The Fair Share Trust - an historical perspective

Executive Summary

This narrative is the result of an interview with Chris Anderson, who was the Programme Manager for Fair Share at the former New Opportunities Fund (NOF), for the first four years of the programme’s development until his departure in June 2005. The interview sought to clarify some of the principles and practice upon which the Fair Share Trust programme was based, and to place the programme in the context of the wider Fair Share initiative and of the Big Lottery Fund’s overall programme. Crucial to the delivery of this innovative new funding model is the role of Community Foundation Network (CFN) as trustee of the Fair Share Trust. The interview touches on the development of the programme’s approach, the problems it was designed to address, and the means adopted by CFN to address them. In June 2001, the secretary of State for Culture, Media and Sport Tessa Jowell announced the Fair Share initiative, the overarching aim of which was, “to ensure that a larger share of total lottery funding is received in the ‘Fair Share areas’ and that a sustainable impact is made on the lives of disadvantaged people in these areas.” As part of the initiative, the former NOF developed with CFN the concept of the Fair Share Trust, a £50m expendable endowment fund to be distributed to disadvantaged areas deemed to have received less than their fair share of lottery funding. In view of its experience of investing funds for community benefit, and its growing network of grant-giving members with good working knowledge of the communities in which they were based, CFN was invited to work in partnership with NOF to develop the programme, to manage and to deliver it.

How does the Fair Share Trust programme relate to the 2001 Fair Share launch?

The headline aspects of the Fair Share programme, including the Fair Share Trust, were determined in 2001 and set out in the Minister’s announcement. The Department for Culture Media and Sport (DCMS) emphasised the need for communities to be involved in shaping projects and for decision making to be devolved to local level. The primary focus of the programme matches those of the 2001 announcement, and ideas were developed from that starting point. Local endowments: The Fair Share Trust specifically addresses the lack of successful Lottery funding applications from the areas identified in the wider initiative by the provision of an expendable endowment for 70 of the 77 Fair Share areas. NOF’s research showed that organisations and individuals from disadvantaged areas were less likely to a) make applications for Lottery funds and b) be successful in their applications. Amongst major factors contributing to this were that:

applicants were put off by their perception of the bureaucracy involved, believing they would require specialist knowledge in order to apply successfully
residents in disadvantaged areas had become cynical about regeneration funding, due to unfulfilled past promises

As a NOF initiative, rather than emanating from the DCMS, the creation of local endowments demonstrates a concrete commitment to the community and guarantees ongoing support for local projects. In addition, by the commitment of expendable endowments assigned to local areas for expenditure over ten years, CFN also worked with NOF to develop processes to allow the operational control to be devolved to local organisations who had a vested interest in the projects’ success and the ability to support and assist applicants in the projects’ delivery. CFN also worked with NOF to develop processes allowing the local communities to “own” the strategy for spending the funding, including the Priority Document process, which requires the involvement of local people in setting local priorities, informed by the Local Strategic Partnership’s analysis of the area’s general needs.

What policy directions informed the development of the Fair Share Trust programme?

Social Capital and Liveability: The primacy of social capital and liveability as outcomes derives from NOF’s use of the wider definition of social capital. The narrow definition of social capital equates it with social enterprise, i.e. activities which produce jobs and money for the community, which may in turn tend to create community capacity. The wider definition includes building factors within a community such as skills, imagination and the ability to address that community’s needs. This is community capacity. The Fair Share Trust was designed to identify, harness and target the ability to address local needs. The ideal of sustainability is embodied in the outcome of communities developing the capability to find solutions to their own problems.

What is meant by the ‘outcomes-directed’ approach of the programme?

The emphasis is on outcomes rather than outputs. Fair Share Trust is about process rather than specific projects. Only in this way can the importance of learning from unsuccessful projects be retained. Measurability can arise as an issue with an outcome-directed approach but, in the context of the Fair Share Trust, outcomes may be measured in terms of the numbers of successful lottery applications ensuing from the community and the need for revenue support in the future.

What were NOF’s priorities for the delivery of the Fair Share Trust programme?

The aim was to create local, expendable endowments; to fund projects developed ‘by and for’ communities, as per the 2001 announcement that communities must be involved in shaping projects and that decision-making should be devolved to local level. Ideally, NOF would have liked to see an individual Fair Share Trust set up for each area but such a strategy would have been an unwieldy and inefficient way of building endowment. Community Foundation Network and NOF worked together to develop the processes that would make these priorities achievable. There was a clear desire on NOF’s part to avoid stipulating preferred kinds of projects in the Trust Deed itself, and thus to allow the greatest autonomy and freedom of movement at the local level and the greatest opportunities for learning and the development of community capacity.

Can you explain the funding allocation between Countries?

Fund allocations per country were made in the standard way used by the major Lottery distributors at that time (the Community Fund and the NOF), which reflected the demographic texture of the nation. General financial directions stipulated a percentage breakdown based on demographics but tempered by the various difficulties inherent in delivering the same programme in the respective countries. The People’s Network was a prime example of the system’s flexibility, where it proved far more costly and difficult to introduce free internet access in public libraries in remote areas of Wales and Scotland compared with inner city areas, although the demographics relating to population numbers and levels of deprivation alone would not allow for this.

Is there a bias against capital projects?

The majority of Fair Share Trust programme activity was not expected to be capital. NOF wanted communities to value Fair Share Trust money for its support of ongoing projects and particularly wanted to avoid the creation of ‘white elephants’ – expensive capital projects which would later become a drain on the public purse, or lie empty for lack of funds to carry them on. At the start of the programme, the perception was that it was relatively easy for the voluntary sector to receive capital funding. Furthermore, capital projects are arguably less effective means of building social capital. Whereas pure ‘liveability’ outcomes may be produced by capital projects, social capital is more readily built through revenue spend, and the support of long-term initiatives. Moreover, whereas capital funding tends to generate the need for revenue support, guaranteed revenue funding can be leveraged and may make capital funds much easier to achieve from other funding sources. Ten year revenue funding makes it possible for the recipient community to demonstrate the means to support a substantial capital investment. While capital funds tend to use up all the money in year two, the Fair Share Trust makes long-term investments in the community with the emphasis on sustainability.

What are the critical differences between the Fair Share Trust and a ‘normal’ grant award?

The course of the programme is entirely externally determined and the Lottery has no right of intervention or recall of its money. The Fair Share Trust thus has complete independence from government or lottery control.
The Fair Share Trust programme enshrines the principle of grant making at the local level.
An endowment programme of ten years’ duration means that the money is demonstrably committed to the Fair Share areas. No Lottery programme has ever had such a long time frame (SRB programmes are the nearest at five to six years).
The Fair Share Trust creates expendable endowments, giving communities the use of the capital of the fund, as well as the proceeds of the investment.

What is to stop BIG from changing its approach to the Fair Share Trust and, for example, becoming more interventionist?

The terms of the Trust Deed, by which the Lottery relinquishes all claim on the fund to the trustee (Community Foundation Network).
The Charity Commission, which can be called upon to intercede if the Lottery should place undue pressure on CFN.
The only way that BIG could overturn CFN’s control of the Trust is if CFN was in serious breach of the terms of the Deed.

It was important to have sufficient flexibility in the Trust Deed that the deed itself could not become an obstacle. No outputs were specified from the programme, and there is no facility for the Lottery to reclaim the money from the Trustee.

What is the significance of CFN’s Local Panel model?

The idea of Local Panels developed after CFN was appointed and was the result of a series of discussions concerned with developing operationally manageable processes that would allow the programme’s aims to be realised. The panels create an interface between the Fair Share Trust Local Agents and the communities they serve. Local Panels are a mechanism whereby stakeholders can get involved in the engagement of existing resources. They help to manage local power relationships, ensuring that community representatives have a majority. Lastly, they provide a double layer of protection; the Panel advises, but does not dictate and the Local Agency retains its authority.

Describe the relationship between BIG and CFN

CFN was appointed trustee because after extensive consultation, it was judged to be by far the best placed agency to deliver the Fair Share Trust programme in the UK. This was because of its network of local organisations with good working knowledge of the communities in which they were based and the people who live and work there, the agencies, companies and organisations which serve them. As trustee, CFN agreed to work closely with BIG but this is management by consent. For the early stages of the programme at least, quarterly contract meetings allow CFN to reassure BIG that the terms of the Trust Deed are being observed, but once again it should be noted that CFN is the trustee, and that the Big BIG retains no effective grant management function. The quarterly framework also allows BIG to place Fair Share Trust within the context of its overall funding programme, in terms of its distribution of funds to different areas and types of project. By years five to ten, it is anticipated that BIG’s role will be significantly reduced, and that the quarterly meetings will become less frequent, or effectively discontinue, depending on the staff and resources which the Lottery is able to commit.

Does the Fair Share Trust reflect the future of local funding?

The Fair Share Trust is a new and innovative funding model and as such, provides a testing ground for future programmes seeking to make an impact in local communities throughout the UK. It is also a ten year programme, designed to make a lasting impact on the communities it serves and to support long-term projects, which cannot by their nature be effectively judged two years into their delivery. The outcome-directed approach of the Fair Share Trust makes it difficult to quantify its success in conventional terms. To some extent, BIG can only judge the programme’s success by whether it manages to expend £50million pounds in that time frame. For these reasons, it is not possible to predict the outcome of this unique programme. In the meantime, the BIG is committed to exploring the principles on which the Fair Share Trust is based, and may yet launch more programmes of this nature.