What does it mean to be part of a ‘local eco-system’?

Anyone that has been part of the voluntary sector for any period of time will know the amazing transformations that charities and community groups are capable of making in people’s lives. They will also know of the enormous challenges facing these voluntary organisations: increasing demand; the seemingly intractable problems they exist to address and the difficulty in attracting enough funding, not just to make a difference, but to keep going at all. The recent Budget announcement about a rise in National Insurance contributions for employers will only add to this if charities are not exempted. Nevertheless, trusts and foundations, large and small, play a key role in supporting organisations to make the incredible changes that they do. Together this partnership of the ‘funder’ and ‘funded’, though not without its challenges, makes a direct and lasting difference, year in and year out, in tackling some of the greatest challenges and hardships in our communities.

This is as true here in the London Borough of Richmond, as it is across the rest of the UK. There are a number of locally based foundations, including Hampton Fund, alongside a very well established and diverse range of voluntary organisations. Together there is a very apparent sense of these relationships forming an interdependent eco-system. In my first 10 months at Hampton Fund, I have been really struck by this.

Hampton Fund has played a long-standing role within this system. Along with our funding peers, we have played a part in helping to establish it. But as we come to the end of a strategic review that we began at the beginning of this year, we have been trying to understand how best we can contribute to this system in the future. We do this, however, in some challenging circumstances.

Grant making bodies and funders undertaking strategic reviews have become a common occurrence recently. The demand for funding is reported to be incredibly high currently, and the news that City Bridge Foundation are closed to new applications for a year to undertake a funding review has come as a shock to many charities across the Capital. There will be many factors contributing to this trend, as Carol Mack at the Association of Charitable Foundations has highlighted. Her assessment suggests one of these reasons may be that many foundations, having taken the decision to distribute more funds during the pandemic and cost of living crisis, are now having to take stock of how they allocate their resources going forwards. I’m sure, as they do this, that they will be all too aware that the impact of COVID and high inflation over the last few years will continue to have a significant impact on the most vulnerable for some time to come.

Hampton Fund’s own spend on grants has increased by 30% since 2020. It would be understandable to come to the conclusion that, with a large endowment, we are sitting on a lot of money and therefore question why this should be an issue. However, like many foundations our investments form a permanent endowment and the trustees have a duty to maintain this for the future as well as for today’s recipients. So, as we continue to feel unprecedented demand for our own funds, we have tried to address these tensions in our strategic review by better defining the role that we do play in the system we form part of.  This is an important step in ensuring the precious resources we manage are having the greatest possible impact.  I am pleased that we have not been in a position where we too have had to pause our grant making to new applications while we have these discussions, but at the same time we have had to recognise we are at the limits of what we can currently fund annually.

There is some excellent work by an organisation called The Lasting Difference on system sustainability, leadership and capacity which I keep coming back to. My thanks to Melissa Wilks at Richmond Carers Centre for sharing this with me originally. It asks all of those involved in the voluntary sector, but particularly funders, to think carefully about the role they play in the systems they form part of. It challenges funders to ask if the ways they operate are actually causing a lack of sector sustainability and capacity, rather than facilitating it. As we have been undertaking our strategic review, this provocative challenge has been very much on my mind. As has a related one, from the charity research organisation IVAR, which asks funders to consider their attitude to risk. There is an imbalance in the relationship between the ‘funder’ and the ‘funded’ in many ways, not least when it comes to risk. While it is the duty of the trustees of endowed foundations to manage the resources they are responsible for diligently, it is also incumbent on them – who, by their nature, are in the more privileged position in the funder/funded relationship - to take the initiative in trying to understand the negative impacts of this imbalance and how it can be reset.

Our strategic review has created the opportunity for Hampton Fund to tackle these issues in our grant making and local relationships. It will undoubtedly challenge us to do it, but the prize will be that we are playing the most effective role that we can within our local system. It will be for the rest of those that form the system to judge how well we achieve our goal.

We have begun the process of talking to funded partners, and other key stakeholders, about how changes emerging from the review might affect them, and we will be sharing our strategy more widely in the coming weeks.  In the meantime, both I, and the rest of the team at Hampton Fund, are always happy to have a conversation about our current priorities.