Trusts and foundations will maintain grants, Charity Commission survey finds

Firm Foundations report shows most will not cut back, despite falling income

Britain's trusts and foundations are maintaining current levels of grant-giving even if it means spending their endowments, according to a report published by the Charity Commission today.

The commission surveyed 16 of the country's largest trusts and foundations and three smaller ones for the Firm Foundations report.

Three of them said they had seen their income fall by more than 30 per cent, 10 had seen a decline of less than 10 per cent, and only four had seen an increase in income.

Despite the widespread falls in income, only two trusts said they would decrease grant-giving in 2009, and three said they would increase it. Fourteen said it would remain the same.

Many intended to maintain funding by digging into their endowments.

One charity said the groups it supported "would get hammered" if cuts were made. Another said it would spend its endowment to "maintain trust and faith with grantees".

Many grant-makers said underspending income from the pre-recession years had enabled them to spend more now.

"A view was expressed that returns on investment had been ‘over-inflated' in the years leading up to the downturn," the report says. "Some trusts and foundations say they are now beginning to spend from this pot of income and gains accrued from the years of investment growth."

David Emerson, chief executive of the Association of Charitable Foundations, said the commission's findings were in line with research carried out by his own organisation.

"The outlook for grant-making is thus far reasonably optimistic," he said. "These trusts and foundations have continued to take a calm, measured approach in managing their endowments.

"They have planned ahead to ensure not only that their charitable assets remain secure, but that they will continue to provide an income stream for many operating charities and their beneficiaries at a time when the need for such work is greater than ever."

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