Reinventing philanthropy Key IT trends Total return The constant changing nature of Charities and opportunities The benefits of following a total philanthropists & philanthropic giving offered by new technology return investment approach October/November 2013 l www.charitytimes.com Making corporate partnerships work EDITORIAL COMMENT Editor Andrew Holt [email protected] Holding the Lobbying Bill 020 7562 2411 Contributing Writers Beth Breeze, Stephen Bubb, David Emerson, The Lobbying Bill is quite a piece of legislation in the Tracey Gyateng, Joe Irvin, Theresa Lloyd Maurice making. It has had the impact of uniting such diverse sector Mcleod, Alex Murdock, Cathy Pharoah, Ben organisations as the League Against Cruel Sports and the Phillips, Antony Savvas, Hannah Stoddart, Oliver TaxPayers’ Alliance in opposition to the Bill. That is some Wallin achievement. Design & Production The deep discontentment and confusion amongst the Matleena Lilja sector is completely justified. This Bill at its heart threatens [email protected] the independence of charities and their ability to campaign. 020 7562 2400 As a result a diverse coalition of prominent charities, Commercial Manager campaign groups, academics, think-tanks and online networks launched an Cerys Brafield independent Commission, the Commission on Civil Society and Democratic [email protected] Engagement, in response to concerns about the Lobbying Bill. 07766 662 610 In its report, Non-Party Campaigning Ahead of Elections, Lord Harries of Pentregarth, Advertising Manager chair of the Commission, writes: “Part 2 of the Lobbying Bill risks profoundly Steve Good undermining the very fabric of our democracy by significantly limiting the right of [email protected] organisations — from charities and community groups to think-tanks and blog sites 020 7562 2435 — to speak out on some of the most important issues facing this country and the Subscriptions planet. Whether we agree with these organisations or not, their role is essential in Joel Whitefoot order to have an informed, engaged electorate.” [email protected] The report addresses three key issues: the state of civil society’s engagement in 020 8950 9117 democratic processes; the likely impact of Part 2 of the Bill on campaigning activity Subscription Rates (6 issues pa) if it passes into law in its current form and what changes to regulation of non-party £79pa registered charities campaigning are needed ahead of elections. £119pa rest of UK, £127pa EU And in so doing, the Commission has recommendations that fall into three £132pa elsewhere categories: a central recommendation that the Government should pause Part 2 Printed by Warners Midlands of the Bill to allow for proper consultation and consideration. Second, if the central All rights reserved. The views expressed recommendation is not implemented, changes to Part 2 of the Bill to limit the are not necessarily those of the publishers. damage to democratic engagement of civil society and third, consideration of ISSN : 1355-4573 regulatory changes to non-party campaigning beyond 2015. Published by The Commission concludes: “To follow the Committee’s recommendation would, Perspective Publishing, 6th Floor, by definition, introduce a delay into the Bill’s legislative process and thus delay its 3 London Wall Buildings, London EC2M 5PD implementation. This would mean it would be unlikely the Bill’s provisions would be in force prior to the 2015 General Election. www.perspectivepublishing.com “However, the Electoral Commission have not indicated any need for such an Managing Director urgent change and in their briefings their concern has focused on the need for new John Woods provisions to be considered, guidance produced and organisations given time to Publishing Director make adjustments.” Mark Evans One can only hope that the government listens to the strongest pleas here and, for the benefit of the sector, puts the Lobbying Bill on hold. Andrew Holt, Editor Average net circulation of 10,373 copies for July 12 – June 13 www.charitytimes.com 03 Has your investment manager downgraded your service? Unfortunately, it is an increasing trend; many investment management fi rms appear to be putting the needs of their own business before your needs. At Rathbones we seek to offer a solution; in a world where investment management is increasingly impersonal and automated, our approach is truly compelling for charity clients. We currently invest over £2.5 billion of charitable funds globally on behalf of 967 charity clients*. For more details please contact Francesca Monti on 020 7399 0119 [email protected] www.rathbones.com * As at 30 September 2013 The value of investments and income arising from them may fall as well as rise and you might get back less than you originally invested. Rathbone Investment Management is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 21260-12_Rathbones Ad_Pewter Live_271x204_v1.indd 1 28/10/2013 14:39 CONTENTS 29 32 23 COVER STORY: CORPORATE PARTNERSHIPS Corporate partnerships are becoming more central to the work of sector organisations, but measuring the impact of the partnership is key, says 36 Maurice Mcleod News-in-Depth Columns Features 06 An anatomy of social investment 16 Trusts and foundations PHILanthropY Analysis by Professor Paul Palmer David Emerson on finance 29 Reinventing philanthropy 08 The ethics of investment 17 Sector engagement Beth Breeze and Theresa Lloyd analyse the National Ethical Investment Week Ben Phillips & Hannah Stoddart on history of philanthropy, finding it is not a climate change and the sector simple, static activity with philanthropists The Review 18 Sector governance open to change Stephen Bubb on boards 12 Surviving Austerity 19 Data analysis KEY IT TRENDS Reviewed by Joe Irvin Tracey Gyateng on sector data 32 Technological engagement 13 Housing and philanthropy Antony Savvas says charities are approach- Reviewed by Cathy Pharoah ing the opportunities offered by new tech- 14 The Green Standard nology with caution, but they shouldn’t be Reviewed by Alex Murdock Charity Services put off from testing the water Analysis and Profile 46 Suppliers Directory TotaL return Comprehensive listings of products 36 Freedom from constraint 10 Sector Analysis and services for the sector Oliver Wallin argues that a switch to total Becky Slack analyses return mandates could give charities a politics and the sector more effective way of managing risk 20 Profile Andrew Holt met Rebecca Wood, CEO, Alzheimer’s Research UK www.charitytimes.com 05 NEWS IN DEPTH An anatomy of social investment At the Charity Times Investment Conference, Andrew Holt is wholly in furtherance of the charity’s aims,” he said. heard an invaluable in-depth analysis of social investment PRI often takes the form of loans, equity investments or pooled funds. If the PRI is a loan, the loan agreement should set out: how it will be used to further the charity’s rofessor Paul Palmer, professor of aims; and a rate of interest considering the Pvoluntary sector management, and impact on their charitable aims and the Associate Dean for Ethics, Sustainability rate that the borrower might able to and and Engagement at Cass Business School willing to pay. gave one of the most insightful discussions “Trustees must act in the best interest on social investment at the Charity Times of their charity when making a PRI and Investment Conference held in October ensure that: their charity’s funds are only in London. used to further its stated aims; they have Professor Palmer started with first regard to private benefit; before making premises, stating social investment is an the PRI trustees should be clear that and emerging investment class which involves it contributes to the charity’s strategic a generation of blended social and aims and compare PRIs with other ways financial return on capital for the investor of advancing the charity’s aims in terms of and can include equity, bonds, charity effectiveness and risk. PROFESSOR PAUL PALMER bonds or social impact bonds, or other “Where an investment cannot be wholly forms of debt which are typically issued by “Social investment needs to be justified as either a financial investment charities and social enterprises. undertaken for exclusively charitable or PRI, it may be possible to justify it as a “The social return is achieved as a result or community charitable purposes. mixed motive investment. of the deployment of capital raised by the Some incidental private benefit is “Investments still need to be justified issuer in sustainable and social beneficial accepted” as being in the best interest of the activities,” said Professor Palmer. He noted charity and trustees should consider the that most forms of social investment justification for making the mixed motive are loans, share or partnership capital, referred to as CC14). The Commission investment,” he said. combinations of loans and equity funding identifies two separate types of He noted the suitability of a mixed and unsecured loan notes. investment that might be defined as motive investment for the charity is Within this there are three other forms social investments. These are performance addressed by: does it provide part financial of investment: Charity Bond; Social Impact related investments (PRI) and mixed return and part contribution to the Bonds and Revolving Loans. Investment motive investments (MMI). charity’s aims? is not limited to a charitable organisation Palmer added that it should be noted On MMI, Professor Palmer said the size or excluded from an organisation that is that the Charity Commission is continuing of the MMI should be in the context of the not charitable. to research PRI and MMI. “The Commission charity’s overall investment portfolio and “The investment needs to be undertaken accepts that the guidance is currently the charity’s attitude to risk .“An MMI is for exclusively charitable or community lacking in some areas and the Commission not justified when it is made for purposes charitable purposes.