Grant making trusts

Fact sheet one

Background and main sources of information

There are around 20,000 grant making trusts in Britain (most of them in England) often set up by a wealthy individual, either as a bequest with the balance of an estate, or as a capital endowment during her/his lifetime. Some trusts (like the Princess of Wales Memorial Trust) have been funded by public donations.

Trusts normally have a capital fund, which is invested to produce an income, and it is this investment income from which grants are made. Most wealthy benefactors see the tax advantages of charitable status and register their trusts with the Charity Commission and it is with these registered grant-making trusts whose details appear on the Charity Commission's database, that we are concerned.

How trusts operate

A trust is run by a group of people known as trustees whose job it is to manage the money invested, usually in stocks, shares or property, to produce income; and to make grants to charities or to support the charitable work of other voluntary organisations. Usually grants are made in response to applications and appeals received, but in some cases trustees like to be pro-active and neither seek nor welcome appeals for grants. But giving is always in accordance with the charitable objects laid down in the original trust deed of the charity, and the principal duty of a trustee is to ensure that this is so.

The larger trusts usually employ one or more people to handle the day-to-day work of the trust. These people (who might be called director, secretary, correspondent, or administrator) deal directly with the applications and often (but not always) make recommendations for the trustees to consider and decide on at their trustees' meetings. These meetings are regular, but need not be frequent. Generally speaking, it is only the larger trusts, which meet once a month - or even once a quarter. Most trustees meet perhaps once or twice a year. The timing of applications should fit into the schedule of trustees' meetings, so it is important to find out how often - and when - they meet.

Who has the most influence? - The trust secretary or the trustees? - depends on the trust. In some trusts the decisions are made entirely by the trustees; in others they effectively rubber-stamp the recommendations of the trust secretary or correspondent. The day-to-day work of managing the investments is usually undertaken by a stockbroker, bank or firm of accountants (one of whom may also be the correspondent or secretary).

As already indicated, the trustees are not always free to make any grant they want - a number of criteria will affect them:

a) The trust's objects

The objects of a trust, laid down in the trust deed, may be very specific - grants may only be made (say) to promote missionary work overseas; to provide for the welfare of animals or for the advancement of education or religion. Even where the trust deed states that its objects are general charitable purposes or made at trustees' absolute discretion, the trust may, in practice, give only to one specific project.

b) The trust's policies

Within the trust's permitted objects the trustees may make their own policies of what they will and will not support. So although the trust's objects may be to provide for the welfare of animals, in practice its policy may be to direct its income solely towards projects benefiting horses and donkeys. Some trustees may have no consistent policy and will simply assess each application on its merits; some trustees produce written statements of policy and guidelines for applicants; and some simply refuse to comment on the criteria by which they judge applications.

c) The beneficial area

There may be a geographical area to which the trustees have to restrict their donations. There may be no stated beneficial area, or the beneficial area may be given as the whole of the UK, but in practice the trustees may prefer to give to small projects in their own town or county.

d) Status of the applicant

Many trusts will only give to registered charities or recognisable not-for-profit organisations. Some trusts will not give to individuals, or to local branches of national organisations.

e) Attitudes of trustees

It is helpful in understanding the process of decision-making within a trust to understand the essentially conservative nature of most public charitable work in this country and is the chief reason why a few high-profile good causes seem to get the lion's share of the money.

Luckily, some trusts are radical, pioneering and innovative and will be interested in a broad range of less popular causes. Many large or well-established charitable trusts take their responsibilities very seriously and understand that they have a duty to contribute to the improvement of society, the relief of deprivation and the promotion of cultural objectives.

It may be seen from the above remarks that trusts vary enormously in their attitudes and policies. It is therefore vital that before you make an application for funds, you undertake some basic research. It really is true that good preparation will save you time, and more importantly; increase your chances of success.

Research sources

The primary source of information about grant making trusts is The Charity Commission (see Fact Sheet Two)

The Charity Commission
St Albans House
57-60 Haymarket
London
SW17 4QX
020 7210 4405

The database operated by the Charity Commission contains details of all the registered charities in England and Wales, including all the grant making trusts. There are public terminals in London, Liverpool and Taunton.

The main sources of published information about trusts include:

The Directory of Social Change
24 Stephenson Way
London
NW1 2DP
020 7209 5151

Publishes a range of well-researched books on grant making trusts including a series of regional guides, A Guide to the Major Trusts Volumes l & ll, and a magazine called Trust Monitor which appears three times a year.

Charities Aid Foundation
Kings Hill
West Malling
Kent ME19 4TA
01732 520000

Publishes the fundraiser's 'bible' - The Directory of Grant Making Trusts - which contains details on around 3000 trusts.

Funding Digest
4 The Terrace
Ovingham
Northumberland
NE42 6AJ
01661 832296

Funding Digest appears every two months; it's possible to obtain for free - contact your local authority or country librarian to see if they subscribe. Or contact Funding Digest direct to see if any there are any multi-use subscriptions in your area. Funding Digest is informative and clearly laid out, with lots of up-to-date information: it's particularly strong on corporate involvement and news on European funding.

Sunrise Publishers
Freepost SWB 40380
Bodmin PL30 5ZZ
01208832272
Fax: 01208 832273
E-MAIL: marc@sunrisepublications.com
Website: www.sunrisepublications.com

Publishers of news digests and trust reports with the accent on multi-millionaires. Their flagship magazine is a monthly subscription digest called Wealth Watch. They also publish well-researched and detailed yearly reports on trusts, which contains details of trustees.

Caritas Data
Kemp House
152-160 City Road
London
EC1V 2NP
020 7250 1777

Publishes Top 3000 Charities - grant-seeking as well as grant-making. It was probably better researched when it contained details on the top 2000.

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