Australian foundations and the downturn

Abstract

Building on the investigation of the Charity Commission (2009) on the effects of the
economic downturn on the largest trusts and foundation in the United Kingdom, the
purpose of this research was to assess the extent to which Australian trusts and
foundations were taking an actively strategic approach to their investments and pursuit
of mission (including grant-making), and the relationship between the two in the context
of the economic downturn. Focus was given to identifying the issues raised as a
consequence of the economic downturn, rather than providing a generalised snapshot
of the ‘average’ foundations response.
In September 2009, semi-structured, in depth interviews were conducted with executives
of 23 grant making trusts and foundations. The interviews for this research focused on
the largest grant makers in terms of grant expenditure, however included foundations
from different geographical locations and from across different cause areas.
It is important to stress at the outset that this was not a representative sample of
foundations; the study aimed to identify issues rather than to present a representative
picture of the ‘average’ foundation’s response. It is also important to note that the study
was undertaken in September 2009 at a time when many foundations were beginning to
feel more optimistic about the longer term future, but aware of continuing and possibly
worsening short term income problems. But whatever the financial future, some of the
underlying issues, concerning investment and grant making management practices,
raised in this report will be of continuing relevance worthy of wider discussion. If a crisis
is too good to waste, it is also too good to forget.
One other introductory point – as previously noted, interviews for this study were
conducted in September 2009 – just one month prior to the introduction of the new
Private Ancillary Fund (PAF) legislation which replaced the previous Prescribed Private
Fund (PPF) arrangement1. References to PAFs and/or PPFs reflect that time.