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The Shirley Foundation Spend Out

The Shirley Foundation Spend Out

Introduction by Sir Alec Reed
 
'Dame Stephanie Shirley CH has been an inspiration to many during her two careers of entrepreneur and philanthropist.  However, it may be the third stage of her life which she describes as ‘spending out’ that could have the greatest impact. 
 
Many trusts and charities do not spend enough of their income, they build assets. This is why the sector is so well served by the best banks and financial institutions. 
 
If Dame Stephanie’s example prompts those organisations to spend more freely it will have achieved a great deal. 

Aftr over 20 years of best practice in giving, in 2016 The Shirley Foundation decided to spend out.

The foundation had been started in 1994 ‒ with me chairing three co-trustees: one legal, one financial and one medical. Ignoring good corporate governance guidelines, we did not rotate trustee/directors and that stable board with minimal expenses and next to no back-office costs had served the grant-giving foundation well. The foundation had made social investments of more than £15m in IT (my professional discipline) and £50m to autism (my late son’s condition) and had less than £1m left.
 
Decisions, decisions
 
We were an innovative, disruptive foundation with an appetite for risk. The decision to spend out came from discussion of our current mission  Facilitation and support of pioneering projects with strategic impact in the field of Autism Spectrum Disorders, with particular emphasis on medical research which had not been reviewed since 2002. That strong mission gave a culture with no mission creep. But did the foundation know enough? Was it doing enough for large and small organisations? And was the mission right? The foundation had broadened out to cover the whole autism spectrum. Perhaps there were ways we could be more focused.
 
Trustees were happy with the grants that had been given to date and felt that the foundation had been suitably proactive. But it was a ‘small player’ and perhaps should focus on one or two precise areas and leave the rest to those with larger resources. The medical trustee felt that the foundation could focus on severe areas as this is where any breakthrough is likely to come from.
 
The foundation had founded five charities, four of which had become 
self-sustaining. Should we retain the funds to launch another charity or aim to absorb some of the smaller charities? (The latter suggestion was most vigorously rejected!) Then came the bombshell: the suggestion that it might be a good time to wind up the foundation.
 
The trustee board then held a special meeting to concentrate on future strategy. This concluded with a unanimous decision that the foundation should aim to cease operating by end 2018.
 
It was influenced by the conclusion of a hugely important project, which had brought many autism sector players together. And a third-party assessment summarised our work as inspirational; proving our venture philanthropy model had worked so we would be going out on a high.
 
Making Spend Out happen 
 
Although I had initiated the discussion, my life had revolved round the foundation for so long that its conclusion hit me as a shock.  It had been the beneficiary of my Will and my previous planning had been for it to Spend Out after my death. The following day I was still in shock. Then I rallied and started to assess the work to be done.
 
My aim in the foundation’s Spend Out was to be professional, impactful and to capture the experience for others’ benefit just as I instinctively sought to build on others’ experience. Our commercial and entrepreneurial approach meant we had always adopted best practice from other disciplines; and developed the ability to scale. 
 
I studied trusts that spent down or were planning to do so: Northern Rock Foundation; Atlantic Philanthropy; Queen’s Trust; Tubney Trust – (an excellent model of doing it well in a number of ways); Diana, Princess of Wales Memorial Trust; Emmandjay Charitable Trust. I also met with the Queen Elizabeth Diamond Jubilee Trust and New Philanthropy Capital to pick their brains.
 
I noted that the Association of Charitable Foundations (ACF) recommended a two-year run out period but considered our foundation would not require this. (though in fact we took somewhat longer!).
 
There was a mass of tactical issues: to chase in project reports, outstanding invoices, cancelling (or in our case not renew) our insurance, notifying people for courtesy, cancelling entries in directories, and a cumbersome transfer of one major project’s asset legacy. 
 
Other matters had to be formally agreed with our Residual charity as to the transfer of investments and bank assets, and – with enormous effort – a novation agreement to write off half an outstanding debt before transferring the debt to the Residual charity. It was not necessary to liquidate our assets since the Residual charity wanted to receive them in their current form. However, it proved cumbersome to prove that neither charity was involved in money laundering!
 
Final spasms
 
When the last project report was received, a (rare) donation came in so the three-month wait period between last transaction and final closure had to be restarted. But there were still things to tidy up. As current projects ran out, I started to focus on legacy and initiated discussions with the University of Kent which resulted in The Shirley Foundation being the first depositor to its UK Philanthropy Archive. 
 
We rejoice in our legacy:
 
  • General awareness of autism, including at national level.
  •  A voice to autistic people.
  • Have told the story including failures.
  • Saved two not-for-profits: Autism West Midlands and Brondyffryn special school.
  • Founded Autism Cymru which, in its 11-year life, lead to the first national autism strategy and, unusually, closed when its initial mission was achieved.
  • Founded three charities (Autism at Kingwood, Prior’s Court, Autistica,) and taken them to sustainability (together employing 1,000).
  • Set-up/co-founded four not-for-profits (Worshipful Company of Information Technologists, Oxford Internet Institute, UK Philanthropy Archive, All-Party Parliamentary Group on Autism).
  • Initial funding of many projects (Music for Autism, Good Autism Practice magazine, Jigsaw, NAP, NAT, PACE).
  • Supported some 70 projects in venture philanthropy mode
What next?
 
2½ years after the decision to Spend Out we are putting together the foundation’s archives; my memoir has been re-published by Penguin; and its filming for the big screen is contracted to start. Who is going to play me? We shall have to see…
 
Dame Stephanie Shirley CH
 
June 2019
 
For further information please go to www.steveshirley.com
 
 
References:
The National Autism Project, 2017 Report The Autism Dividend: Reaping the Rewards of Better Investment (http://nationalautismproject.org.uk/the-autism-dividend)
Let It Go. Memoir of Dame Stephanie Shirley. Pub. Penguin (2019) ISBN 978-0241395493
The Shirley Foundation 1996-2016 - Twenty Years of Grant Making │Autism and Information Technology: An Overview of the Foundation’s Impact. Pub. Aperio Group (Europe) Ltd
 
 
 
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