Paul Hamlyn Foundation — Written evidence (CHA0059)
 

About the Paul Hamlyn Foundation

  1. The Paul Hamlyn Foundation (‘PHF’) is one of the largest independent grant-making foundations in the UK. Our mission is to help people overcome disadvantage and lack of opportunity, so that they can realise their potential and enjoy fulfilling and creative lives. To deliver this mission we make grants to a diverse range of organisations and individuals. We have a particular interest in supporting young people and a strong belief in the importance of the arts.

 

Evidence and observations

  1. Below are observations relating to research and activities, which may be relevant to the Committee’s inquiry, including a synthesis of an earlier consultation we conducted as part of our own strategic review. These observations primarily address issues pertinent to questions 1 - 3 (the purpose of charities, the pressures and opportunities they face and their capacity for innovation).

 

  1. As part of a consortium of charitable funders PHF has supported an independent inquiry into the future of civil society, which is due to report on its first phase in January 2018. To date £500,000 has been committed by a range of funders including the Baring Foundation, Barrow Cadbury Trust, Lankelly Chase, Calouste Gulbenkian UK, Esmée Fairbairn Foundation, Lloyds Bank Foundation and PHF. Julia Unwin CBE, will chair the Inquiry, bringing a wealth of experience to the role including her nearly 10 years as Chief Executive of the Joseph Rowntree Foundation. 

 

  1. This independent inquiry aims to provide a clear vision for the role of civil society in England over the next decade and address the changing nature of civil society in the current environment and its prospects going forward. The findings of this independent inquiry will be relevant to the Committee’s interest in the purpose and role of charities, the changing context in which they work, and the challenges they face. Further details can be found on the baring foundation website at http://baringfoundation.org.uk/inquiry-into-the-future-of-civil-society-invitation-to-tender-to-provide-the-secretariat/.

 

  1. As part of PHF’s 2013/14 strategy review we put out an open call for input from individuals and organisations working in the fields in which we are active. The full report on the consultation exercise is provided at attachment 1[held by Committee staff and available on request]. Some relevant responses are, in summary:
    1. The need for more effective support for leaders in the charities sector. A consistent theme was the suggestion to invest in leadership and back individuals. Suggestions included giving grants to existing sector leaders to allow them to further develop their organisations’ work (unencumbered by specific project or outcome-based funding) and to develop new funding programmes which identify, nurture and support young or less well-established artists, creative producers/thinkers and future sector leaders. Several saw this as a highly strategic use of funding.
    2. Innovation and organisation and sector sustainability were two recurrent and closely connected themes in responses. Some strong and divergent views were expressed. Many respondents recognised and valued funder focus on innovation, with some proposing an even stronger focus on supporting novel, experimental or risky work; however, several others emphasised the importance of prioritising organisational and sector sustainability, either in addition to or in preference to innovation. Current financial and policy climates, as well as willingness to fund organisational core costs were frequently mentioned in responses containing these latter views. Some respondents took a strong line on funders emphasising innovation too much, arguing that it can be to the detriment of ‘particularly’ smaller organisations, for whom constant pressure to devise new ideas, plan and fundraise for them presented a drain on resources and detracted from their core mission.
    3. Our own consultation, as well as other research supported by our peers, highlights the specific challenges facing small and medium sized charities. The Committee may also wish to note the findings of two independent research projects commissioned by the Lloyds Bank Foundation, which detail the challenges facing small and medium sized charities in England and Wales since 2008. The Lloyds Bank Foundation’s briefing on this research is provided at attachment 2[held by Committee staff and available on request]. The research found that smaller charities lost a higher proportion of their income than larger organisations following the recession, have more volatile finances and are disproportionately affected by the shift towards competitive commissioning. These same organisations, however, make a unique contribution given their ability to be more responsive and flexible to address changing need as well as the increased likelihood that they will be embedded in - and connected to - their community. 

 

  1. We believe that providing core funding for organisations ­— rather than necessitating a short term focus that is so often demanded by the current funding environment — creates valuable space for charities to focus on their longer term strategy and sustainability. This need for core funding was expressed in the above mentioned consultation exercise as well as in independent, anonymous grantee perception reports conducted by the Center for Effective Philanthropy on behalf of PHF. These reports captured the views of 312 PHF grantees in 2013 and 253 during 2009. The report of their findings is provided at attachment 3[held by Committee staff and available on request].

 

  1. The need for core support also manifested in the demand we have seen for our Youth Fund since it was launched in August 2015.  The Youth Fund provides a maximum grant of £60,000 over two years towards core organisational costs and aims to enable organisations with innovative and influential ideas or outstanding practice to sustain and prepare to grow their impact. In 2015-16 we received more than 400 applications for the Youth Fund, totalling requests of £22 million. Ultimately £1.1 million was awarded, meaning success rates were approximately 6%.

 

  1. In February 2016 the Charity Commission published new guidance regarding grant funding for non-charities (further details located at https://www.gov.uk/guidance/draft-guidance-grant-funding-an-organisation-that-isnt-a-charity). This definition may apply to organisations such as social enterprises that, though carrying out valuable work and delivering on valid charitable objectives, also generate a profit or undertake other activities. Importantly, although the new guidelines purport not to be a regulatory change, their effect has been to introduce tighter restrictions for funders as they decide which organisations and what work to support. The new guidance also makes it more burdensome to make grants for core funding to non-charities: the (complex) guidelines effectively make project (rather than core) funding the only option.  The Inquiry may wish to review these guidelines and their ramifications for the provision of much needed core funding.

 

  1. PHF has also sought to support the broader organisational development needs of charities. Our Fitter for Purpose (‘FfP’) programme is one example of this and the final report on it is provided at attachment 4 [ held by Committee staff and available on request]. It highlights the importance of supporting charities to be ‘fitter for purpose’, rather than just helping them to survive. The FfP programme aimed to support 30 Paul Hamlyn Foundation (PHF) grantee organisations to become more resilient in the context of the recession and public sector cuts. The programme was funded by PHF and delivered by the National Council for Voluntary Organisations (‘NCVO’) starting in September 2012.

 

  1. The programme provided a focus, built confidence and in many cases acted as a catalyst for change. The project documentation and the grantee survey responses indicate that the main organisational outcomes were:

 

  1. In addition, a smaller number of grantees were supported in:

 

  1. In the online survey following the programme, grantee project leads were asked about the extent to which FfP met their organisation’s needs. The response was broadly positive: out of 27 respondents, 23 (85%) “strongly agreed” that the issue FfP worked on was “very important to the future of our organisation”, and the remaining 4 (15%) “somewhat agreed”. Evidence from the six-month reviews suggests that almost all of the grantees had continued the work started during the programme, further demonstrating that grantees felt the issues were important.

    2 September 2016