On the up
What do UK trusts and foundations contribute to international work? New research suggests that it is all about growth and change.
In a fast-changing global political and economic environment, what has been happening to private funding for international development in the UK?
The peak year for total international philanthropy was 2007, according to the US Hudson Institute, representing the culmination of a steady rise from 2003 onwards. But there is evidence to suggest that 2007, the heady year of spending before the recession and the subsequent period of economic turbulence, was the peak year for most private giving[i].
The government has, amidst its sea of expenditure cuts, protected funding for international development. So what has been happening within private philanthropy? This article provides some early findings from new research on the contribution of private UK trusts and foundations to funding international development and related activities[ii], commissioned by the Nuffield, Baring and Paul Hamlyn Foundations. It updates their earlier report, ‘Going Global’, published in June 2007.
The full research will be published later this autumn, providing updated figures for the amount of funding, as well as some new information on the distribution of funder interests by region, topic and beneficiary, and including a review of some trends in the way international funders are shaping their international programmes.
Level of interest amongst private trusts
Results indicate that overall private trust funding for international development and related issues is fairly substantial.
Results indicate that overall private trust funding for international development and related issues is fairly substantial. Interest in international funding has continued to grow, and a number of new trusts which fund internationally have emerged, including the Children’s Investment Fund Foundation, The Waterloo Foundation, The Ashmore Foundation and the Kusuma Trust UK. The results of the current study show that international development and related causes is an important funding theme within the largest UK charitable grantmaking trusts, as well as many of the smaller ones. They indicate that at least 90 trusts are providing funding above £50k in this area, a larger number than had been thought. In fact, they represent almost three-quarters of the total income value of all grantmaking trusts in the UK, showing the bias towards the larger trusts.
Priority given to international development funding
But while international development funding clearly occupies a distinct place in the funding programmes of many of the UK’s major trusts, how important is it compared with other areas of work? The research has found that there is a very wide range in the proportion of funding dedicated to international development. Some trusts are devoted wholly to international working, while others include a very small international element within a generic funding programme.
The graph below illustrates the percentage of funding dedicated to international development and related work across the funder population. There is a large cluster of funders at the top end of the range for whom international funding represents all, or almost all, of their funding. The average proportion of funding dedicated to it by funder was 45 per cent. This figure reveals that international development tends to have a fairly high priority amongst supporters, though the proportion of all UK trust funding devoted to international causes is much smaller.
Distribution of proportion (%) of funding dedicated to international development across 90 trusts
What do private trusts fund?
The research drew on published reports and accounts for its data, and the amount of detail given on where and what trusts fund is highly variable. Analysing available data, however, the research has found that trusts’ interests in international activities are extremely diverse, and that they are funding a wide and ever-growing range of subject areas.
In spite of diversity, however, certain topics attract considerably more funders than others, and health care and formal education are amongst the most common priorities. Newer areas of funding, however, such as utilities and infrastructure attract nine per cent of funders.
There is growing interest in topics such as climate change and sustainable agricultural development, but the challenge for trust funders is that such new areas have to compete for their limited, and currently shrinking, grantmaking pots. Some funders, like the Waterloo Foundation have a separate Environmental Fund in addition to their international grants fund.
Trusts also stretch their funding over a wide geographical area, covering all the main developing country regions. Not surprisingly, funding is unevenly spread between regions, with Africa and Asia attracting the highest numbers of funders; it is also unevenly spread within regions with, for example, West Africa attracting less than East Africa but still getting support from 10 per cent of funders, while emerging causes in Eastern Europe have attracted eight per cent of funders.
How trusts work in international development
Building expertise where there is such a breadth of interest in the international arena remains a challenge for trusts, and one which is only growing as interest in, and concern for, global issues expands.
International NGOs continue to play a crucial intermediary role for many trusts in channelling international development funding. It may also mean, however, that trust funders themselves are less engaged in ways which would build their knowledge, help develop the field more generally, and raise awareness of needs amongst other funders. Several trusts would welcome more opportunities to develop their expertise of particular issues and regions, and how NGOs can make effective interventions. There is a trend for some of the more recently established private international funders to specialise in particular areas, as a way of increasing their impact, such as the examples of CIFF and the Kusuma Trust (UK).
More developments following the model of the Africa interest group, or the debate on the changing situation in India in relation to the non-governmental organisation role, which the Paul Hamlyn Foundation has initiated, could play a useful role. Partnerships which increase leverage for change on the ground through strengthening links between funders, intermediary organisations and local resources, such as the Worldwide Palliative Care Alliance, and the European Foundations Initiative for Neglected Tropical Diseases which aims to strengthen African research capacity in neglected tropical diseases, in which Nuffield participates, are likely to grow in appeal.
Written by Cathy Pharoah, Co-Director, Centre for Charitable Giving and Philanthropy, Cass Business School.
This research is being carried out by Cathy Pharoah, and Lynda Bryant, CGAP, Cass Business School, and is due to be published later this Autumn.
[i] Pharoah, C. (2011) Charity Market Monitor 2011. CaritasData. London
[ii] International development is used in the report to refer generically to activities in developing countries and emerging economies encompassing growth, governance, health, education, gender, disaster relief, humanitarian aid, infrastructure, rights, economic and environmental sustainability, and associated research.
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