The foundation has been trying to back organisations that have knowledge and experience of current problems and the ideas and capacity to create improvements in the long term, she says.
At the end of 2012, the foundation was worth £806.5m, up from £804.5m in 2011. The portfolio’s annual total return of 4.9 per cent fell below the foundation’s long-term investment target of 7.2 per cent.
The financial review in the report says that lessons learned from the 2008 financial crisis led to a restructure of the foundation’s investment portfolio in 2010.
"Our performance over the past three years, including 2012, has, however, remained somewhat disappointing, with the main detraction coming from our property allocation," it says.
"The market outlook for the next few years continues to be uncertain, but we remain committed to our premise that growth will be driven from our exposures to equities, particularly private and emerging market equities, and that this emphasis will strengthen the portfolio’s ability to meet its long-term investment goals."