Nick Acland: After 388 years, it was time for a formal strategy

The director of the Henry Smith Charity tells Andy Hillier how the grant-maker is changing and becoming more strategic in its approach

Nick Acland
Nick Acland

It is almost 400 years since the grant-making foundation The Henry Smith Charity was established using the assets bequeathed by its eponymous founder, a wealthy landowner of the 1700s.

Since then it has become one of the most significant funders in the voluntary sector, amassing an endowment of £950m and awarding about £28m a year in grants, mainly to smaller charities.

The charity’s fundamental aim now, as it was on the death of Henry Smith in 1628, remains to alleviate poverty.

But 18 months ago the charity took the decision that it wanted to become more strategic in its approach to giving. To that end, it has just launched a new Main Grants Strategy that sets out its priorities for the next five years or so.

Nick Acland, director of HSC, says he hopes the strategy will bring more rigour to its grant-making. "I don’t think we’ve ever formally had a strategy," he says. "This is the first one in 388 years. That’s not to say we haven’t had a focus or clear identity with what we’re doing, but actually sitting down with the trustees and formally articulating what we’re about has been a helpful process.

"What has come out is a desire to focus UK-wide on the most vulnerable in society, those who have fallen through the net. Our focus is to do that mainly through funding small organisations."

Under the new strategy, the charity will distribute between £26m and £30m a year, approximately 4 per cent of its endowment. The money will be distributed through two main grant programmes: Improving Lives and Strengthening Communities. Improving Lives will support charitable organisations, usually with incomes of up to £2m a year, that help people in the greatest need. Six priority areas have been identified (see below).

Strengthening Communities will provide grants to smaller organisations, with incomes of up to £500,000 a year, working in the most disadvantaged communities in the UK.

Grants will range from £20,000 a year up to £60,000 a year and will last for a maximum of three years. 

"Our ethos will be very much about helping and supporting people, rather than doing things to them," says Acland.

To inform the new strategy, the charity analysed its grants over the past three years, looking at why it turned down applications and the areas where it believed it had had the biggest impact.

"We wanted to be clearer and more transparent so people know what we’re looking for and we can make a judgement on the information they provide us," says Acland. "There’s something wrong if an application arrives and someone thinks it’s a good fit but it’s never going to get a grant. That’s a waste of our time; more importantly, it’s a waste of the applicant's time."

At present, about one in five applications to HSC is successful, but Acland says he’d like this figure to be nearer one in two and a half.

Some cause areas have fallen by the wayside in the shake-up. Early on in the strategy review, the trustees took the decision to stop funding medical research and organisations working with ex-service personal because, says Acland, they felt there was a lot of support and money already out there. It has also stopped funding therapeutic healthcare and capital projects such as the building or refurbishment of hospices and community spaces.

"After that it became quite difficult to say what else we wanted to narrow down on," says Acland. "It’s such a difficult judgement when you’re assessing the difference between a project to do with loneliness among older people and another that helps ex-offenders into employment.

"Different people have different views, so we discussed with staff and trustees the values of Smith as organisation. We decided the priority areas where we wanted to help people."

ALSO READ Henry Smith Charity's grants strategy for 2017

Impact will have more prominence under the new strategy. Acland concedes that HSC has not been very good at measuring the difference it has made, saying it’s a hard thing for a funder of its size to do in a meaningful way. "You could say we’re reaching this number of people, but that tells you nothing," he says. "We don’t want to pay lip service to things."

Part of the solution to measuring its impact could lie in grouping different types of intervention together, he says, then seeing what is being achieved. "But that’s a little bit down the line," Acland concedes.

The Strengthening Communities programme’s focus on supporting small organisations working in deprived areas throws up something of dilemma for HSC. Lots of smaller organisations have gone to the wall over the past decade, largely as a result of cuts to state funding. So how will HSC ensure that the money reaches those most in need, especially in areas where the voluntary sector has been scaled back and organisations might not have the time or skills to apply for grants?

"I think it’s in our DNA that we like to be low profile. I think that will change a bit, but we are not a campaigning organisation."

Nick Acland, Henry Smith Charity

Acland says HSC remains a "demand-led funder" that relies on charities applying for money. But he says it will monitor applications closely to ensure they’re coming from its target areas. "As soon as we start getting information on that, we’ll start asking if this is doing what we want it to and if our deprivation threshold if correctly set," he says. "We’ll also ask if there is something we should be doing proactively, either ourselves or through other organisations, to connect with the hardest-to-reach communities."

There have been calls in recent years for funders to simplify their application processes and even to consider creating a common application form that would help to reduce the administrative burden on charities. Acland says the application process has been given careful consideration, but a common application form was ruled out because different funders have different priorities.

"Under my tenure, we’ve become more demanding on the up-front application process and as light-touch as we can on the progress reporting," he says. "There’s a tension between getting enough information to make a sensible decision and being overly burdensome on organisations with scarce resources."

For the Strengthening Communities programme, he says, it has tried to make the application form "lighter-touch and as unjargony as possible".

An accusation has been levelled at trusts and foundations that they’re not joined-up in their thinking and that certain parts of the country, particularly London, receive the lion’s share of grants, to the detriment of other areas. So will HSC be working more closely with other funders under the new strategy?

Acland says it has worked with other funders in the past, but joint working is not a priority. "What people tend to forget is that every pound we spend internally is a pound we don’t give away as a grant," he says. "Collaboration and working with other funders is very time-consuming and resource-intensive. I’m cautious to say that we’re going to rush out and do lots of work with other funders."

And will HSC be willing to speak out more publicly on issues of concern for the charities it supports and their beneficiaries? Paul Streets, the chief executive of the Lloyds Bank Foundation, for example, has set something of a precedent for other trusts and foundations by taking a forthright stance on the impact of cuts on smaller organisations.

"I think it’s in our DNA that we like to be low profile," says Acland. "I think that will change a bit, but we are not a campaigning organisation."

However, he says it would consider speaking out on issues where a large number of small charities perceive there to be a problem, such as how Personal Independence Payment disability assessments are conducted.

"They are bizarre and Kafka-esque," he says. "One organisation we visited recently told us that one of the assessment companies has a target turn-down rate of 80 per cent, then there’s a 95 per cent success rate on appeal. To have a targeted turn-down rate of 80 per cent just seems to me a cynical exploitation of the system and puts people in terrible positions."

ALSO READ Henry Smith Charity's grants strategy for 2017

Last year, the grant-maker’s endowment made a dream 16 per cent return, increasing the endowment by £112m to £950m. Despite the stellar return, the trustees have committed to paying out 4 per cent of the assets each year.

There has been debate in the philanthropic sector about whether foundations should be spending more and if the UK should follow the US model, which requires them to make a minimum payout of 5 per cent of their assets each year. Acland believes it would be unwise for HSC to distribute more.

"We’re a very long-term organisation," he says. "The question we ask is whether 4 per cent is sustainable. In 2008, we saw the endowment fall from £800m to £550m. There was real stress in that period, but we held our 4 per cent. Four per cent is a tough target."

For now, the target is to make sure the money it distributes reaches those most in need and has the biggest impact.

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