GRANTMAKING EXERTISE

The Foundation specialises in finding and funding charitable activity. Currently, we receive over 2,000 applications for funding a year, from which we make approximately 700 awards. We employ eight full-time grant officers and work with over 40 volunteers with a background in social welfare to assess every grant application we receive. In addition, we can undertake research in particular causes and advise on current service providers in any area in Scotland.

FUNDING OPTIONS FOR CHARITABLE TRUSTS

Trusts can work with the Scottish Community Foundation in two ways:
Trustees can choose to make a one-off or annual award to the Foundation, which would be ring-fenced and distributed in accordance with agreed criteria within a twelve-month period.

Trustees can make a gift of capital to the Foundation,which is held in a ring-fenced invested fund earning interest. The capital and interest can either be spent over a number of years (an expendable endowment) or it can be held in perpetuity, where only the annual interest is used (a permanent endowment).

INVESTMENT AND ENDOWMENT POLICY

The Foundation holds the majority of its endowments in a unitised, common investment fund which is specially designed for charities. This means the fund benefits from preferable tax treatment. The majority of our investments are managed by Newton Investment Management Ltd.; however, trustees can ask that a gift of capital be managed by an investment manager with whom they have an established relationship.

TRUSTEES AND ADVISERS

Trustees (or former trustees where the trust has been wound up) can act as advisers to a fund and have final approval on the grant recommendations made to them by the Scottish Community Foundation. Alternatively, trustees can leave the decision on allocation of funds to the Foundation’s independent grants committee.

CHANGING THE PURPOSES OF A TRUST

The purposes of a charitable trust can be legally modified with the permission of the Office of the Scottish Charity Regulator (OSCR). Often this is considered desirable when the terms of a trust become antiquated or impossible to meet. The Foundation can assist in the process (known as ‘reorganisation’) and create a restricted and named fund which has relevancy in today’s world.

REPORTING

We supply an interim six monthly and a full annual report on all grantmaking activity. In addition, up to date information on use of the fund can be accessed through a secure online facility on our website.

EXAMPLE SCENARIOS

SCENARIO A: The MacDougal Charitable Trust was set up in 1880 by Stewart and Donald MacDougal, two brothers from Scotland, who made a fortune through banking in the Far East. The current trustees are based in London and are direct descendants of Stewart and Donald. Around £250,000 is distributed annually to “alleviate the suffering of those excluded from society”. The Trust Deeds state that a minimum of one fifth of the distribution must be in Scotland.

OUTCOME A: The MacDougal Charitable Trust makes an annual award to the Foundation of £50,000 and the Foundation identifies suitable projects. Projects are then assessed and recommendations are made to the trustees in London who retain final approval on all awards made. A follow up report on each award is forwarded to the trustees a year later.

SCENARIO B: George and Morag are brother and sister who are the surviving trustees of their late father’s charitable trust, The Galston Trust. The Galston Trust was set up to support projects working with children and young people in the Highlands. George now lives in Glasgow and Morag lives in Spain and neither is able effectively to identify groups that meet the criteria of the Trust.

OUTCOME B: Working with George and Morag, the Scottish Community Foundation studies the Trust’s constitution and applies to OSCR for consent to transfer the assets to a named fund with the Foundation. A gift agreement is drawn up to govern the use of funds, and signed by all parties. George and Morag choose to be advisers to the fund and make the final decision on recommendations made to them by the Foundation as to which groups are supported.

SCENARIO C: The Tyrit Trust was set up over 100 years ago to benefit “poor and aged women in St Catherine’s Hospital”. The hospital has subsequently been closed down, and the funds remain invested with nothing being distributed. The current trustees are lawyers who are not in a position to identify appropriate beneficiaries.

OUTCOME C: The Scottish Community Foundation – at the request of the current trustees – applies to OSCR to have the trust reorganised as it can no longer be distributed for its original purpose. The assets are transferred to an appropriate endowment fund with the Scottish Community Foundation, in this case the Women’s Fund for Scotland.