Firms put good causes on a firm foundation

Nov 5 2008 by Iain Laing, The Journal

As the Community Foundation celebrates its 20th anniversary in the region, Iain Laing looks at how it works and why businesses give to charity.

PEOPLE in the North-East pride themselves on their generosity and the success of the Community Foundation suggests that the region’s businesses share that quality.

Set up in the region in 1988, as one of the first in the UK, the Foundation is still the largest in the country by a wide margin, managing £41.5m of funds. Last year alone, it made grants of £7m to nearly 1,750 local worthy causes on behalf of more than 150 individuals and businesses. Companies, as well as individuals and families, can set up their own charitable fund at the Foundation, a fund that can be dedicated to the support of issues and causes particularly aligned to the donor’s business or personal interests.

Apart from managing funds, the Foundation also advises on charitable giving, researches suitable projects for individual funds to support, looks after all the administration involved in making donations and ensures those donations are made in the most tax effective way.

Predominantly, the Community Foundation supports organisations operating in Tyne and Wear and Northumberland. Here, it helps hundreds of smaller voluntary groups which could never hope to rival the profile and fundraising abilities of some of the household-name national charities. Commonly, businesses have been heavily involved in supporting the community through charitable giving for some time before they become formally involved with the Foundation.

Commercial law firm Muckle LLP had long supported various community projects before it started a Community Foundation fund.

Senior partner Hugh Welch, also now chairman of the Foundation, recalls: “Six years ago, we were donating a lot of cash and doing a lot of free legal work in a haphazard sort of way. We set up the fund so we could be more organised and more effective.”

Similarly eaga plc, Newcastle-based leading provider of residential energy efficiency solutions, only set up its fund last year, although its links with the Community Foundation go back many years and it has had its own charitable trust since 1993, focused on sponsoring work on the eradication of fuel poverty.

Involvement in the community is a common theme among businesses which have funds with the Community Foundation and many of them seek to maximise that involvement by engaging their staff in the donation making process.

Ryder Architecture in Newcastle has recently started a fund with the Community Foundation and it has a committee, its Working Group, made up of non-directors which decides how money is disbursed from the company’s Community Foundation fund.

The Community Foundation administers Muckle LLP’s fund, but decisions on individual donations are made by the firm’s Community Committee.

“The Community Foundation is able to notify us of well-run voluntary projects which are deserving of support.

“It allows us to make good use of our money and to make good grants,” says Mr Welch.

“But, it is our Community Committee, made up of non-partners meeting quarterly, which ultimately decides which of the suggested causes we should donate to.”

Half a dozen of eaga’s employees, or partners, sit on a grants committee to assess applications.

The result is that hundreds of charities, community projects and voluntary organisations throughout the North East benefit. Since its fund was set up, Muckle has donated to more than 110 local causes, from Victim Support South Tyneside to Hebburn Lawn Tennis Club. Eaga’s donations include more than £18,000 to the homeless charity Crisis and more than £4,000 to a young people’s project in Walker.

Muckle LLP’s partners have given more than £250,000 of their own money to the firm’s Community Foundation fund since it was set up in 2002 and eaga has given £150,000 in its first year.

But why do commercially minded businesses divert hard-won profits into good causes?

Partly, it seems, because they believe it to be good business. Muckle finds it helps in the recruitment market.

Mr Welch says: “We find our involvement in the community is a positive draw when we are recruiting young lawyers, who increasingly rank an emphasis on corporate social responsibility high among their priorities when looking at firms to join.”

John Clough, eaga’s chief executive, says: “It allows our people to see and interact with the people they serve on the ground as opposed to just being at the end of a phone, so they really get to understand what makes them tick. Also, it gets us good media coverage and that raises awareness of us as an organisation and what we are about.”

But the businesses we contacted all claim a wider and genuinely philanthropic agenda.

Mr Clough adds: “This business is very much a values-based business. Those values are very simple: it’s about dealing with partners, with customers and our community with integrity, respect and enthusiasm – there’s no better mission statement than that, those are the values that drive the business.

“For us, our Community Foundation involvement is a demonstration of us walking the walk.”

And managing director of Ryder Architecture Mark Thompson says: “I would like to live in a society where there were no charities because everything would be provided, but that’s a long way off and, until then, I think it’s important that successful businesses give back to the community and support the local community and the Community Foundation is a good vehicle for that.”