Over the last couple of years we have all been on a journey into the unknown and now we feel like we might have arrived, but…
Duncan Leslie’s role at PKF Francis Clark focuses on delivery of services to larger organisations including the not-for-profit sector in Devon and Cornwall. PKF Francis Clark act for over 250 charities throughout the South West, as well as a number of CICs, Registered Social Landlords (RSL), Industrial and Provident Societies (I&P), clubs and associations.
The not-for-profit sector does not immediately spring to mind when thinking about the Chancellor’s Autumn Budget. However, Social Enterprises are an important key driver to sustainable economic growth. The South West area has one of the highest concentrations of social enterprises in the country and they are particularly well represented in the micro business sector that is the mainstay of our rural economy.
There are a few key things that could come out of the Budget briefcase that would enable local charities and volunteers to help vulnerable people find work, and strengthen local grant making. With that in mind, The Association of Chief Executives of Voluntary Organizations (ACEVO) and the UK Community Foundation have written to the Chancellor ahead of the Budget with two important proposals:
Create a successor fund to the European Social Fund (ESF) following Brexit
The proposal is that the Government uses the money previously spent on European Structural Funds to create a successor fund. ESF funding provides important investment for the UK in education, training and employment support, targeting vulnerable groups who often fall through the gaps of mainstream public services. This includes people with disabilities and health conditions, people facing multiple or complex barriers to employment, and ex-offenders.
The idea would be to develop a world-leading initiative that builds on the best aspects of ESF while addressing the design flaws which many consider to include wasteful bureaucracy.
Use dormant assets to support local communities
The Government’s Commission on Dormant Assets recently concluded that there is approximately £1–2bn of potentially dormant financial and non-financial assets. The proposal is that those assets are used to strengthen local philanthropic institutions, such as community foundations and local funders, to help fund small and local charities now and in the future.
Community Foundations are a growing UK success story. They encourage local philanthropy, using the funds they raise to make grants to local charities, based upon their expertise of what is needed and what works locally. They’ve already built an endowment of £500m. Match funding from dormant assets could be used to incentivise further donations from philanthropists.
Investing half of the maximum total from dormant accounts – £1bn – could potentially generate a 4% return of £40m per year for local grant-making in perpetuity, more if match funding was sought from philanthropists. Widening the network of endowed Community Foundations, and increasing the level of capital they hold, will generate investment returns from which small and local charities can be grant funded.
At a time when grants to charities are in decline, this is a valuable opportunity to address the sustainability of charities so they can continue to support and help communities create opportunities for themselves well into the future.
“We at PKF Francis Clark see the benefit that these initiatives could bring to the local Not-for-Profit sector, which is so important in the South West and believe these should be explored further by the Chancellor as part of his budget or indeed as a separate exercise”.