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Family foundations to reduce donations in future

British family foundations are set to reduce spending in the years ahead, as falling assets and tough economic conditions take their toll.

British family foundations are set to reduce spending in the years ahead, as falling assets and tough economic conditions take their toll.

That’s according to the Family Foundation Giving Trends report, which looked at the top 100 family foundations in the UK and found they gave £1.33 billion (€1.64 billion) in the last year and £6.9 billion over the past five years.

Family foundations are using their resources to “help tackle increasing societal need”, caused by government spending cuts to welfare budgets and a deepening recession – but do not feel they can continue to meet the increased demand for funding.

Of 40 foundations surveyed, 23 said they expected less funding to be available in the next three to four years.

The report, produced by the Pears Foundation and the ESRC Centre for Charitable Giving and Philanthropy at Cass Business School, also found foundations “strongly value” their independence – and prefer to partner with other foundations rather than the public sector.

Co-author Cathy Pharoah, professor of charity funding and co-director of the ESRC Centre for Charitable Giving and Philanthropy, said the government might need to rethink its policies regarding giving.

“Philanthropic resources are small in relation to public sector spending. [The] government needs to understand family foundation donors better, and recognise that their independence of vision and action inspires significant added value to social well-being and donor engagement,” she said in a statement.

According to the report, health was easily the most popular cause with £740 million of funding – mostly thanks to the Wellcome Trust, a London-based charity that funds medical research. Without the Wellcome Trust’s donations, investment in health causes would stand at £143 million.

Education at £146 million was the second most popular cause, followed by arts and culture at £133 million and social welfare at £108 million.  

Overall, the amount given over the year - £1.33 billion – was down 1.8% on the previous 12-month period. However, excluding the Wellcome Trust, it was up 6.2%. 

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