'Spend out' trusts can meet goals more effectively, says charity

Tubney Charitable Trust chair Rene Olivieri reports on its experience

Rene Olivieri
Rene Olivieri

Charitable trusts that aim to spend all of their investment can more effectively meet their long-term goals than those that have a "slow and possibly uninspired perpetual outward flow of funds", according to a new report.

The Tubney Charitable Trust, which will close in March having spent funds totalling £65m, has published a report about its decision to disburse all its money.

The trust was set up in 1997 by Miles and Briony Blackwell, who both died unexpectedly in 2001. The charity’s report, Giving our all: reflections of a spend out charity, says the trust’s founders felt the trust "should not be a bid for personal immortality" and that it should have a finite life.

Because of this wish, trustees set themselves a deadline of 10 years after the founders’ deaths to end their grant-making.

The publication says that although the idea of spending out was traumatic at first, in the end the process was liberating.

René Olivieri, chair of the trust, says in the report: "There is no question in our minds that ‘spend out’ focuses the collective mind and resources of a trust in an extraordinary way and can do more to achieve a trust’s long-term goals than a slow, modest, and possibly uninspired, perpetual outward flow of funds."

The report says that all charities should continually review whether they are meeting their objectives and therefore whether there is still a need for them to exist.

"It is perhaps incumbent on each charity to justify its continuing existence on an ongoing basis," it says. "Every charity’s board of trustees should periodically ask itself whether the charity is truly necessary – ie, whether it could achieve more by merging or combining its resources and expertise with another charity or charities."

David Emerson, chief executive of the Association of Charitable Foundations, said that spending out could help foundations to focus better on their objectives, but that it was not appropriate in all cases. He said that relatively few foundations were thinking about spending out, but it was something that had recently started to be discussed more.

Cathy Pharoah, professor of charity funding at Cass Business School, agreed that, anecdotally, spending out seemed to be becoming slightly more popular.

"But we need to have a diversity upon which foundations operate," she said. "The charity sector today is benefiting enormously from endowments laid down in the past."

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