05 December 2007
Community Foundation Network (CFN) – the UK’s largest charity supporting local community groups – has today released research which shows that endowments, pledges and legacies held by its 56 member organisations have passed £200 million, more than double the figure less than four years ago.
Projections suggest this figure will more than double again to close to £500 million in the next 3-5 years, if, as expected, community foundations are asked by the Office of the Third Sector to deliver the recently announced endowment challenge programme. This would mean that interest payments on endowments alone could be generating over £25 million for local community projects every year by 2010.
The increase in endowments - representing 13% growth over the past year - is one of the reasons community foundations were able to make around 17,000 grants to local community groups and projects last year, totalling nearly £75 million. This represents a £5 million increase on the previous year, which was itself a record for the network.
A major part of the growth in new endowments (two thirds) is accounted for by donations by the private sector, mostly individuals and families. This suggests a significant appetite for people wanting to ‘give something back’ to their local communities.
Programmes designed to combat disadvantage have received nearly £11 million in grant support from non-government community foundation income, while community development programmes, including crime prevention, are the next most popular for non-government donations, with grants for such causes in excess of £7.6 million. Environmental schemes, including those concerned with animals – traditionally thought to be amongst the most popular – in fact have received less than £1million.
Despite the upbeat projections for endowment growth, however, community foundations are predicting an overall fall in grant making over the next two years of up to £30 million, largely as a result of the withdrawal of the DCSF-backed Local Network Fund. While endowment challenge funds might bridge some of this gap, CFN Chief Executive, Stephen Hammersley, remains concerned that this could lead to a significant reduction in the number of community projects available for private sector backing, as well as reducing the scope of community foundations to match fund donations from individual philanthropists with government monies.
He says:
“Community Foundation Network has continued to deliver strong growth over the past year, despite more difficult economic conditions. In the long term, the growth in endowments, pledges and legacies will stand us in good stead. However, while philanthropy has attributes that cannot be provided through public funding – such as an ability to respond quickly and flexibly to specific local needs and opportunities – the private sector cannot be expected to suddenly take up the slack when government funds are withdrawn.
“The principle that underpins our work and is key to attracting philanthropists is that donations are in addition to, or leverage government funding, rather than replace it. Our backers want to reach the parts government cannot reach and to achieve more than the government can,” Hammersley concluded, “not just make up their shortfalls.”