The Tubney Charitable Trust was set up in 1997 by Miles Blackwell, retired chairman of Blackwell booksellers, and his wife Briony, both of whom died unexpectedly just four years later. It was the wish of the founders that the trust should have a limited life, but they put no timescale on this. Caroline Hartnell spoke to René Olivieri, chair of the trustees, and executive director Sarah Ridley about the process of spending down.

It seems that it led to less emphasis on short-term return on investment and to a more equal relationship with grantees. But couldn’t this have happened without the decision to spend down?

I understand the timeframe for spending out was established 10 years ago. What difference did this decision make to your grantmaking?

RO: I think very early on our founders thought it was something that could be dealt with later. Following their untimely deaths, the trustees were conscious that the founders didn’t want to build up a big organization, going on forever. We put off thinking about what closure would mean in detail but established a fairly arbitrary ten-year timeframe. Right from our first strategic review in 2003, the trustees determined that we would narrow our focus and that we would be specialist funders using expert staff. The decision on the timeframe enabled us to be honest with the staff so that when they came on board they knew they weren’t going to be there for the rest of their career.

There is no question in our minds that ‘spend out’ focuses the collective mind and resources of a trust in an extraordinary way and can do more to achieve a trust’s long-term goals than a slow, modest, and possibly uninspired, perpetual outward flow of funds. Although we began as reactive project funders, over time our focus and expertise influenced the relationships we developed with applicants. As our focus in terms of project areas narrowed, it became more obvious to us that articulating what we wanted our final legacy to be was something that we had to address sooner rather than later. It was the staff who brought it to a head at a strategic review in 2007, saying, ‘if you really knew that we were moving into legacy mode tomorrow, would you do anything differently, and would that influence the decisions you’re making now?’

So in about 2008 we actively entered our legacy phase, in which we moved away from project funding to proactively providing support for sustainable capacity building for key organizations. If we went back and did it all again, it would be great to start out in legacy phase, but we had to go through a learning curve, we had to get there emotionally. If I had advice for other charities, it would be to live every year as if it were your last.

What would this mean in terms of projects and decisions?

RO: I think it would mean having much longer time horizons, and not being so focused on specific projects’ short-term outcomes, risks and returns. You need to realize that you only live on through other organizations, not through individual projects. That was our key realization, that project-based short-termism was no longer viable for us. We needed to take risks, understand and trust these organizations. We needed to find out what they thought was important, not what we thought. We had to step back from our own values and ways of measuring success, and ask them if they had a chunk of money, or if they could do things differently, what would they do?

Is it really possible to start out in legacy mode?

SR: I think it might be possible for some organizations to start out in legacy mode, but for us it was only because of the journey we went on with particular charities that we could identify the organizations that we wanted to support in a different way. For our trustees to build a sense of confidence, we had to see organizations deliver against particular performance measures. Now that they’ve proved they can do it, we know they will be able to deliver tangible outcomes.

In your report you say that each major proposal in the legacy phase grew out of the long-term relationships established with grantees during your project-funding phase. Wouldn’t it be hard for an organization to go into legacy mode without that experience of getting to know the field and finding out what the needs are?

RO: I think that’s true, but we could easily have drifted on doing great projects and then found that we only had a fifth of our resources left for capacity building. In fact we had about half, so I’m really glad that we took the plunge earlier. I think everyone felt we knew enough to make the right use of that money, and we had enough to make a difference.

It seems that things really changed in 2008, just three years before spend-out. You say the language changed: from return on investment (ROI) to capacity building. So even ROI seems like short-term language in this context, because it’s about you, measuring your achievements rather than what you’ve left behind.

RO: That’s right. We used to get a project proposal and try to improve it by applying our own business and legal skills. After a while it became clear that it would be better to pay for the organization to get additional professional advice on that particular project, or another longer-term project they might be considering but couldn’t afford to do themselves. And then it was a logical step to see that instead of us imposing these internal business disciplines like return on investment or long-term planning from the outside, they needed to develop them themselves as a core capacity. So we encouraged them to spend time and money to make themselves more effective, and indeed a lot of our legacy money is focused on that. Some people may feel that this was money wasted, but we think it helped them be more ambitious and think longer-term. We’re not going to be around to evaluate what they achieve, so I think that was a liberating experience for them and for us.

SR: The bit that I’m most excited about is not the fact that the trustees have signed some cheques for £3.5 million to individual organizations, but the impact that can be created by giving organizations who are nose-to-the-grindstone the time and space to think about themselves. In order to achieve their objectives, which most of the time they are very able to articulate, they need a clearly focused strategy with an appropriate business plan to ensure sustainability. The organizations have loved having that opportunity and have delivered way beyond what we could have dreamed. Where before they might say we want to do this, they’re now coming and saying they know they can deliver this. At first we had some people suggesting the money might be better spent on a project, but we had some interesting negotiations and suggested they might benefit by stopping to think about things more strategically. Several of them have come back and said that was the best thing they’ve ever done.

And do you feel confident that you’re now leaving your group of organizations in a state that they will be able to realize their ambitions?

RO: Absolutely, and more than they ever could have done before. It’s a combination of the money that we’ve put in and the process that we’ve gone through – we haven’t just been writing cheques! Particularly now with resources being so limited, nobody wants to take the big risks, everybody wants to show return on investments, and the danger is that you become very short-term-focused. By virtue of us backing off and giving money without specific projects attached, organizations were allowed to be more ambitious and take more risks.

These are very complex problems. If you look at one of our areas, farm animal welfare, for instance, it has so many dimensions – political, economic, consumer behaviour, international – that it seems impossible to do anything unless you can take a holistic view. We think the organizations we have supported all understand the issues better than a few years ago, and we feel that not only are they more effective in themselves, there’s also more teamwork and collaborative work going on.

You say in your report: ‘Up to this point our instincts had been frankly “controlling”. In this brave new world we had to take much more on trust. And we had to trust their vision and values rather than seek to impose our own on them. They were the experts, the long-term players; our new role was to help them aim higher, to raise their game.’ Power relations between funder and funded are obviously an ongoing issue, so is that more equal relationship something that grantmakers could get to earlier?

SR: I think it depends a lot on the players involved and the journey that those people had to go on. Different people might get to a different place at a different time.

RO: It’s difficult to know in a relationship – and they are personal relationships – when you can get completely honest with people. What we were able to do in the final phase was to set up a dialogue that went a long way to us understanding their point of view and taking on board what they thought their needs were.

Could we have done that earlier? What we could have done earlier, I think, is get to the point where we could focus on the in-house relationships and the depth of expertise in these subject areas. In our earliest years, we were trying to be experts, with a small board of trustees and a small staff, in too many areas. Maybe we should have focused on animal welfare, for example, a few years earlier, then we would have had more of a learning experience with those specific organizations. There were about 12 or 15 that we have funded in the legacy programme, almost all of whom have changed through that process and have more than satisfied us. I don’t think there was a single organization in our legacy target group that we haven’t supported in some way.

I can see that it’s perhaps not possible to have such an equal relationship when you don’t know organizations at the beginning: you need to get to know them, and you say it helped to narrow your field. But could you have moved to more open and equal relationships as you established relationships and got to know the field if you weren’t spending down?

RO: Yes, the two are not dependent on each other. What the spending down did was to create an urgency that makes you put in the extra effort. But what you really need is to establish those relationships and have the resources to do something significant. We were able to help the organizations on the next leg of their journey in almost every case. The other thing to remember is that these are all relatively small organizations in terms of resources, so half a million is a huge sum to them – and many of our grants were in terms of millions.

We invested a lot of time in understanding the context of issues, and that was really important. After a while, with the help of our partners, we were able to understand enough to be able to approach a complex problem in a systematic way. So we were able to see the wider context without knowing about the technical details. We could also see when two organizations had similar agendas and suggest a bit of working together. There was a bit of resistance to that at first but after a while they were suggesting new projects they could work on together. That was really gratifying for us.

Are the farmed animals organizations and environment organizations now networking informally among themselves?

SR: Yes, they are. In the environment sector, there were groups operating already that we were able to support, particularly on the marine bill, which we were happy to fund along with other folks. But in the farmed animal arena organizations weren’t up for sharing ideas and honest dialogue above and beyond the forums that we helped establish. We were bringing NGOs together with academics, farmers, supermarkets, government and DEFRA [Department for Environment, Food and Rural Affairs] to talk about these really thorny issues. And as always when you’re just stuck in the here and now, it’s important to take a step back, look from a higher level, and agree that you do have some shared values. We’ve really seen the power of bringing unlikely bedfellows together for a well-facilitated series of meetings. Particularly in the animal welfare arena, there are some really significant changes happening in the supermarkets, with regulators and trade associations working together to revolutionize the way animals are raised in this country.

RO: One of the other good things was that we stopped feeling bad about the things we couldn’t solve and started feeling good, and making other people feel good, about the things we could solve. There are problems in this area that are really difficult to solve in a commercially and economically viable way but there are improvements that regulators and welfare organizations and industry are happy to implement together, and just getting together to talk about those things was also a step forward. Focus on the positive, and involve market forces – don’t think it’s a bad thing to go out there and have a dialogue with business or other key stakeholders just because they’re doing a bunch of things right now that you don’t think are right.

You mentioned you’ve established a group for organizations that have decided to spend out. Is that just in the UK or Europe? And how many are in it?

SR: Well, it’s very informal and it grows and shrinks. We’ve lost a number of members because they’ve spent out, while others have joined us, but there are about 30 people who come on a fairly regular basis. Some are from Europe, and we have connections with folks from the US as well – we’ve had Atlantic Philanthropies join us – but it’s primarily UK-based just for ease. It’s been a kind of Chatham House rule network for CEOs to share some of the problems and joys of spending out. Because there aren’t that many folks who have travelled this road, trying to figure out the logistics of getting to zero is pretty complicated, and it’s nice to have a safe space to discuss those issues.

RO: Sarah’s become an expert on this, so she goes out and talks to organizations that have no notion that they might want to do this, to explain what the benefits and disadvantages are, what the costs are and what the process is like. We’ve encouraged her to spend trust time helping others through this process.

SR: Having said that, I don’t count myself as an advocate for spending out but an advocate for reflective philanthropy.

So if a foundation CEO came up to you, said they were thinking about spending out and asked would you recommend it, what would you say?

SR: Well, I’d ask a lot of questions. I think one significant question is how much money they have. If it’s a smaller amount, you can do something really significant by spending out. I think there are a lot of small organizations that have set themselves up thinking they’re going to be there in perpetuity, and this is where it’s useful to ask the questions: what are we achieving? Why do we feel we have to exist in perpetuity? What could we achieve now? The need is now, so what would we lose if we closed early?

RO: Sometimes it is a question of opportunity. We hadn’t gone into the marine sector as we didn’t think there was much we could help achieve in that area, but then the marine bill came on the horizon. This was a once-in-a-generation experience – there might not even be a next generation if we carry on treating the seas as we are – so we really piled in behind that. [The photo shows celebrations of the passing of the UK Marine and Coastal Access Bill in November 2009.] It was similar with our other areas: there was an urgency, a need for something now or else a problem was going to get worse or an opportunity would be lost.

Do you have any regrets in having decided to spend out?

SR: We didn’t really have much opportunity to regret because the spend-out was stipulated by the founders. But I do have one regret, which is that we’re going to have to close and lose the working relationships we have with the trustees and staff and with our grantee organizations, so that’s a shame. But to be able to see everybody flourish is a great joy.

RO: I have a regret too, which is that you don’t get an opportunity like this very often, to work with a small group of trustees who remain the whole time, and set your own roadmap and standards. If someone came along with a new chunk of money, I would put it all back together again.

For more information
http://www.tubney.org.uk