Esmee Fairbairn Foundation - Annual Report 2010

ANNUAL REPORT & ACCOUNTS 2010

Contents 02 04 05 06 08 12 14 17 18 36 45 46 47 49 50 51 52 63 64

Looking back, looking forward The three ages Round the kitchen table Early professionalisation The sale of M&G and beyond A positive impact Key Statistics Grant-making Overview Main Fund Other Funds Chairman’s Statement Financial Review Investment Review Governance Statement of Trustees’ responsibilities Independent auditors’ report Accounts Trustees, committees, staff and advisers Our history

Esmée Fairbairn Foundation aims to improve the quality of life for people and communities in the UK both now and in the future. We do this by supporting organisations that work in the arts, education and learning, the environment, and that enable disadvantaged people to participate fully in society.

The Foundation is one of the largest independent foundations in the UK. We make grants in the region of £25 – £30 million per annum. Our funds are generated by our investment portfolio.

We aim to achieve a total return of RPI + 4% on a rolling five year average.

Additionally we operate a Finance Fund (£21 million) which invests in activities that aim to deliver both a financial return and a social benefit.

1961 –2011

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Looking back, looking forward The Foundation celebrates its fiftieth birthday in 2011 and in subsequent pages we tell a little of the story of our first half century. Inevitably this gives us cause to reflect on the thread of history that links the Foundation’s past, present and future.

The scale of the Foundation today was probably not something that Ian Fairbairn envisaged in 1961 when he founded it, and just as we have changed and developed over this period so has the world we operate in. Speculating as to where the Foundation or indeed the UK may be in the next fifty years is no doubt an idle pursuit, but the thread that links the last half century with the next is that of the values and approach that have evolved as the Foundation has grown and will, we hope, continue to guide us as we move forward. I hope that the following pages give some flavour of that ‘essence of Esmée’.

Whilst there have been many changes in the external world in 2010, for the Foundation it has been very much business as usual. It was the final year of our three year plan and we took some time to review how we’ve done and what we might want to change for the coming three years. In essence, the message is one of evolution rather than revolution. We have decided that our Main Fund, through which the majority of our grant-making is channelled, offers us the flexibility to combine both responsive grant-making and, on a selective basis, some more strategic interventions. These could be the result of our own thinking or be a response to ideas that others have brought to us.

Our Food Strand continues for the present, as does our programme with The Henry Smith Charity to build civil society leadership in Northern Ireland, and our funding of museum

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collections will continue through our partnership with the Museums Association. Whilst the Biodiversity and New Approaches to Learning strands have closed we continue to fund in both the environment and education, and are spending some time in early 2011 reflecting on how best we can direct our funding in these important areas.

It has also been a busy year in terms of activity. It’s particularly pleasing that our Main Fund grant spending this year increased to £21.5 million (up £2.2 million from the year before), and that we have been able to participate in a number of social investment funds and projects via the Finance Fund (of which more on pages 12-13). On the investment front it has also been a year of greater stability and growth in the markets with the endowment ending the year valued at £872.1 million (a total return of 10.2% for the year). Behind this number sits a considerable level of activity and re-positioning within our asset allocation, portfolio, and operations from which we hope to reap further benefits in the coming years.

We have of course been acutely aware of the changes around us, perhaps the most significant of which has been the change of government after thirteen years and the creation of the UK’s first coalition government since the Second World War. We are beginning to see the impact of public expenditure cuts on the sectors and organisations that we have supported over the years,

ideas in a timely fashion, recognising that it may sometimes be better to spend less when times are good so that we have more to spend when Alongside these concerns however times are hard. We are mindful of are some reasons to be cheerful: the need to balance the demands of the public debate around community engagement that the Big Society has today with those of future generations, whilst also considering the medium triggered plays to the core values of the Foundation and we were pleased and long-term prospects for our to have been able to contribute to this investment portfolio. As ever, the national conversation in various arenas cornerstone of our decision-making is a judgement about how we can be during 2010. The social investment most effective. sphere, which we have been and in light of this we are mindful of how our funding can support a sustainable ecology.

More broadly, it seems that those three building blocks of twentieth century Britain: market, government, and civil society, with relatively clear delineations between them, may blur and in some cases merge, leading a charitable funder such as the Foundation to consider whether there will be more occasions when charitable purpose (or social good) is achieved without recourse to a charitable structure.

This could be one of the most complex These are all issues that are very much on the horizon now, but what of issues for funders such as ourselves the longer term? Whilst it is impossible to grapple with in the future.

How will we navigate these waters? to conjecture too far ahead, one or Essentially by holding true to our two interesting issues are beginning history and our values: focusing on to nudge their way to the front of the the long-term, our independence, our agenda. Behind the government’s interest in the difficult and the tricky, green paper is the desire for and in the ideas and passion we find philanthropic giving to increase.

For long term foundations like Esmée, at the grassroots, as well as the larger our ability to spend over the long-term policy framework, always engaging with the curious, the counter-intuitive is dependent on our investment performance over time and our ability or the idiosyncratic. to maintain the real value of our Dawn Austwick assets. We also aim to smooth our Chief Executive spending over a number of years such that we can respond to need and good pioneering for some years, seems to have taken on a new dynamism.

There is an increased interest in philanthropy and charitable giving with the publication of the NCVO’s Funding Commission report, and at the very end of the year a government green paper on giving, and the launch at our Kings Place office of an independent review of philanthropy led by Thomas Hughes-Hallett.

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The three ages It is possible that when our successors pen the centenary piece in 50 years’ time they will talk about the Foundation in terms of ‘before and after’ (the sale of M&G). However, for those of us for whom this is recent history, the Foundation’s first 50 years can be divided into three ages: the very early days when Ian Fairbairn’s influence was at its most profound; a period of rapid growth and development in the 1980s and 1990s; and then the acceleration of change over the final decade following the sale of M&G in 1999.

Ian Fairbairn was born in 1896 at the very end of the Victorian era.

Wounded in the First World War, he came from a privileged background but was troubled by the inequalities in society that he saw at first hand when standing as a parliamentary candidate for Burnley in the 1920s. He came to believe that one of the causes of inequality was what people did with their savings: those who could buy shares could benefit from the growth of companies and the economy more generally, rather than simply gaining income from interest.

our history in brief

This thinking reflected his belief in the power of enterprise to create opportunity and wealth for all. In a highly successful professional life in the City, he led the development of the first unit trusts in the UK which for the first time offered access to professional investment management to people who lacked the contacts (and funds) needed for investment in stocks and shares.

He married Esmée Stobart in 1941 but their happy alliance was cut short in 1944 when she was killed in an air raid.

1961: Esmée Fairbairn Charitable Trust set up

by Stephen Ian Fairbairn, widower of Esmée, on 20 January

1962: First ever grant awarded of £3,000 to Cambridge University Department of Applied Economics

Like Ian, Esmée was a remarkable person with a strong social conscience, who was involved in the development of the Citizens Advice Bureaux and the WRVS. Their commitment to self-help, belief in opportunity and enterprise coupled with Ian’s highly principled and idiosyncratic approach, can still be seen in the way the Foundation operates today – a little bit quirky, backing people on the ground, supporting ideas that might create structural change, and reinforcing the best of British culture and society.

1966: Grant to London Graduate School of Business Studies (now London Business School) £52,500 plus £3,500 per year for ten years to fund the Esmée Fairbairn Chair of Finance

1968: Ian Fairbairn died on 5 December, aged 72

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Round the kitchen table The Esmée Fairbairn Charitable Trust, as it was originally known, was established on 20 January 1961 with an endowment of shares in M&G Group plc to the value of about £70,000 (less than £1 million in today’s currency). Ian’s initial intention was two-fold: to protect M&G from hostile takeover, and to raise the level of people’s financial understanding. However, the founding trust deed was broadly drafted, to allow for the funding of any charitable activity approved by Trustees.

The first Trustees in addition to Ian Fairbairn were Esmée’s two sons from her first marriage, Paul and Oliver Stobart, and George Booth, Ian’s predecessor as M&G Chairman and a former Director of the Bank of England. They were quickly joined by Harold Wincott, doyen of financial journalists, and GPS Macpherson, a senior merchant banker, John Fairbairn, Ian’s nephew joining the Board in 1966, with Denys Oppe, M&G Deputy Chairman. Meetings tended to take place in Ian’s flat in Chelsea, often over dinner.

John Fairbairn Trustee 1966–2008 and Chairman 1988–2003 Birth of a foundation The birth of the Esmée Fairbairn Charitable Trust (the Foundation’s original name) was celebrated at a memorable dinner in Ian Fairbairn’s Chelsea flat in early 1961. The guests were his fellow founding Trustees, Esmée’s sons Paul and Oliver Stobart, and George Booth, a man of great distinction who was Ian Fairbairn’s predecessor as M&G’s chairman; and I was lucky enough also to attend.

The atmosphere was one of excitement and celebration because the new trust had been endowed with a controlling interest in the M&G unit trust group’s parent company. This safeguarded M&G from takeover at some future time by people who might not be prepared to uphold the rigid principles that Ian Fairbairn had laid down for the protection of its unit trust investors and for the proper management of the business.

There was further cause for celebration. First, the creation of a new vehicle for philanthropy, that was in fact to channel more than £400 million over the next fifty years into the arts, education, heritage projects, conservation of the environment and social welfare. And secondly it would provide a fitting memorial to the remarkable life of Ian’s wife Esmée, who tragically had been killed in a 1944 air raid.

At their first formal meeting, the Trustees agreed “to consider financing university fellowships in the field of investment matters”. They saw a need to heighten public understanding of basic economic principles, as exemplified by the distinguished economic journalist Harold Wincott in his famous weekly “Dad and Son” articles in the Financial Times. Over the years this led to the establishment of Esmée Fairbairn Chairs and Fellowships at the London Business School and many of Britain’s leading universities. It also led to the appointment of Harold Wincott and GPS Macpherson, a senior merchant banker, as additional Trustees.

Trustee meetings in those early days took place in Ian Fairbairn’s flat. As M&G’s business prospered, the scale and breadth of the Foundation’s grant-making started to grow rapidly.

In 1968 Ian Fairbairn died. The chairmanship of the Foundation passed to Harold Wincott, but he survived only a few months and was succeeded by ‘Phil’ Macpherson. In due course Esmée’s son Paul Stobart took on the role, to be followed by Denys Oppe (who succeeded Ian Fairbairn as M&G’s chairman), myself, Jeremy Hardie and Tom Chandos.

Ian Fairbairn died a contented man. By the time of his death the two acorns that he had nurtured and planted, M&G and Esmée Fairbairn Foundation, were well on their way to becoming mighty oak trees.

1978 Giving since inception exceeded £1million 1969: G.P.S Macpherson becomes Chairman

1971: First environment grant to King’s College London of £30,000 over seven years towards a Fellowship in Environmental Studies

1972: First arts grant to Sadler’s Wells Trust for £200

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Before his death in 1968 Ian indicated to Paul Stobart that he would be happy for the Foundation to broaden the scope of its funding, In those first years the Foundation’s annual income was between £5,000 recognising that the asset base of the Foundation was growing rapidly. and £10,000. The early focus was In the 1970s the range of grants on ‘the promotion of economic widened to include the environment enlightenment’ and research and and the arts and heritage. It was teaching in finance and investment. during this period that the phrase The Foundation’s early beneficiaries were universities, but grants were also ‘a free and stable society’ was first made to social welfare organisations, documented as an aspiration of the including WRVS and to Sutton CAB, Foundation. Over the ensuing years, it has remained with us in one form reflecting Esmée’s own interests. or another.

Links with M&G also remained close, with a crossover between Foundation Trustees and M&G Directors.

Michele Giddens Executive Director, Bridges Ventures When innovation meets foundation For almost ten years, Bridges Ventures has been raising capital for social investment. When we first approached Esmée Fairbairn about a potential investment, the answer was immediate: “You said the word social in front of investment. We either invest for financial returns or we give grants to make social impact. It would be easier if you approached us for a grant”.

A number of years later, we came back, pleased with ourselves because we had a grant request, to help seed our Social Entrepreneurs Fund. Again, quick feedback but this time: “We are creating an allocation dedicated to social investment, so we would prefer to invest rather than making a grant!”

This is what it is like working with a Foundation that responds to new ideas, acts quickly and experiments with solutions. You can find yourself ahead of them one day and behind the next! The result though, is a Foundation that experiments, learns from the results and, as a result, is now a clear leader in social investment.

Early professionalisation The Foundation appointed its first (part-time) Director in 1980. Edgar Palamountain had served as a Trustee of the Foundation from 1968 and had been M&G’s Managing Director so he knew the Foundation well. His appointment coincided with the move to an office on Fleet Street.

At this stage the Foundation was making a couple of hundred grants each year. By 1990 the level of funding had increased from around £1 million per year at the beginning of the 1980s to £5 million.

The Foundation also began to categorise its grant-making in the early 1980s with an allocation of 40% to education and 20% each to the arts, social welfare and general purposes (generally split between research and conservation).

Allocations were also made for individual Trustees to spend on charitable causes of which they had special knowledge but which might not fit within the main areas of grant-making. This echoed an idea first expressed by Ian in the 1960s, and the tradition continues to this day.

1982 Foundation made its 1,000th grant 1979: Paul Stobart, son of Esmée, became Chairman

1980: The Trust moved to its first office at 10 Fleet Street and appointed its first Director, Edgar Palamountain

1984: Denys Oppe becomes Chairman

1984: The Trustees decided to set aside £50,000 per year to support conservation of the environment

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Jeremy Hardie Trustee 1970–2008 and Chairman 2003–2007 In the old days In the old days, the purely financial and investment side of Esmée Fairbairn Foundation’s life was very simple. We had a dividend cheque every six months from M&G which, having met our very low office expenses, we spent on grants. Somebody kept a cash book, and that was that. No Investment Committee, no worries about the success of our portfolio. A blissfully quiet life.

This calm life was only disturbed twice. First there was the drama when M&G was going through a sticky patch and might go out of business. The solution was for the Foundation to sell part of its shareholding to the then merchant bank Kleinworts, who would then guarantee M&G’s operations and thereby reassure the Bank of England that all was safe. The sale involved a great deal of late-night negotiations, posturing about price, and all the usual performance

Sir Robert Andrew took over the reins as Director in 1989 by which time the Foundation had a staff of two and had moved to Storey’s Gate. Income had grown to £4–5 million, and over the next five years it was to double again to £10 million. Trusts and foundations had by now become a recognised source of funding for the expanding charitable sector. By the 1990s Esmée was receiving several thousand applications each year. The Foundation recognised this more public role in 1989 by publishing its first Annual

associated with a City deal. Ashley Down took the lead, and managed a very skilful process, with me as number two, and Barings as advisors.

The second occasion was dealing with the ultimately successful bid by the Prudential for our holding in M&G, which was key to unlocking a successful purchase of the whole company by them. This time the negotiation was led by John Fairbairn, with William Rees-Mogg and myself lending support. The final meeting lasted well into the night, as is required on such occasions to show that every effort has been made to get the best price, the fairest terms, and of course a good fee for the advisors. The Pru offer had come from a very respectable source. This mattered to Trustees (who were bound, not by the Trust deed, but by respect for Ian Fairbairn’s admirable motives in setting up the charity, not to sell to just any City slicker). Secondly, the offer set a price which was evidently well up at the top of the range. So after some more posturing, mostly by me, we said yes.

That is the story of the Trustees’ modest role as City wheeler-dealers.

Report. By 1993 the Trustees’ policy was to divide grants between arts and heritage, education, environment, social welfare and research.

Margaret Hyde took over as Director in 1994. The Trustee base was also widened as time went by. During the 1990s the number of applications and grants continued to grow, with a corresponding increase in the executive team, including the appointment of a Finance Director (Ron Clarke). A number of expert

advisers were also brought in to help the Foundation assess applications and the first professional Grants Manager was appointed in 1998.

Margaret Hyde led the Foundation for eleven years until Dawn Austwick took over as Chief Executive in 2005.

1987 Giving since inception exceeded

£10m 1988: John S Fairbairn (nephew of Ian Fairbairn) became Chairman

1989: Sir Robert Andrew becomes Director

1990: Began funding in specific sectors: arts, education, environment and social welfare

1992: First million pound grant, awarded to Heriot-Watt University towards the Esmée Fairbairn Research Centre, which later became the Edinburgh Business School

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The sale of M&G and beyond

Hugh Raven Adviser since 1999 Meetings with Trustees I hadn’t been an Environment Adviser at Esmée Fairbairn for long, when I excused myself to contest the general election. As expected, I didn’t win. On resuming my duties, foot-sore and several pounds lighter following the hustings, I thought meetings with Trustees felt curiously familiar – a good measure of argy-bargy, and sometimes starkly divergent political views.

Strange though it may sound, that showed the best of a Foundation like Esmée. There may be controversy and dispute about how to get there, but we are all after very much the same outcomes in the end.

Fiona Halton Director, Pilotlight From a grant-holder 2001: I had just started at Pilotlight. I remember walking along the Embankment in London to my meeting at Esmée Fairbairn trying to think through a new way to give skills to charities recruiting senior business people in teams – but with no skills givers yet involved and no charities for them to help. A stern but enthusiastic Margaret Hyde (then Director) turned out to have run a skills giving organisation. She sent me away with a twinkle in her eye and agreed to keep funding my salary.

2009: Over 200 Pilotlight skills-givers working with over fifty charities in London and Edinburgh but none in Wales. I walk along the Strand to my meeting worrying about how to explain why we want to take Pilotlight to Wales. There is no concentration of big businesses there to recruit our members from. But there is a queue of charities. Dawn Austwick, Margaret’s successor, has just come from Wales and workshops. She listens and sends me away inspired.

2011: We now have six charities in Wales and also growing numbers of skills-givers.

Many Happy Returns, Esmée.

Over the years the steady and rapid growth of Esmée Fairbairn’s grant-making had been financed by comparable growth in dividends from the Foundation’s 33% shareholding in M&G Group plc, which represented about 90% of the Foundation’s assets. This lack of diversification and reliance on one single investment caused growing concern at the Charity Commission and with some commentators, but the Trustees argued that this source of income was in fact highly diversified. M&G’s revenue was derived exclusively from management fees and sales charges from the various funds which included a multitude of different companies operating in a wide range of industries and countries.

The Trustees were reluctant to diversify, because M&G was a very rewarding investment (and they were also mindful of Ian Fairbairn’s wish that they would continue to protect M&G from falling into the wrong hands). In the event, of course, the highly reputable Prudential Assurance Company offered to

1998 Giving since inception exceeded

£100m

1994: Margaret Hyde becomes Director

1999: M&G is sold to the Prudential for which the Foundation receives £625m

2000: Grant to Soil Association of £450,000

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teams expert in particular areas of interest. During this final decade of the Foundation’s first half-century, grant-making has been a blend of responding to the requests and ideas The sale of M&G to the Prudential of those who approach us and the changed everything. Overnight, the Foundation became a different entity: development of specific initiatives to address specific issues that we not only did it have more money with which to make grants, but it also had a have identified. considerable sum from which to build Esmée Fairbairn has also become a an investment portfolio. The relatively more active grant-maker – offering support and paying for advice to straightforward operating model of enable selected grant-holders to grow dividend payments supporting grant-making was a thing of the past. and develop. The move to new offices in Kings Place in 2009 enabled the Now the Foundation not only had to Foundation to convene events and decide how to spend its money, but host more meetings for grant-holders, also how to make it! This involved setting up an Investment Committee, our peer group and others. under the successful Chairmanship The Foundation also began to pioneer of Lord Rees-Mogg. an approach that seeks social return take the company over at a price of £25 a share, compared with the then market price of £17 a share.

The Foundation accepted the offer.

It was during this period that the Foundation moved once more, this time to a late Victorian town house in Park Place.

It also had more money with which to make grants. The increased grants budget coincided with a general move towards professional grant-making in trusts and foundations and Esmée was at the vanguard of this movement with the creation of grant-making

2000: Grant to Community Foundation Network of £1 million towards the Time for Growth programme to expand the work of community foundations

through investment, leading to the creation of the Finance Fund in 2008.

Characteristically, the objectives of the Fund were as much to test out and demonstrate how this embryonic market might work as they were to make individual social investments.

The Foundation’s first decade as an active investor has not been without incident – dot com booms, credit crunches, the growth of emerging

2001: Launch of Rethinking Crime and Punishment programme exploring alternatives to prison

Professor Paul Ekins Professor of Energy and Environment Policy, UCL Energy Institute, University College London Progressive ideas into the mainstream of debate I know Esmée’s Finance Fund Manager, Danyal Sattar, from way back, specifically from when we worked together in the 1980s on The Other Economic Summit (TOES). It was while talking with him about various matters vaguely related to ‘new economic’ thinking that the idea of the Green Fiscal Commission (GFC) was born.

Esmée Fairbairn funded the project after a feasibility study indicated that it had a chance of being influential and in 2007 GFC became a fully fledged body drawing together politicians, academics and industry leaders to explore green taxes and map out how they could be implemented. Its final report was published late in 2009 and in 2010 after the General Election the two then opposition MPs we had recruited to GFC became Secretary of State for Energy and Climate Change and Minister for Climate Change, while the Coalition Government committed itself to implementing a green tax shift. Esmée Fairbairn’s help in getting progressive ideas into the mainstream of debate is invaluable.

2003: Jeremy Hardie becomes Chairman

2004: Foundation initial funding for The Primary Review, the most comprehensive enquiry into English primary education for forty years

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markets, are just a few of the storms and challenges that the Foundation’s Investment Committee, advisers, and executive have had to weather. Ten years on, and despite all this, the real value of the endowment has been maintained whilst the Foundation has been able to spend at the target rate of 4% of endowment value after inflation.

Over these fifty years, the Foundation has made 19,258 grants to the value of £407,267,987, a far cry from those early discussions around Ian’s dinner table, but an indication of the Foundation’s ability to re-invent itself over time.

Sharon Shea Grants Manager since 1998 I’d rather be a Grants Manager than a footballer I know nothing about football but suspect most footballers know little about grant-making. In my 12-years at Esmée though, my colleagues have hunched around the TV for four World Cups. This has got me thinking.

Back in 1998, the England team and Esmée were in fairly similar places. Both teams were match fit, confident in their ability and gearing up for success. The Esmée team standing at, wait for it, 11.

We successfully pulled off the sale of our holding in M&G, the growth in our endowment propelling us into the Premier League. England, eliminated in the second round.

By 2002 some of Esmée’s longest standing players had retired, having made their mark.

New, enthusiastic and nifty-footed players were ready to take their place. Our annual grant-making had risen from £14.79 million in 1998 to £25.7 million. The England team progressed to the quarter finals, but no further. Surely 2006 would be different, better?

It would for Esmée but not for the footballers. Whisper it. The quarter finals again, but no further. Excellent progress here, with grants made totalling £27.3 million.

2010 will definitely be better for England. Wayne Rooney, golden boy, declared fit to play.

Hopes at an all time high. An unspeakably dire performance and plenty of recriminations.

At the Foundation, we have held on to our manager and relocated to a new home ‘ground’.

A little bit of reshuffling here and there producing a solid team and our best performance ever with funding reaching £30.8 million.

Undeniably, there has been fighting in the dressing room, some rolling around on the pitch, in ‘agony’, the odd own goal here and there. The ‘magic sponge’ has been administered from time to time and a 23-strong squad means that some time spent on the bench is a given.

But when I compare us to the England team, I’m pleased to say that we are playing a sophisticated, dare I say it, more beautiful game.

Yes, I’d much rather be a Grants Manager than a footballer.

2005: Dawn Austwick 2006: Grant of over £1 million to becomes Chief Executive the Museums Association for the Effective Collections programme

2007: Tom Chandos becomes Chairman

2008: The Finance Fund launched to provide non-grant finance

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1961–2010

£407,267,987 Total grant-making

19,258 No. of grants

Esmée Fairbairn Foundation Trustees since 1961 Stephen Ian Fairbairn (1961–1968); Paul Stobart (1961–1992); Oliver Stobart (1961–1984); George Macaulay Booth (1961–1967); G.P.S. Macpherson (1963–1981); Harold Wincott (1963–1969); John S. Fairbairn (1966–2008); Edgar Palamountain (1968 –1980, 1988–1990); Denys Oppe (1968–1990); General Sir John Hackett (1968–1996); Jeremy Hardie (1970–2008); Ashley Down (1976–2008); Lord Rees-Mogg (1981–2003); Penelope Hughes-Hallett (1982–2002); Andrew Tuckey (1986–1999); Baroness Linklater (1990–); Sir Antony Acland (1991–2005); Martin Lane Fox (1992–2008); William Sieghart (1998–); Felicity Fairbairn (1998–); Rod Kent (2001–2006); Kate Lampard (2001–); Beverley Blaize (2003–2006); Andrew Graham (2003–2005); Tom Chandos (2004–); James Hughes-Hallett (2005–); Thomas Hughes-Hallett (2008–); Beatrice Hollond (2009–); Sir David Bell (2011–); John H. M. Fairbairn (2011–); Sir Jonathan Phillips (2011–).

2009: The Foundation moves to new premises in King’s Cross

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Overview The clearest measure of the public benefit that we create can be found in the grants listed in this report, setting out who we have supported this year and our level of funding.

With all our grants, however, we are also interested in finding out how our funding has contributed to meeting our overall aim. That is to improve the quality of life for people and communities in the UK. Sometimes ideas and approaches develop over a number of years.

This year, for example, we made significant long-term commitments to the development of emerging theatre practice at the Bristol Old Vic, The National Theatre Wales and the National Theatre of Scotland.

A positive impact Focus on social investment Perhaps the area where we have seen most progress in terms of our own priorities this year, has been in the field of social investment. The Foundation first looked at social investment several years ago, offering funding to Charity Bank and Venturesome. Three years ago we increased our commitment to this area by setting up the Finance Fund.

Our intentions were to demonstrate that this form of investment can be effective, to help to create a social investment market, and hence to draw other potential investors into it.

This has been a significant year in terms of demonstrating the range of potential instruments available for investment. We have been early investors in the Social Impact Bond, as well as in intermediary funds such as, the Bridges Sustainable Property Fund. We have made direct investments in charities such as SCOPE, Global Action Plan and Live Theatre and are now developing a small number of direct interventions of our own which relate closely to our core areas of grant-making.

Conservation Land Purchase Fund This Fund is for the Royal Society for the Protection of Birds, The Wildlife Trusts and Woodland Trust. Usually when these charities want to buy a piece of land, they have time to raise funds from their supporters.

Sometimes, however, the seller wants a quick sale and they have to move fast. The Foundation agreed a facility with these three large conservation organisations to purchase land on their behalf, and hold it while they raise funds to buy it. They have two years to do so. If they cannot raise the money, we sell the land back on the open market.

So far, we have made two such purchases, for Sheffield Wildlife Trust at Greno Woods near Sheffield and the Woodland Trust in Dumbarton for just under ÂŁ1 million in total. It is a trust based facility. We trust them to get the assessment of the conservation value of the land right and they trust us to hold it for them, until they can buy it.

As the model becomes proven, we may be able to extend it to other conservation bodies.

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We would not have developed this model of funding had we not been working in this way with the Battersea Arts Centre over several years. Likewise a small grant to Bikeworks three years ago helped them get up and running. They are now a highly successful social enterprise turning over several hundred thousand pounds, re-cycling dozens of bikes each week, and employing formerly homeless people in their workshops.

On an entirely different front, there have been some signs of a more mature public debate around illegal drug policy. This has been the objective of the UK Drugs Policy Commission (now in its second phase of funding from the Foundation) which has been working away behind the scenes with researchers, policy makers, opinion formers and the media to ensure there is a more informed and thoughtful conversation around the choices we face in getting to grips with this most intractable of issues.

Global Action Plan Global Action Plan provides advice and services to reduce the environmental impact of business.

Three years ago, the Foundation invested in pump priming some of Global Action Plan’s income-generating services.

In the end, only a proportion of our investment offer was drawn as they were able to fund the growth from their own income.

However, knowing the funds were available was instrumental in giving them confidence.

We also look to provide additional value to our sectors through our Grants Plus work and through the use of our meetings rooms, and our convening capacity. All of these areas have developed in 2010 and we intend to increase these activities further in 2011. In particular we have used our Grants Plus programme to provide expert advice to some of our grantees as they seek to increase their own impact through raising their public profile and getting their message across more effectively.

After a successful growth phase, they came back for a new investment. This time, we invested £300,000, alongside our co-investors from the earlier round, Venturesome.

What we liked about this investment was the way it demonstrated a charity looking ahead. Global Action Plan identified well in advance the risks of grant funding not being renewed and planned how to replace it through a range of income-generating activities.

They turned grant funded programmes into products they could contract and sell to businesses and local authorities.

Venturesome and Esmée Fairbairn are sharing risk and reward with Global Action Plan by taking a small share of the new income streams. If their income-generation ideas fail, we lose our money completely. But if they do well, our return is a good one, sharing their success. It is a good way for the Foundation to use the strength of its balance sheet to support innovation.

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Key Statistics 2010 In 2010 we spent £32,811,000 (2009: £30,791,000)* * The figure includes grant spending, Finance Fund drawn-down, and administration costs (£2,004,000)

Main Fund Strands Finance Fund Other Funding

00 0,0 ,00 £3

0 £1,231,00

Our funding 2010

£ 5,037 ,000

Total number of grants and Finance Fund investments made by the Foundation: 2010

440

£2 1,5 39 ,00 0

15

Size of Foundation endowment: Year ended 2010

£872 million Year ended 2009: £816 million

Breakdown of funding Value (£’000) Main Fund Arts, culture, heritage Citizenship or community development Education Environment Human rights, conflict resolution Prevention or relief of poverty Other charitable purposes Main Fund total

2010 %

Number

2008–2010 Value % Number (£’000)

5,081 5,742 2,392 3,053 2,294 2,042 935 21,539

24 26 11 14 11 10 4

66 78 32 33 23 27 11 270

13,251 14,337 7,147 9,269 5,509 4,446 4,147 58,106

23 25 12 16 9 8 7

210 211 110 119 67 71 35 823

Strands Biodiversity strand Food strand Museum and Heritage Collections strand New Approaches to Learning strand Strands total

1,480 924 1,011 1,622 5,037

29 18 20 33

17 14 17 20 68

2,850 2,497 2,409 4,275 12,031

24 21 20 35

36 42 46 63 187

Development Fund Finance Fund (drawn-down) Finance Fund (Grants) TASK grants Grants Plus

471 3,000 0 705 55

11 71 0 17 1

3 12 0 87 n/a

854 7,525 400 2,414 484

7 65 3 21 4

8 20 3 280 n/a

440

81,814

Total

30,807

1,321

16

Key Statistics 2010 continued

Main Fund: spend by country and English regions Geography International (inc UK) UK – wide

Grants (£) 727,200 5,815,458

More than one UK Country

488,665

More than one English Region

664,962

England – wide

Main Fund: spend per capita (pence) England – wide

21

Northern Ireland

23

Scotland 35 Wales 38 UK – wide

10

3,775,491

Wales 1,146,400 Scotland 1,842,703 Northern Ireland

413,954

35

English regions North East

314,504

North West

598,177

Yorkshire

1,029,947

East Midlands

208,302

West Midlands

632,985

Eastern 224,247 London 1,900,024 South East

587,032

South West

1,168,417

23

9

12

Total 21,538,468

38

20

12 22

5

7

4 25

17

Grant-making Overview Esmée Fairbairn Foundation aims to improve the quality of life throughout the UK. It does this by funding the charitable activities of organisations that have the ideas and ability to achieve change for the better. During 2010 the Foundation committed over £30.8 million towards a wide range of work.

Funding is channeled through two routes:

Other funds We also allocate funds to specific areas of work. These will change over time, but overall they express our desire to make a contribution in particular areas of interest. More information about these is on page 36.

Main Fund Our Main Fund distributes the majority of our funding. It is responsive to shifts in demand, supporting work that focuses on the arts, education and learning, the environment and enabling people who are disadvantaged to participate fully in society. In our Finance Fund we are exploring We are particularly interested in supporting the opportunities for alternatives to work through the Main Fund that: grant finance, building on our previous loans programme.

• Addresses a significant gap in provision • Develops or strengthens good practice • Challenges convention or takes a risk in order to address a difficult issue • Tests out new ideas or practices • Takes an enterprising approach to achieving its aims • Sets out to influence policy or change behaviour more widely.

A small Development Fund investigates new ideas and approaches, such as testing ideas for possible future funding areas.

We also have a Trustees’ Areas of Special Knowledge (TASK) Fund to support organisations known to individual Trustees.

18

Main Fund Grants Average Main Fund grant 2010

£79,774 Breakdown of Main Fund spend by category in 2010 (£’000s) Other charitable purposes (935)

Arts, culture, heritage (5,081)

Prevention or relief of poverty (2,042) Human rights, conflict resolution (2,294)

2010

Environment (3,053) Citizenship or community development (5,742) Education (2,392)

Main Fund applications and grants 2010

2,330

357

270

Invited to second stage

Grants approved

Main Fund applications

Arts, culture, heritage

Main Fund Grants

19

Inspire at St. Peter’s Ltd £50,000

Towards the salary of the 2Inspire community centre manager over two years.

Artichoke Trust £60,000 Towards research and development costs over two years for future live events in public spaces.

Birmingham Repertory Theatre Ltd £160,000 Towards the community outreach programme, delivered in collaboration with Birmingham City Library Service over two years.

Artsdepot £90,000 Border Crossings Towards the salary of a part-time arts administrator over three years, £75,000 Towards salaries over three years. including the costs of developing the artistic programme.

Brighton Early Music Festival £65,000 Association of Towards the development of a Independent Museums training scheme for emerging £266,000 early music ensembles over Towards the continuation of the three years.

Sustainability Grants Scheme, and a contribution to core costs Bristol Old Vic Trust Ltd over three years. £500,000 Bamboozle Theatre Company Towards a programme to nurture and support emerging £48,495 theatre artists over five years.

Towards a tour of multi-sensory interactive drama to children with Bungay Arts & learning difficulties.

Theatre Society £30,000 Battersea Arts Centre Towards consolidation of £90,000 income generation activities Towards a programme of over two years. production support for emerging companies over three years.

City of Birmingham Museums & Art Gallery Big Brum Theatre-in£100,000 Education Company Ltd Towards the ‘Home of Metal’ and £56,690 ‘Network’, two new contemporary Towards a programme over three exhibitions. years of theatre-in-education training for teachers and students Civic Voice and an expansion of company£120,000 based work experience Towards transition funding over placements. three years.

Big Telly Theatre Company Cockpit Arts £30,000 £10,000 Towards Spring Chickens Two Towards the costs of an evaluation arts programme over two years. of the Business Growth Loan Scheme.

Colchester and Ipswich Museum Service £40,880 Towards Out in the Open project costs which will explore perceptions of homelessness in Colchester.

Coventry Arts and Heritage Trust £80,000 Towards the costs of the museum and art gallery based outreach programme for excluded young people from Coventry over two years.

Dimensions £10,120 Towards the costs of developing three short theatre productions about autism and learning difficulties, with people who have these conditions, to help develop their skills and to increase public understanding of these disabilities.

Eureka! The National Children’s Museum £155,749 Towards the Helping Hands project, to benefit users of the museum that have a disability and their families over three years.

Hull Truck Theatre Company Ltd £31,000 Towards the cost of an inclusion dance/drama practitioner to work with people with a disability over two years.

Ilkley Literature Festival £40,000 Towards the involvement of rural and urban young writers’ groups and other youth art forms in the Stanza Stones project over two years.

20

Main Grants List

Arts, culture, heritage continued...

Independent Cinema Office £57,375 Towards salaries to facilitate long term development of training schemes and best practice for independent film exhibitors over three years.

Index on Censorship £15,000 Towards the core costs of the Artistic Expression and Self Censorship Programme.

Kingston Theatre Trust £75,000

Towards the costs of the artistic programme over one year.

London Sinfonietta £90,000 Towards the costs of the Culture Lab programme over three years.

Magpie Dance £45,000 Towards core costs over two years, a new training programme and a feasibility study to create a new performance company.

MED Theatre £75,000 Towards core costs over three years.

Monteverdi Choir & Orchestra Ltd £34,307 Towards the costs of the Monteverdi Apprenticeship over two years.

Museums Association £70,000 Towards the research, development and administration of a new fund to support collections care, documentation and research.

National Galleries of Scotland £61,000 Towards digital interpretation at the Scottish National Portrait Gallery.

Supporting emerging theatre practice The Foundation has looked to support the long-term health of the theatre sector through a number of targeted grants to key organisations. These have enabled established theatres to support emerging theatre practice. The Battersea Arts Centre (BAC) has been nurturing emerging artists since its inception in 1980 and now has an artists’ network with around 400 members. The Foundation has been funding this work since 2002 with grants totalling £225,000. One particularly successful element of the scheme is ‘scratch evenings’ where artists share work in development with audiences, encouraging debate about the qualities of the work. This model offers BAC the opportunity to invest skills, resources and experience into a mutually beneficial collaboration, which could build a new coterie of theatre companies and artists; develop skills and experience; establish company infrastructures and resources and develop an audience base for the work of these artists.

A further three grants provide similar opportunities for emerging theatre artists in Scotland, Wales and the South West.

Each has specific ways of working with emerging artists which suit each organisation’s expertise, skills and the community of artists.

The success of Battersea Arts Centre in its work supporting theatre practice illustrates how key producers and venues can reach artists directly and efficiently.

Established venues and organisations can work with emerging artists and companies to develop relationships, provide appropriate training and support and take successful ideas through to realisation as full productions.

The Bristol Old Vic (£500,000) programme, Ferment, aims to leave a significant legacy within the artistic community of the South West and embed emerging artists within the organisation. It will provide ongoing support and mentoring, creating networks and collaborations.

The National Theatre of Scotland (£221,218) will work with two Scottish arts organisations to develop opportunities for residencies, mentoring, ‘work in progress’ performances, festival performances and the development of full productions.

The goal of the National Theatre Wales (£483,115) programme is to create a new model for the development of theatre artists, involving local communities across Wales and online communities to stimulate new ideas and new ways of working. The programme will provide long-term support and space for the development of ideas in traditional theatre spaces, unusual venues and sites, and in a variety of styles and traditions.

21

Rambert Dance Company Ltd £151,770

Towards the Choreographic Development Programme over three years.

Shakespeare Globe Trust £25,000 Towards a project to help the development of the enhanced Globe site.

Siobhan Davies Dance Company £60,000 Towards the cost of new programmes of work and events over two years.

Solar Bear Ltd £75,000 Towards the salaries of the artistic director, general manager and workshop leaders over three years.

Sound Affairs £60,000 Towards the administration costs over three years.

Spacex Gallery £40,000 Towards staff salary and a contribution towards outreach project costs.

Stage2 Youth Theatre Company £10,000 Towards core costs over two years for work with disadvantaged young people.

Stepping Out Theatre £66,277 Towards the salary and costs over three years of a deputy coordinator to work on a programme of workshops and theatre productions in the community as well as a medium secure psychiatric unit.

Orchestras Live £75,000 Towards the salary of a partnership The Bluebell Railway Trust £26,000 manager over three years.

Towards the cost of specialist Red Note Ensemble Ltd National Theatre Wales restoration skills in converting a £60,000 £483,115 Victorian railway carriage for use Towards core costs of the artistic Towards a programme of by visitors that have disabilities programme over three years. development for emerging or mobility problems. theatre artists and companies Scottish Churches The British Museum over five years.

Architectural Heritage Trust £15,000 £30,000 Nautical Museums Trust Ltd Towards work to develop a Towards core administration £30,000 national strategy for sharing Towards the salary of a community costs over two years. expertise in the museum sector. development officer over three Sense Scotland The British Museum years. £52,584 £124,091 Towards the performing arts Oily Cart Company Ltd Towards costs over three years tutor’s salary and production £90,000 for a national programme of costs over three years.

Towards the costs of a theatre projects in regional museums. programme over three years for Seven Doors The Bronte Society young people with profound and £24,588 £48,694 multiple learning difficulties.

Towards the cost of the Working Towards the salary of the arts a Dream project to benefit looked officer and programming costs after children. over three years.

National Theatre of Scotland £221,218 Towards the Artistic Development Programme over three years.

Royal Shakespeare Company £60,500

Towards the initial costs of the Open Stages Programme, a collaboration between amateur and professional theatre.

Textile Conservation Centre Foundation £70,100 Towards the costs of transition management and the moving of physical assets to the University of Glasgow.

Main Grants List

Arts, culture, heritage continued...

The Clore Leadership Programme £20,000 Towards the costs of a symposium.

The Georgian Theatre Royal £70,000 Towards core costs over three years.

The Kendal Brewery Arts Centre Trust Ltd £12,998 Towards the cost of a young carers art project.

The Little Sparta Trust £78,000 Towards planning and staff training over three years to secure the future of the garden.

The National Trust £63,575 Towards the salary of community officer at Seaton Delaval Hall in Blyth over three years.

The Opera Group £110,000 Towards the cost over three years of a new social engagement and audience development initiative.

The Pier Arts Centre £15,000 Towards core and exhibition costs.

Triangle Arts Trust £20,000 Towards a programme of exhibitions, education and outreach work and events over two years.

Turtle Key Arts £10,000 Towards the costs of a new production by RedCape Theatre Company.

Valley and Vale Community Arts £72,030 Towards the salary of a senior development officer over three years.

Welsh National Opera £33,863 Towards the cost of the education and outreach programme.

West Yorkshire Playhouse £45,000 Towards the running costs over three years of the new facility for young people, First Floor.

Total £5,081,019 No. grants 66

Citizenship or community development

22

Community Links £17,500

Towards the costs of the feasibility and development phase of a project to increase understanding of the role of one to one relationships in meeting people’s needs.

38 Degrees £74,882 Towards salaries, volunteer expenses and office costs over two years.

CADISPA Trust £120,000 Towards core costs over three years for their work with rural community groups.

Ashiana Network £75,000 Towards the salary and costs of the housing services manager over three years.

Calderdale District CAB £5,000 Towards the consultancy fees related to preparing a feasibility report on a proposed employee assistance enterprise.

Benwell Young People’s Development Group £30,000 Towards core costs over three years to enable the organisation to support local young people.

Blackburn with Darwen Churches Action £20,000 Towards core costs over two years.

Blackburne House Group £74,944 Towards the cost of establishing a women’s maintenance social enterprise, which will work closely with local housing associations, providing training opportunities and earned income.

Centre for Responsible Credit £25,875 Towards the costs of delivering three seminars on issues related to credit regulation policy and lending practice.

Charities Advisory Trust £75,000 Towards the salary and running costs of a ‘Knit for Peace’ officer over two years to bring different communities together.

Children Our Ultimate Investment UK £280,000 Towards the recruitment and salary of a director of fundraising over four years.

Blackthorn Trust £139,626 Towards the pilot Sustainable Futures which will support the mentally ill through social enterprise activity over two years.

Christ Church Armley Youth Project £55,372 Towards core posts and the running costs over three years.

Bridport Arts Centre £31,800 Towards staff salary and creative outreach project costs over three years.

Circo Kernow £50,000 Towards the project costs of the accredited circus skills programme over two years.

CAADA £180,000 Towards the salary over three years of the director of insights.

CLINKS £150,000 Towards core costs over three years.

23

Dance United £210,000

Towards the salaries and costs over three years of the management team to take forward their model of practice that offers contemporary dance training for marginalised young people.

Community Music Wales £30,000 Towards core costs over two years.

CPO Media £37,566 Towards core costs over two years.

Deaf Connections £75,000 Towards the salary of an online development trainer and travel costs over three years.

Development Trusts Association £60,807 Towards the cost of working towards a merger with BASSAC. Dfuse Citizen Training £35,000 Towards the salary and costs of the programme and development director over two years.

Eaves Housing for Women £155,871 Towards the salary of the family, reunification and support worker costs over three years.

Family Rights Group £300,000 Towards core costs over three years for work with families of looked after children.

Fight For Peace £134,007 Towards the salary of an institutional relations manager over three years.

FolesHillfield Vision Ltd £37,620 Towards the salary and associated costs of a volunteer co-ordinator and a contribution to organisational overheads over two years.

Ford Park Community Group £40,000 Towards the salary and costs of the volunteer development manager over two years.

Forward Thinking £123,100 Towards the salary of a fundraiser and board development over two years.

Foyer Federation £20,000 Towards the cost of developing a new approach to reduce re-offending through the education and development of young people aged 10–17 who would otherwise be in custody.

Global Giving UK £52,200 Towards the costs of a UK project co-ordinator over two years.

Greenwich Citizen Advocacy Project £104,050 Towards the salary of the advocacy development worker over two years.

Halton Carers Centre £67,753 Towards the salary of the young carers’ transitional worker salary and associated project costs over two years.

Headingley Development Trust Ltd £109,267 Towards core staff to develop the HEART Centre over three years.

Holsworthy Community Property Trust £5,000 Towards core costs.

Into Change £8,000 Towards core costs to help this community centre to continue moving towards self-sustainability.

Just Change UK £45,000 Towards the salary of a part time worker to strengthen this community based trading initiative and test and refine the model of economic and social change over two years.

24

Main Grants List

Citizenship or Community development continued...

Kurdistan and Middle Eastern Women’s Organisation Ltd £40,000 Towards the Women’s Upskilling project, including the salary of a part-time co-ordinator and trainer costs over two years.

London Rebuilding Society £15,000 Towards the costs of research and report production for a blueprint for a UK version of the Community Reinvestment Act. London Youth Support Trust £115,000 Towards the salary of the fundraising manager and core costs over three years.

Low Luckens Organic Resource Centre £19,107 Towards the costs of the Wellbeing in the Environment project which will provide environmental and volunteering opportunities for adults with a mental health problem or learning disability.

Lyme Regis Development Trust Ltd £25,000 Towards the salary of the Chief Executive.

Mind in Camden £120,000 Towards the salaries of the paranoia group development worker and group assistant over three years.

Musicians without Borders £10,000 Towards the costs of creative music sessions for refugees and asylum seekers especially victims of torture.

Oasis Community Debt Advice Centre £28,675 Towards a residential programme giving support to women exiting prostitution, over two years.

Object £25,000 Towards core costs and consultancy costs involved in conducting a comprehensive strategic review over two years.

Old Goole Industrial & Provident Society £19,086 Towards a new member of staff for the community cafe over two years.

Sports Leaders UK One Church 100 Uses £75,000 £97,280 Towards the salary of the Towards the salary of the foundation manager for information co-ordinator over the West Midlands over two years to enable them to three years, to help churches develop their redundant or reach more disadvantaged young people. underused buildings while seeking sustainable solutions to providing emotional support and Riverside Community community problems. guidance to carers supporting Market Association Paddington someone with a substance misuse £39,750 Development Trust problem.

Towards the salary of the food £120,000 programme manager over two See the Difference Towards the salary of the deputy years. £89,000 chief executive over three years.

Rosemount Lifelong Learning Towards the salary and costs for Pant and Dowlais Boys two producers to provide training £75,000 and Girls Club and mentoring of small and Towards the costs of the asset £64,818 medium charities outside London based community development Towards the costs of the Engine to enable them to make use of project over three years.

House’s outreach service over the See the Difference Royal Association for three years. fundraising website.

Disability & Rehabilitation Participation and the Sheila McKechnie (RADAR) Practice of Rights Project Foundation £38,000 £63,186 £25,000 Towards support costs over two Towards the salaries of the Towards a programme of small years that allows people with strategic development officer grants to support grass roots learning difficulties and poor and strategic policy officer over campaigners. mental health to participate two years to deliver a programme effectively in a national leadership Sheila McKechnie of work that will embed a human support programme.

Foundation rights based approach to £126,234 Safe Ground Ltd community development work Towards the costs of a national £75,000 in Northern Ireland. network of co-ordinators including Towards the salaries of the Personal Support Unit fees, management costs and chief executive and business £60,000 evaluation over three years. development director over Towards the salary and costs of two years.

St Giles Trust the director over three years. £135,000 Samuel Lithgow Project North East Towards the salary of the SOS Youth Centre £94,500 Gangs project team leader and £45,360 Towards the launch and Towards the salary of the assistant an evaluation over three years. implementation over two years of manager over two years.

The Baring Foundation GLOBE their e-learning platform. £2,000 Scarborough & Ryedale Quaker Social Action Towards consultancy fees for the Carers Resource £94,015 design of a sustainable business £79,381 Towards the salary of the manager Towards the salary of the support model for law centres and over three years to establish and specialist advice agencies. and information officer over two develop Down to Earth. years to develop carer support groups, and one-to-one sessions,

25

Supporting grass roots campaigners Many of the areas of mainstream activity in our society were initially influenced by the work of individuals and groups as grass roots campaigners. The Foundation has made a number of grants which recognise the importance of this contribution to civil society. One such grant is to the Sheila McKechnie Foundation (£25,000) to distribute small awards to support campaigners working at a small or local level.

These grants recognise that grass roots campaigners are often better placed to identify issues or injustices at an earlier stage than larger institutions. For example, David Watkins set up ‘A Day In Hand’ after suffering a homophobic attack. This campaign inspires and supports same-sex couples who want to hold hands in public and it provides a way of changing cultural perceptions of same-sex relationships by showing the everyday realities of lesbian, gay, bisexual and transgender lives. The campaign has drawn support from thousands of people worldwide and received celebrity endorsement.

The Foundation has supported others working in this field including Object

(total grants £43,000) for work that challenges the sexual objectification of women. Object has a membership of 200 volunteers who are actively involved in campaigns. Its work to date includes partnership with the Fawcett Society in lobbying successfully for a change in the law around the licensing of lap dancing clubs. As a result, clubs are now subject to tighter regulation exercised by local councils that can respond more effectively to the local community’s concerns.

Participation and the Practice of Rights Project (PPR) (£63,186) was set up by a coalition of bodies concerned with social justice issues across Northern Ireland. PPR works from the simple proposition that tangible change will only come about with the participation of local people in decisions that affect their lives and environment. Support to date includes communities working on improving housing conditions within seven tower blocks, increasing children’s access to play facilities and securing a place at the negotiation table for the £231 million regeneration of a former army barracks and prison.

The Centre for Mental Health £187,405 Towards a programme to improve outcomes for children with conduct problems over two years.

The Coalition for Libel Reform £13,430 Towards the production and dissemination of materials.

The Equality Trust £7,000 Towards the costs of developing a strategic communications plan.

The Keyfund Federation £74,338 Towards the salary of a licensee development manager over three years.

The Lucy Faithfull Foundation £72,000 Towards six additional ‘circles of support’ over three years for high risk sex offenders who are returned to the UK from abroad.

Trail-Blazers £137,170 Towards the salary and costs of a project support manager over three years to support mentoring co-ordinators based within youth offending institutes as the project expands.

Universal Comedy £62,500 Towards the salary of a part-time co-ordinator for self-referrers and programme delivery costs over two years.

Vita Nova £60,000 Towards the salary and costs of the co-ordinator over three years.

Voice UK £70,000 Towards the salary of the senior project manager over two years.

Wessex Reinvestment Trust £52,988 Towards a pilot project to enable the development of additional permanent sites for gypsy and traveller groups in Somerset.

West End Refugee Service £45,001 Towards the salary of the project director over three years.

Young Minds Trust £90,000 Towards core costs over three years.

Total £5,742,464 No. grants 78

Main Grants List

Education

26

English Folk Dance and Song Society £90,000

Towards the costs of the Education Programme and core costs over three years.

Alive and Kicking Theatre Company £17,085 Towards core costs and for the structural reorganisation.

Bethany Christian Trust £72,520 Towards the salary of the community education worker and activity costs over three years.

Chance UK £100,000 Towards the salary of the chief executive over three years.

City & Guilds of London Art School £35,000 Towards the salary of the deputy director.

ClearVision Project £45,000 Towards the salary of an administrator over three years and development costs for a lending library for children with visual impairment.

Communities Empowerment Network £93,385 Towards the salary of the reintegration officer and associated running costs over two years.

Crafts Council £96,117 Towards the costs over three years of a national project to improve ceramics education and facilities in schools.

Cued Speech Association UK £50,000 Towards the salary of the project development/fundraiser post including recruitment, training, travel and IT costs over two years.

Dandelion Time £75,000 Towards the salary of the senior project worker over three years.

Giant £54,916

Towards the salary of the artistic director and marketing costs over three years.

Into University £257,091 Towards the salaries of the director of operations and the senior fundraiser over three years.

27

Improving literacy

As part of its education work, the Foundation has an interest in literacy, supporting a number of organisations working in this field. The Shannon Trust received a grant (£35,000) for its Toe by Toe programme which trains literate prisoners to teach reading skills to fellow offenders who have poor reading skills. This way of learning is favoured by some prisoners as they do not have to engage with “the formal educational system” which they often feel has failed them in the past.

Kenya Women Association £36,966 Towards the cost of a part-time community business advisor and project running costs over 15 months to support BME women to develop their own micro-enterprises.

MAMA Youth Project £73,000 Towards the salary of the head of training, fundraising support, rent and other costs over three years for a programme to increase the employability of disadvantaged young people , particularly those from BME backgrounds within the media and other sectors.

Motorvations Project Ltd £43,393 Towards older sessional worker fees, management, training and overhead costs over three years for an intergenerational learning programme.

On Purpose £25,000 Towards the core costs of providing business and other support to charities and social enterprises.

Papplewick Pumping Station Trust £30,000 Towards the salary of an education development officer over two years.

Prisoners’ Education Trust £105,000 Towards the salaries of a strategic project manager, policy and communications officer and an administrator over three years.

Pupil Voice and Participation England £31,452 Towards promotion, research and staff costs.

Unitas (£161,240) targets weak rather than non readers. The programme focuses on behaviour change, motivating young people to read more, creating a virtuous circle: the more you read, the better you get at doing it. Volunteers who support the delivery of the programme are also trained in behaviour management in order to get the best out of their learners, many of whom have social and emotional difficulties.

Visually, our lips adopt the same position when making different sounds. Cued Speech is a simple system of hand signs that clarify which sound is being made.

It is very helpful for people with hearing problems and is comparatively easy to learn. The Cued Speech Association UK (£50,000) aims to improve the literacy and communication skills of deaf and hearingimpaired people by promoting and implementing the effective use of Cued Speech.

As part of its funding portfolio, the Foundation has been a supporter of the National Literacy Trust’s Talk To Your Baby campaign since its inception.

This encourages parents and early years workers to communicate more effectively with babies and pre-school children. The Foundation was also an early funder of the influential Every Child a Reader programme that focuses on children’s literacy.

Main Grants List

Unitas £161,240

Towards the salary of the project manager and project costs over three years to expand ‘TextNow’ a validated programme for raising literacy standards amongst 8–25 year olds into challenge schools, foster and residential care homes.

Education continued...

Saint Andrew’s Children’s Society £20,000 Towards the costs of research, analysis, material development and piloting of work to reduce the negative impact of attachment disorder issues on adopted/ fostered children’s learning and social life at school.

Stephen Spender Memorial Trust £17,500 Towards project costs for practical language and translation workshops.

Sunderland Women’s Centre £20,000 Towards core costs over two years to run a range of educational services including outreach and family learning classes.

The Piping Centre £60,000 Towards the salary of the band director and administrator and other core costs over three years.

The Prince’s Drawing School £65,000 Towards staffing costs over three years to expand the Visual Arts Mentoring Programme which matches the school’s postgraduates with talented children and young people.

The Shannon Trust £35,000 Towards the salary of the chief executive to tackle the problem of poor reading standards amongst prisoners.

Trellis £36,000 Towards training and awareness raising costs over three years to strengthen Scottish gardening projects working with disabled and disadvantaged people and to influence policy-makers.

University of Exeter £424,320 Towards project costs for the research on raising levels of achievement for pupils with moderate learning difficulties over two years.

We Step Together £25,500 Towards core costs over three years.

York Travellers Trust £30,000 The Alliance for Towards a women’s education Inclusive Education project over two years. £129,190 Towards management and project costs of the education programme Total £2,392,175 over three years.

The Fostering Network £37,500 Towards project costs to scope and develop social pedagogy in foster care in the UK.

Environment

28

No. grants 32

Cumbria Wildlife Trust £105,000

Towards the costs of the conservation advocacy work towards marine protected areas in the Irish Sea over three years.

Aviation Environment Federation £73,944 Towards core costs and to support the organisation’s programme to protect those affected by aircraft operations, and promote effective measures to manage aviation’s climate impact.

Carbon Leapfrog £60,000 Towards core support for early stage growth, providing pro-bono support to carbon reducing community projects from a wide range of professions in one integrated service over two years.

29

ClientEarth £465,000 Towards core costs over three years.

Community Energy Practitioners Forum £35,250 Towards the costs of research and report production to map community action on climate change with a focus on the links between process and outcome.

Community of Arran Seabed Trust (COAST) £150,000 Towards the costs of the ongoing marine protection work in Arran and the Clyde over three years.

East Somerset Railway £1,700 Towards the cost of work to further nature conservation knowledge and management at the railway.

Environmental Protection UK £110,800 Towards the costs over two years of the Car Tyre Noise Campaign.

Forest Stewardship Council £60,000 Towards core costs over three years.

Friends of the Earth Scotland £68,628 Towards the costs of an environmental justice campaign over 15 months.

Global Canopy Foundation £150,000 Towards the costs of surveys of forest footprint disclosure, helping companies understand their exposure to tropical deforestation.

Helford Marine Conservation Group £20,000 Towards the salary of the co-ordinator over three years.

Lincolnshire Wildlife Trust £20,621 Towards the salary of the environmental land management project officer associated with the Lincolnshire grazing marshes project.

30

Main Grants List

Supporting the marine environment

Support for marine-based work has been one of the single most significant areas of funding in recent years. Concern about the degradation of the UK’s seas and the adverse impact this has had on the life it supports, which has little or no protection, has led to the Foundation becoming one of the UK’s largest independent funders in this area. We take particular pride in our support of charities and not-for-profit groups, in funding work that helped lead to the enactment of the Marine and Coastal Access Act 2009 and related devolved legislation across the UK. The next phase of work the Foundation is supporting is around the implementation of the Marine Act and to ensure that it achieves what it should in conservation terms.

This takes the form of a number of key grants in this area, including support for Scottish Environment Link, Wales Environment Link, Wildlife and Countryside Link and Northern Ireland Marine Task Force (all of which are partnerships of key conservation organisations in each UK country) for further marine advocacy activity. There is also work to be done to ensure that with devolved legislation there is parity across the UK.

Environment continued...

Living Streets £110,322 Towards the costs over three years of the coalition co-ordinator and campaign costs to ensure that public space is made more accessible to pedestrians and other green modes of transport.

Northern Ireland Marine Task Force £170,768 Towards core members of staff, legal work and materials to support marine work over three years.

ORCA £195,000 Towards the salary of the director and the administration manager over three years.

Policy Studies Institute £39,845 Towards the costs of the green tax alliance, to build on the work of the Green Fiscal Commission.

Rothamsted Research £55,100 Towards the costs to produce an update on the ‘State of Britain’s Larger Moths’ report.

Sandbag Climate Campaign £75,000 Towards core staff costs over three years of a campaign around EU Emissions Trading Scheme.

Scottish Environment LINK £173,589 Towards core members of staff to support marine work over three years.

Shared Earth Trust £34,500 Towards project costs for Wildlife Where You Live over three years.

South East England Wildlife Trust £148,906 Towards establishing strong and coherent marine protected areas off the South East of England over three years.

The Centre for Innovation in Voluntary Action £38,770 Towards research and conference costs of the British Waterways Re-made Project.

Wales Environment Link £20,000 Towards advocacy work over two years.

Wales Environment Link £160,881 Towards core members of staff to support marine work over three years.

Watering Hole £20,000 Towards staff and core costs of this agency, bringing together the best minds in the advertising community to recreate climate change communication.

Wild Trout Trust £12,000 Towards the Trout in the Town project on the River Don in Sheffield.

Wildlife and Countryside Link £97,152 Towards a core member of staff to support marine work over three years.

Transition Network £75,000

Towards training and development costs over three years.

The Environment Trust for Richmond Upon Thames £30,000 Towards core posts in order to extend work into other West London boroughs over three years.

The Wildlife Trust for Birmingham and the Black Country £100,000 Towards a package of work to optimise opportunities for the Trust’s ongoing sustainability over three years.

Transition Town Totnes Ltd £75,000 Towards the costs of an energy descent plan co-ordinator over three years.

Yorkshire Wildlife Trust £100,000

Towards the costs of the marine advocacy manager over three years.

Total £3,052,776 No. grants 33

Human Rights/ conflict resolution

31 Active Change Foundation £31,000 Towards the salary of the chief executive and fundraising advice over two years.

Anti-Slavery International £72,493 Towards salaries and core costs of the Anti-Trafficking Monitoring Group over three years.

Belfast Interface Project £90,000 Towards the salary of the practice co-ordinator over three years to influence government policy regarding the regeneration of interface or ‘peace line’ areas, promote greater levels of sharing, address youth-led interface violence, and address membership needs.

Children’s Rights Alliance for England £64,125 Towards the costs of two policy programmes to strengthen respect for children’s human rights.

Circles UK £90,000 Towards salary and costs over three years of a project that works to safely reintegrate sex-offenders into the community post-prison, using the innovative ‘Circles’ model.

Faith in Older People £26,100 Towards the costs of training workshops, reporting, management and other associated project costs over three years.

Gloucestershire Domestic Violence Support & Advocacy Project £148,662 Towards core costs over three years, of a project supporting people who have been trafficked or groomed into prostitution.

Hull Lighthouse Project £59,471 Towards the salary of an outreach worker over three years to support sex workers in Hull.

Human Trafficking Foundation £200,000 Towards staffing and running costs over three years for a national campaign to promote Anti Slavery Day through a programme of activities.

Inside Time Ltd £120,000 Towards core costs over three years to establish a small unit to investigate and publicise cases considered to be miscarriages of justice.

32

Main Grants List

Human trafficking is a form of modern-day slavery involving the transportation of people, including children, away from the communities in which they live. In this country they may be coerced into prostitution or forced to work or marry against their will.

Frontline support services can help victims escape the grip of gang-masters and recover from the trauma they suffer.

Support organisations are important in raising public awareness of the issues involved and ensuring that the authorities do everything they should to prevent the practice and punish the perpetrators.

One organisation that the Foundation has supported that works in this challenging field is the newly-established Human Trafficking Foundation (£200,000) which lobbies for changes in policies aimed at reducing trafficking and increasing penalties for those responsible for it.

Similarly, Iranian and Kurdish Women’s Rights Organisation (£140,495) seeks improvements to policy, particularly around the issues of forced marriage. Women for Refugee Women (£50,000) challenges the institutional injustice faced by female asylum seekers, some of whom may have been trafficked and some who may be fleeing sexual exploitation.

Anti-slavery International (£72,493) monitors the UK government’s response to this issue and, like others working in the field, is committed to exposing the true scale of the problem.

Prison Radio Association £350,000

Towards core costs over four years to develop a national prison radio service.

Human rights / Conflict resolution continued...

Institute of Race Relations £60,000 Towards the salary of the news assistant and core costs over three years.

Iranian and Kurdish Women’s Rights Organisation £140,495 Towards the salary of the campaign officer and core costs over three years.

Just for Kids Law £78,649 Towards the salary and costs of the executive director, administrative support and related overheads over three years.

Kids £158,344 Towards the salary of the relationship and sexuality officer over three years.

North Kensington Law Centre £132,028 Towards the cost over two years of specialist legal support for migrant domestic workers who have been trafficked or abused by their employers.

Reprieve £120,000 Towards the salary of the communications manager over three years.

Respect £75,000 Towards the salary of the development director and core costs over three years.

South West Adult Placement Scheme £117,635 Towards a three year national demonstration project on the use of shared lives and adult placement for people with dementia.

Talkback-UK £30,000 Towards drama work at Talkback Diversity in Harrogate over two years.

The Police Foundation £14,750 Towards the costs of scoping the establishment of an Independent Commission of Inquiry into Policing.

UK Lesbian and Gay Immigration Group £65,000 Towards the salary of the chief executive over three years and to assist with business planning support.

Women for Refugee Women £50,000 Towards core costs over two years to carry out a study into the refusal of asylum to women seeking refuge in the UK.

Total £2,293,752 No. grants 23

Prevention or relief of poverty

33

Canopy Housing Project £120,000

Towards salaries and costs over three years for this self-help community led housing project contributing to the social, economic and environmental regeneration of inner city areas in Leeds.

African Community Advice North East £38,457 Towards the salary of the development director and project costs over three years.

Emmaus UK £150,000 Towards the salary of a mentoring co-ordinator and mentoring programme costs over three years.

Barton Hill Settlement £94,026 Towards the salary and costs of the development worker plus a contribution to the salaries of support staff responsible for co-ordination of resident groups over three years.

FareShare South West £70,452 Towards the salary of the operations manager over three years.

Blackpool Carers Centre £89,040 Towards the salary of the young carers’ family support worker over three years.

Greater Manchester Pay and Employment Rights Advice Service £143,335 Towards the salaries and costs of the Domestic Abuse: Women’s Employment Support Project over three years.

Circle £90,000 Towards the salary and on costs of the project manager over three years.

Hollybush Centre Ltd £60,000 Towards the salaries of the chief executive and part-time administrator over three years.

Demos Ltd £54,300 Towards a scoping study for a multi-dimensional measure of poverty.

Independent Age £56,101 Towards the salary of a service development assistant over two years to bring new services to isolated older people.

Depaul UK £72,000 Towards the salary of a regional manager over three years.

Innovate Trust £74,843 Towards the salary of a transitions officer over three years.

34

Main Grants List

MillRace IT Ltd £33,333

Towards the salary of a new business development manager to increase trading potential and related social programmes for this IT recycle/re-use social enterprise.

Prevention or relief of Poverty continued...

Norcare Ltd £50,000 Towards the support over two years of ex-service men and women.

Norfolk Rural Community Council £109,914 Towards the costs of the Rural Community Land Trusts Development Project over three years.

Northern Ireland Community of Refugees and Asylum Seekers £60,000 Towards core costs over three years.

Refocus £18,171 Towards the salary and training costs of a part-time volunteer co-ordinator.

Refugee Survival Trust £46,024 Towards the salary of a development worker and associated costs over two years.

Saheliya £69,536 Towards the salary of the co-ordinator and recruitment costs over three years.

SEARCH £40,000 Towards the salary of the development worker over three years, assisting the community work of churches in Hull.

St Mungo’s Community Housing Association Ltd £150,000 Towards the salary of the women’s strategy co-ordinator over three years to improve the support of women with complex needs.

The M.A.S.H Charity £55,500 Towards the salary and costs of the van driver post and a contribution to warehouse rental costs over three years.

The Men’s Room £16,000 Towards the salary of a part-time arts sessional worker over two years.

Toynbee Hall £124,000 Towards the salary of a director of business and enterprise over three years.

Women’s Work £71,988 Towards the salary of the chief executive over three years.

Yorkshire MESMAC £84,747 Towards the projects costs over three years for BLAST! which will specialise in providing prevention and protection to boys/young men involved in/at risk of sexual exploitation.

Total £2,041,767 No. grants 27

Barton Hill Settlement (BHS) provides services to the deprived neighbourhoods in East Bristol.

This long established settlement delivers a holistic range of projects covering family and parent support, drug and alcohol treatment, crèche facilities, volunteer engagement, basic skills and initiatives focused on elderly residents and teenagers. Programmes have included the Play Ranger scheme that has trained local parents as play work volunteers who maintain local parks as safe environments and the DINGS Young People’s project that has helped older teenagers into work. One project identified nearly one hundred elderly Somali women who rarely left the family home.

In response, a Muslim Women’s Lunch Club was established where younger Somali women volunteer to cook weekly meals for elderly members of their community.

We were impressed by the loyalty BHS inspired in the local community. Goodwill was clearly the result of BHS being in tune with the character and the needs of residents. Its imaginative services neither patronised nor discomforted its users but were wholly in keeping with what people wanted and needed. BHS is a beacon of best practice in how deprived and marginalised areas can be helped to build and maintain vibrant communities and a more skilled, confident population.

This is exemplified in the project we supported which will seek to replicate a successful local women’s network in ten other locations, in collaboration with two Children’s Centres.

Other Charitable Purposes

35

Deafblind UK £96,096

Towards the salary of the chief executive over three years.

Community Foundation in Wales £132,600 Towards the salaries of a development assistant and regional associates over three years.

Criminal Justice Alliance £50,000 Towards a campaign to reduce the prison population through the production and promotion of policy analysis, and work with the media over two years.

Disability Direct £57,819 Towards the salary of the IT technician associated with the Magic-T enterprise over two years.

Ethical Property Foundation £165,000 Towards core costs to increase the reach and sustainability of the Property Advice Service over the three years.

Fairshare Educational Foundation £60,000 Towards core costs over three years for this organisation’s work that addresses institutional investors when there is a failure to challenge companies that abuse human rights and the environment.

Marie Curie Cancer Care £40,000 Towards the costs of The Philanthropy Review – to take a fresh look at the role of giving in society.

Pro Bono Economics £35,000 Towards the salary and costs of the director.

Sibs £71,000 Towards costs of the Adult Sibling Project and core costs over three years.

SOBS £27,000 Towards the salary of the administrator and core costs.

Transform Drug Policy Foundation £200,000 Towards core costs over four years.

Total £934,515 No. grants 11

36

Other Funds In addition to the Main Fund, Esmée Fairbairn Foundation also allocates funds to specific areas of work.

These may change over time, but overall they express our desire to make a contribution in particular areas of interest. The Foundation also runs a Finance Fund that explores opportunities for alternatives to grant finance.

The Finance Fund aims to complement the Foundation’s grant-making with loans and other investments in charities and social enterprises, particularly in our areas of interest. By providing money in this way, the Foundation will share the risk and return of the investment. As part of the return on our investment, the Foundation hopes to help prove a new model for funding the sector: increasing capacity, building balance sheets and proving that our funding can be recycled.

Strands Food – aims to promote an understanding of the important role food plays in contributing to quality of life. It looks to support work that prioritises the enjoyment and experience of food. We seek to enable as many people in the UK as possible to access, prepare and eat nutritious, sustainable food.

Museum and Heritage Collections – focused on time-limited collections work including research, documentation and conservation that is outside the scope of an organisation’s core resources.

This programme will be replaced in early 2011 by the Esmée Fairbairn Collections Fund run by the Museums Association.

This new programme will support projects that include the research and conservation of collections and will lead to a better understanding and use of heritage collections.

Strands that closed in early 2011 Biodiversity – aimed to help develop a greater knowledge and understanding of certain habitats and their associated species, leading to practical conservation outcomes.

New Approaches to Learning – looked to fund work that supports devising, testing and disseminating new approaches to teaching and learning that address current and future challenges in state schools and pre-schools.

Strand funding in 2010 Strand Spend (£’000)

A

D

A Biodiversity strand B Food strand

1,480 924

CM useum and Heritage Collections 1,011 C

B

D New Approaches to Learning

1,622

Biodiversity

37

The tadpole shrimp may be the oldest living animal species on earth. Fossils show that it has survived virtually unchanged since the Triassic period. It is a freshwater crustacean, resembling a small (up to eight centimetres long) horseshoe crab. However, very little is known about the tadpole shrimp or about the habitat that it occupies.

Both the shrimp and its ephemeral pool habitat have declined greatly in Europe. Two tiny populations are known to occur in Britain – one is a single pond in the New Forest and the other at the Wildfowl & Wetland Trust’s Caerlaverock centre on the Solway Firth. The shrimp has an unusual life cycle.

They are hermaphrodite, and can hatch, mature and lay eggs within a few weeks when their pool fills with water. When the pool then dries out, the eggs may lie dormant in the sediment for many years, until the next time the water level rises.

The Foundation is supporting a research project (£49,253) into the tadpole shrimp which should result in more knowledge about this mysterious and ancient creature and the conditions on which its survival depends.

Cumbria Wildlife Trust £162,000 Towards the wetland restoration project over three years.

Desperate Men Ltd £13,000 Towards an educational and entertainment show to celebrate the international Year of Biodiversity.

Devon Wildlife Trust £5,601 Towards the costs of achieving a greater understanding of Devon’s sabellaria reefs.

Dorset Wildlife Trust £80,000 Towards the cost of habitat mapping, surveys and the work of marine volunteers to focus on intertidal habitats in Lyme and Poole Bays over three years.

Hampshire and Isle of Wight Wildlife Trust £48,334 Towards the Seagrass in the Solent project to survey and map nationally scarce seagrass plants over two years.

Macaulay Land Use Research Institute £100,940 Towards research costs into Machair Grassland conservation in Western Scotland and the Islands.

Staffordshire Wildlife Trust £31,000 Towards river headwater catchment surveying and improvement works in Staffordshire over two years.

Sussex Wildlife Trust £42,335 Towards the costs over two years for surveying and wetland restoration works in Sussex.

The Avon Wildlife Trust £190,000 Towards the cost of the North Somerset Wetland Programme over three years.

The Royal Botanic Garden Edinburgh £102,352 Towards research, conservation and to further public understanding of lichen over three years.

The Wildlife Conservation Research Unit £111,000 Towards research of the Ditches in the Upper Thames Project over two years to ascertain the extent to which they are stores and centres of biodiversity.

University of Swansea £145,823 Towards research costs over three years into jellyfish populations and lifecycles in the Irish Sea.

Other Funds

Biodiversity continued...

University of Exeter £117,307 Towards costs to examine the bioprotection value of plants and species on rocks and man made intertidal structures and to make practical recommendations for their use over two years.

Food

38

University of Leeds, School of Geography £72,500 Towards the costs of a baseline survey of the aquatic biodiversity, chemistry and physical properties of natural and artificial pools found on upland peat bogs over two years.

University of Stirling £89,501 Towards research into genetic and species diversity in saltmarsh habitats and to influence restoration practice over three years.

Wildfowl & Wetlands Trust £49,253 Towards research into the tadpole shrimp and its habitat and conservation initiatives resulting from that work over three years.

Zoological Society of London £118,650 Towards research and public awareness and involvement in the work with the European Eel in the River Thames over three years.

Total £1,479,596 No. grants 17

The People’s Supermarket (£110,000) is a new social enterprise which aims to introduce a communityowned and managed mutual model of retail food enterprise in cities. It seeks to offer an ethical alternative to mainstream supermarkets, enabling community ownership, local sourcing of fresh produce and a wide range of other social benefits. The first People’s Supermarket opened at Lambs Conduit Street, a busy shopping street in Camden, London in May 2010.

A ten year lease on the premises has been agreed.

The supermarket has a small staff team who are supported by work experience placements and the volunteer members. It has recruited over 700 members since it has opened. Each member contributes £25 per year and works voluntarily for the enterprise for four hours each month. Whilst the shop is open to all, volunteering members receive at least a 10% discount on their purchases.

The co-operative movement has been running member-benefit retail outlets for over a hundred years.

However, The People’s Supermarket is a new take on the model in which members win a financial discount in exchange for volunteer time and the savings made on overheads, as well as keen management of waste, allow the supermarket to offer independent, local and ethically produced products at an affordable price. The aim is to prove that the food retail system can explicitly respond to issues such as social justice, development of local supply, community development and cohesion in ways that mainstream supermarket chains do not.

39

Krata £10,000

Towards ‘Cracking Food’, a food engagement programme in Manchester.

Community Food Initiatives North East £13,350 Towards a study to explore the potential of collective purchasing among Community Food Networks in Scotland and the establishment of a purchasing social enterprise.

Gateshead Food Co-op CiC £69,000 Towards the costs of a mobile fresh food service and to support the organisation towards financial sustainability over two years.

Manchester International Festival £120,000 Towards the costs of the Vertical Farm project in Wythenshawe over three years.

NVA £150,000 Towards the costs of the Sow and Grow Everywhere communitydevelopment programme over three years.

School Food Matters £93,000 Towards core costs over two years to champion sustainable food sourcing among state schools in London.

Soil Association £96,722 Towards the salary of a project officer to promote and support the wider uptake of Food For Life catering mark over two years.

Sustainable Restaurant Association £76,680 Towards the costs of an additional account manager to enable the expansion of the organisation.

The People’s Supermarket £110,000 Towards the recruitment and salary of a general manager to establish this first urban based community owned supermarket.

University of Surrey £4,050 Towards the costs of improving the structure and searchability of the Food Climate Research Network’s database and website.

Incredible Edible Todmorden £10,100

Towards the costs of emulating the impact of this community food project and the creation of a toolkit for use by others.

World Development Movement £56,887 Towards the cost of representing the civil society voice in EU Parliament debates and decisions concerning the regulation of commodity trading.

Zest – Health for Life £46,093 Towards the costs over two years for the establishment of four additional fresh fruit and vegetable outlets in food deserts in east Leeds.

WWF-UK £68,290 Towards a campaign that raises the level of debate and aims to reduce the environmental and social impact of high meat and dairy consumption in the UK over two years.

Total £924,172 No. grants 14

Other Funds

Museum and Heritage Collections

40

Bexley Heritage Trust £50,000 Towards the costs to conserve and digitise the Boswell Collection of Victorian Lantern Slides and develop an online picture library.

Cardiff University £90,000 Towards the salary of a collection cataloguing librarian over three years.

Chichester Cathedral Restoration and Development Trust £50,000 Towards the costs of stabilising and investigating four 16th century wooden panel paintings.

Crafts Study Centre £35,000 Towards the costs of the conservation of the Bernard Leach archive over two years.

Glasgow Print Studio £20,000 Towards the research and development costs of the archive collection over two years.

Museums Sheffield £88,650 Towards the costs of a project over two years to re-store, document and research the collections of work on paper.

National Portrait Gallery £97,629 Towards the technical analysis costs over two years of a project investigating portraiture in the Elizabethan and Jacobean periods.

Oban War and Peace Museum £9,000 Towards the salary of the documentation officer.

Pitt Rivers Museum £91,410 Towards the costs to develop a methodology and management system for adding images in a variety of formats to a digital database over two years.

Scott Polar Research Institute £28,000 Towards the salary of a documentation assistant.

SS Great Britain Trust £87,000 Towards the salary of the curator of library and archive and two documentation assistants to work on the collections for the Brunel Institute over two years.

The National Portrait Gallery’s (£97,629) collection of Tudor and Jacobean paintings is the largest public collection of its type. During the last three years the NPG has undertaken technical analysis of 70 portraits dating from 1500 to 1570. This has resulted in re-dating, new categories of authorship, improved knowledge of materials and a better understanding of artistic practice of the time. The Foundation made a grant to support the technical analysis research into the Elizabethan and Jacobean periods using a variety of techniques (infrared, paint analysis, x-rays, ultra violet, pigment sampling) to examine dating, condition, patterns and tracings, paint layers and alterations. The Gallery plans to disseminate the findings via web case studies, displays in the Tudor gallery, an international conference, a detailed online dataset and through publications.

Tate £80,000 Towards costs of seconding a senior conservator to research the conservation and preservation of 35mm slide art over eighteen months.

The Holburne Museum £86,826 Towards the conservation of objects from Sir William Holburne’s collection.

The Unst Heritage Trust £12,500 Towards a project to digitise the Museum’s collections over three years.

The Victoria & Albert Museum £100,000 Towards research, conservation and digitisation of the engraved ornament prints collection over two years.

Torquay Museum £55,225 Towards the salaries of two documentation assistants and a contribution to project management to document the geology and palaeontology collections.

Warwickshire Museum £30,000 Towards the conservation and improved interpretation of the Sheldon Tapestry Map of Warwickshire over two years.

Total £1,011,240 No. grants 17

New Approaches to Learning

41

The recent huge increase in numbers of classroom support staff or Teaching Assistants (TAs) has had a profound impact on schools comprising nearly a quarter of the school workforce by 2010. Experience suggests that there is action needed to improve the training and deployment of TAs, and teachers who work with them, as there is evidence that some current methods of deploying TAs, e.g., supporting pupils in most need, have a negative impact on pupil academic achievement.

University of Bath £49,429 Towards project costs to research and pilot bilingual teaching in state primary schools.

The Foundation supported Professor Peter Blatchford from The Institute of Education (University of London) (£155,499), an organisation with an international reputation for education and social research, to run a two year project to work with 24 TAs and teacher pairs in twelve primary and secondary schools in two local authorities to improve the preparedness, deployment and practice of TAs and schools, and to then disseminate the findings and policy and practice guidance nationally.

University of Exeter £60,126 Towards project costs for the development of metacognition in primary RE teachers and pupils.

Canterbury Christ Church University College £74,490 Towards improving standards of nursery care for babies through improving professional development networks and dissemination of good practice over two years.

Institute of Education (University of London) £129,494 Towards project costs to research if an informal approach to instrumental teaching with greater emphasis on improvisation, aural and group work might motivate pupils who find classical notation off-putting.

Institute of Education (University of London) £28,000 Towards the costs of producing a review of reviews that will explore a number of reports, identifying policy messages common to all, with a view to reinforcing them at a time of political change.

Institute of Education (University of London) £155,499 Towards project costs over two years to develop school-based strategies for effective teacher assistant deployment and communication.

National Literacy Trust £186,191 Towards improving the writing skills of children through developing and disseminating new approaches to assessment over two years.

Scottish Schools Equipment Research Centre £85,250 Towards project costs to explore ways of enhancing ethical discussion and science and RE in Secondary Schools over two years.

Sound and Music £58,828 Towards project costs to investigate new approaches to musical composition in schools over two years.

St Mary’s University College, Belfast £78,305 Towards a Key Stage 3 pilot integrating art and science over two years.

Sussex University £148,080 Towards research costs to investigate the impact of mixed achievement groups in mathematics, understand the conditions for their success, and provide evidence for teachers.

The Poetry Society £54,570 Towards project costs over two years to develop and deliver tailored poetry sessions in partnership with teacher training providers and poet-educators.

University of Aberdeen School of Education £47,586 Towards project costs to research inclusive pedagogy focusing on pupil voice and self-assessment and the implications for teacher professional learning over two years.

University of Cambridge £150,000 Towards the costs over two years of a network of schools to put the Cambridge Primary Review recommendations into practice.

University of Exeter £70,793 Towards project costs to establish the value and provide procedures for using a SEN practical teaching task in teacher training schools.

University of Glasgow £14,937 Towards project costs to develop the use of picture books to improve the language skills and social integration of young people from immigrant and refugee families.

University of Hull £58,477 Towards project costs to evaluate the impact of pupil managed field based ecology upon wider learning over two years.

University of Reading £70,004 Towards project costs over two years to investigate the current understanding and practice of modern foreign language teachers.

University of Strathclyde £24,000 Towards project costs to extend and evaluate a new approach towards supporting pupils experiencing social, emotional and behavioural difficulties over two years.

University of York £77,868 Towards researching and developing new approaches over two years to address issues of community cohesion in schools over two years.

Total £1,621,927 No. grants 20

Northern Ireland Development Programme – working with The Henry Smith Charity, the programme recognises the need to nurture civil society leadership in Northern Ireland as part of the peace process. Following an encouraging pilot year in 2008/9 there was a further funding round in 2010. We are also seeking to provide participating individuals with mentoring opportunities to help make it easier for them to build alliances across sector lines. In 2010 the Foundation’s contribution to the fund was £445,748. A list of awards made under the programme in 2010 is below: North West Play Resource Centre (The Playhouse) £280,600 Towards the salary of a finance director, the cost of 15 international artist residencies based in Northern Ireland and a contribution to core costs.

Northern Ireland Council for Voluntary Action £204,586 Towards the establishment of a new voluntary sector think-tank dedicated to strengthening the sector’s capacity to understand and influence macro-economic decision making in NI. Committee on the Administration of Justice £163,769 Towards the salary of a public affairs officer, a contribution to core costs and an events and publications budget.

ippr £15,000 Towards the costs of the first phase of a project to develop a new progressive economic policy framework.

The Henry Smith Charity £445,748 Towards the Northern Ireland Development Programme over four years.

The Performing Arts Labs Ltd £10,000 Towards the costs of the Movement and Meaning project.

Total £470,748 No. grants 3

The Junction £97,240 Towards the costs of a community based project to challenge ‘selective remembrance’ which shores up division, and introduces ethics into historical commemoration via ‘shared and ethical remembering’.

Voice of Young People in Care £145,302 Towards the establishment of VOYPIC as the central resource for statistics, research and policy on looked after children in Northern Ireland and to invest in communications work to counter stigma attached to looked after children within media and the public.

Total £891,497 No. grants 5

Finance Fund Investments

Other Funds

Development Fund Grants List

42

43 Investments – Drawn-down 2010 Bath Community Energy £20,000 Purchase of Industrial and Provident Society shares in a micro-hydro community energy scheme over five years.

Big Issue Invest £750,000 An investment in the Social Enterprise Fund over ten years.

Bridges Community Ventures Ltd £162,536 Towards Bridges Sustainable Property Fund over eight years.

Cockpit Arts £28,200 Towards the continued support of a loan scheme for micro-craft enterprises at Cockpit Arts.

East Lancs Moneyline £240,000 An investment in an eight year bond to finance the expansion of microcredit lending by ELM into South Wales.

Ethical Property Company Ltd £500,000 Purchase of shares to allow further growth of the Ethical Property Company, enabling it to provide office accommodation to more charities and social enterprises.

Global Action Plan £300,000 To purchase a revenue participation right, by investing in the development of new income streams, products and services to support the growth of the organisation over ten years.

Buzzbnk £75,000 A partnership share of Buzzbnk, to enable online crowd fundraising in charities and charitable purpose social enterprises.

Sheffield Wildlife Trust £515,000 To purchase Greno Woods.

Social Finance Ltd £300,000 A ten year loan to fund the core activities of this key financial intermediary.

Social Impact Partnership £107,292 The first part of a £1,000,000 commitment to the first Social Impact Bond at Peterborough Prison, enabling the rehabilitation of short sentence ex-offenders to reduce re-offending.

Of the 40,000 adults on short term prison sentences, around 60% will reoffend within a year. This has significant costs to society, the taxpayer and the individuals involved.

To try a new approach to dealing with this age-old issue, Social Finance launched the first Social Impact Bond. This £5 million partnership will support work in reducing re-offending at HM Prison Peterborough. Experienced voluntary sector organisations such as St Giles Trust will provide intensive support for up to 3,000 short-term prisoners over six years, inside prison and on release.

Providing funding at this scale and over a six year period gives the best chance of the intervention succeeding.

The financially innovative aspect of the Social Impact Partnership is that the Ministry of Justice has agreed to make repayments to investors based on the success of the work. If re-offending is

reduced by 7.5%, or more, investors will receive from Government a share of the long-term savings, repaying the investment. If re-offending falls further, investors will receive an increasing return, up to a maximum return on investment of 13%. If on the other hand the interventions fail, investors will not receive a return. Government pays only if the intervention works.

The Foundation made an initial commitment of £1 million which, with support from other foundations, allowed the initiative to get a green light from Government. As other investors came in, the Foundation’s required commitment reduced to £750,000.

Triodos £1,595 The balance of a commitment to a now closed social enterprise fund.

Key Fund Yorkshire £100,000 A loan to support community owned hydro schemes over five years.

UnLtd £250,000 A underwriting facility to support growth and development.

Total £2,999,623 No. Investments 12

New Economics Foundation £75,000 A loan to help finance the growth of NEF Consulting.

Total £1,655,172 No. Investments 5

Committed but not drawn-down at 31 December 2010 Bridges Community Ventures Ltd £337,464 The undrawn balance of our £750,000 investment.

Social Impact Partnership £892,708 The balance of our £1,000,000 commitment to the first Social Impact Bond.

Further investments of £4.1 have been approved by the Finance Fund Panel and are subject to the agreement of terms at 31 December 2010, making a total commitment of £4.7 at year end.

Other Funds

Task Fund Grants List

44

Adam’s Hat £15,000 All Saints’ Church, Tudeley £4,000 AMREF £10,000 Anna Freud Centre £15,000 Balletboyz £5,000 Beaminster Festival of Music and the Arts £2,500 Best Beginnings £3,000 Birmingham Royal Ballet Trust £3,000 Brechin Youth Project £7,000 Brecon Cathedral Choir Trust Endowment Appeal £5,100 British Youth Opera £5,000 Bryanston School £10,000 Canine Partners for Independence £5,000 Canterbury Cathedral Development Ltd £5,000 Canterbury Cathedral Development Ltd £12,000 Charlie’s Challenge £1,500 Chawton House Library £8,000 ChildHope (UK) £15,000 CITA £2,400 Community Foundation Network £15,000 Dorset Child & Family Counselling Trust £10,000 Dovedale Arts Weekend £12,000 Edinburgh Sculpture Workshop £15,000 English National Opera £5,000 English National Opera £15,000 Framework Housing Association £8,000 Free Word £15,000 Gloucestershire Young Carers £1,500 Highland Foundation for Wildlife £5,000

Howard League for Penal Reform £5,000 Huntingtons Disease Association £1,000 Into University £10,000 Kandinsky Theatre Company £10,000 Kids Company £15,000 King James Bible Trust £15,000 Maggie’s Cancer Caring Centres £7,000 Most Mira £10,000 Motor Neurone Disease Association £5,000 Multiple Sclerosis Society £5,000 Nordoff-Robbins Music Therapy £5,000 Only Connect £15,000 Pembroke College £15,000 Policy Exchange Ltd £7,000 Powerstock PCC £3,000 Salisbury Cathedral £15,000 Scotland’s Churches Scheme £6,500 Scottish European Educational Trust £5,000 Soho Theatre £15,000 Southern Sinfonia £5,000 Spear £15,000 St John Ambulance £5,000 St Mary Abbot’s School £1,000 St Swithun’s Church £7,000 Stephen Spender Trust £12,000 Swaziland Charitable Trust £3,000 Tate £10,000 The Abberley Hall Foundation £4,000 The Academy of Ancient Music £6,000 The Almshouse Association £5,000 The Alternative Theatre Company

£10,000 The Angel Canal Festival £1,000 The Aquila Trust £10,000 The Cricket Foundation £5,000 The Cuba Studies Trust £5,000 The Deborah Hutton Campaign £15,000 The Dunedin Consort and Players £5,000 The Friends of Friendless Churches £3,000 The Garden Museum £5,000 The House of Illustration £9,000 The Juvenile Diabetes Foundation (UK) £2,000 The Koestler Trust £12,500 The Landmark Trust £3,500 The Long Shop Project Trust £5,000 The New Marlowe Theatre Development Trust £15,000 The New School Butterstone £15,000 The PSP Association £5,000 The Royal Horticultural Society £15,000 The Scottish Child Psychotherapy Trust £5,000 The Sir Joseph Banks Archive Project £5,000 The Social Market Foundation £15,000 The Tunnell Trust £10,000 The Whitley Fund for Nature £11,000 Voce Chamber Choir £12,000 Walking with the Wounded £5,000 Westside Independent School £3,500 Worcester College £15,000 Young Musicians Symphony Orchestra £5,000

Total £705,000 No. grants 87

45

Chairman’s Statement Nearly 20,000 grants, totalling over £400 million, in the past fifty years: as the Foundation celebrates its 50th birthday, these figures speak eloquently of the generosity and foresight of Ian Fairbairn and his fellow benefactors who endowed it in 1961, in memory of his wife Esmée.

Elsewhere in this report, there are descriptions of the Foundation in earlier days and a record of the Trustees and Directors who have helped make its work so effective. It is not possible, however, to mention by name everyone who has worked for the Foundation or acted as an adviser and whose contributions have been just as great. I would like to take this opportunity to thank them all.

In the same way, we should not let the 50th birthday pass without recognising the role of Ian Fairbairn’s successors (and their teams) at M&G, the company with whose shares the Foundation was originally endowed. Their achievements in building M&G’s business until its sale to the Prudential in 1999 account for a substantial part of the value on which our grant-making is now based.

It is fitting, given the origins of the Foundation’s wealth, that we have become leaders in social investing and social ventures, alongside our traditional grant-making on the one hand and the venture capital programme within our investment portfolio on the other.

All this is taking place against a background of increased focus on philanthropy in public policy and debate. In the UK the new government has placed philanthropy at the centre of its thinking and initiatives; while, internationally, Bill Gates and Warren Buffett have been travelling the globe to encourage other successful entrepreneurs to follow their examples (and, half a century earlier, Ian Fairbairn’s) in giving away a large proportion of their wealth to philanthropic causes.

In terms of 2010, I am particularly pleased that our spending was at its highest ever level, supported by further recovery in the value in the Foundation’s investments. Sadly, the year saw the death of Penelope Hughes-Hallett, who had been an outstanding Trustee for twenty years until 2002.

Since the year end, I am delighted that we have appointed three new Trustees, Sir David Bell, John Fairbairn and Sir Jonathan Phillips, who bring an exceptional range of skills and experience to the board.

The executive team has more than maintained the high standards of their predecessors in running every aspect of the Foundation in a busy and productive year; and I thank them on behalf of the Trustees for their exceptional efforts.

Tom Chandos Chairman

46

Financial Review Financial Policies

Spend Review

Esmée Fairbairn Foundation’s finance and investment policies are intended to provide long-term stability and liquidity sufficient for the financing of the Foundation’s on-going spend and to maintain the real value of the endowment whilst preserving the purchasing power of spend over time.

During 2010 the Foundation spent £32.8 million (2009: £30.8 million) on grant-making, operations and programme related investment activities and draw-downs, an increase of 6.5% on the previous year.

The Foundation has an Investment Policy Statement that sets out the long-term investment objective, risk profile, strategic asset allocation and investment restrictions. This is reviewed annually. The Foundation aims to avoid, where possible, investments which have or are likely to have significant exposure for a sustained period to a type of business which potentially conflicts with the Foundation’s charitable activities.

Our budgets are prepared on a three year rolling basis.

Budgeted spend targets are set by reference to the average value of the investment portfolio over the preceding five years.

Spend targets may be over or under-spent in an individual year in a controlled manner. The Foundation’s operations, support and governance spend is set by reference to average total spend levels over the preceding five years to ensure it remains reasonable and proportionate.

The Foundation currently aims to spend approximately 4% of the investment portfolio’s average value over the preceding five years. During 2010 the Foundation spent close to target at 3.9% (2009: 3.7%).

Grant-making spend for the year was £27.9 million (2009: £24.3 million) – an increase of 14.8% on the previous year.

Grant-making spend is now closer to historic levels, having been slightly lower during the restructuring of the grant-making strategy and process through the previous two years. We expect grant-making to increase further during 2011 over and above the increase planned in relation to a programme of fiftieth birthday awards.

Support and governance spend remained stable at just over £2 million. This being 6.1% (2009: 6.6%) of total spend which is within the Foundation’s long-term target spend on operations.

Programme related investments made during the year amounted to £3.0 million (2009: £4.5 million). At the end of the year the Foundation held programme related investments, made via the Finance Fund, of £7.5 million (2009: £5.4 million), a further £1.7 million (2009: £1.1 million) being committed but not drawn. The fund continues to grow, albeit at a slower draw-down rate than originally anticipated. The target total commitment level of the fund is £21 million.

47

Investment Review The market value of the Foundation’s investments at the end of 2010 was £872.1 million (2009: £815.7 million). The portfolio’s annual total return of 10.2% (2009: 12.8%) outperformed by 1.2% (2009: 6.4%) the 9.0% (2009: 6.4%) annual returns of the Foundation’s long-term investment objective.

Following the financial crisis of 2008, the Foundation conducted a detailed review of its investment objective, policies, oversight and due diligence processes. The main driver of this review was a desire to make the portfolio more nimble and tactical, thereby strengthening the portfolio’s ability to respond to future market uncertainty and volatility. The Foundation also wished to ensure manager selection and ongoing oversight was subject to robust due diligence and that timely and accurate valuation and performance reporting was available. The outcome of this review was that during 2010 the Foundation has revised its long-term investment objective, risk profile and strategic asset allocation, and moved to a global custodian relationship and new due diligence processes.

The revised long-term investment objective is an average annual total return of UK RPI +4% (net of investment management and oversight fees) over rolling five-year periods, with a long-term portfolio risk profile. The risk is measured by the standard deviation of annual returns, budgeted at less than a simple benchmark of 70% FTSE All Share Equity Index / 30% FTSE All Stocks Gilts Bond Index and in any event not to exceed 10% in normal markets.

The key changes in the Foundation’s investment portfolio following our strategy review are: the introduction of an allocation of the fund to multi-asset managers, which allows more tactical shifts across asset classes and delegates more of the day-to-day investment decision to our managers; a move away from specific allocations to fixed income investments and commodities, which will now be accessed through our multi-asset managers; a move away from regional, country and sector-specific to global equity managers allowing for more tactical shifts across geographies and sectors; restructuring of our marketable alternatives to make the portfolio more global, enhance the return profile and diversify the sources of return; and, a reduction in the Foundation’s cash levels, following two years of being overweight in cash due to wider market instability. We will continue our core equity allocation, including an increase in emerging markets, which expresses our conviction that long-term growth will come from equities and also the ongoing enhancement of our venture capital portfolio as opportunities to invest in high quality managers arise.

The asset allocation at year end was as follows:

Asset Class

2010 2009 Change % % %

Equity investments Multi-asset investments Fixed income investments Alternative investments Investment cash Other investment balances Derivatives

26.4 46.5 (20.1) 30.6 – 30.6 – 4.2 (4.2) 32.0 35.7 (3.7) 6.8 13.8 (7.0) 4.3 (0.3) 4.6 (0.1) 0.1 (0.2)

Total

100.0 100.0

The 2010 year-end position is close to the strategic asset allocation target set by the strategy review. Throughout the year the Foundation’s assets have been subject to the increased market volatility. The rally of 2009 continued into early 2010 and the Foundation’s portfolio recovered some of the 2008 and 2009 losses. However, the gains made in the first and second quarter of the year were lost towards the end of the second quarter as the markets declined amid fears of global double-dip recession, potential sovereign debt defaults and the speculative asset bubble in China. Investor sentiment improved again in the later part of the year following signs that the US Federal Reserve was planning a further wave of quantitative easing and that China’s recent fiscal and monetary tightening was aimed at preventing asset bubbles without stifling the economy. As a consequence, markets rallied once again and the value of the portfolio rose accordingly, maintaining its positive momentum through to the end of the year.

While the Foundation was not immune to the market and exchange rate swings during the year, the asset allocation and manager selection in the portfolio dampened some of the market volatility and captured sufficient market upside to achieve the UK RPI +4% long-term investment objective. All asset classes posted positive returns in 2010. Emerging market equities and marketable alternatives (hedge funds) contributed the most to portfolio performance. However, while the latter significantly outperformed their respective benchmark, the former somewhat lagged, due primarily to a larger exposure to the Chinese market which remained one of the weakest emerging markets in 2010.

The Foundation’s direct property investments turned their 2009 performance around and posted strong relative and absolute returns during the year as a result of recovering asset valuations.

While the year-end value of the endowment was above the 2009 year-end figure, the investment portfolio remains below its 2007 peak. Looking back on a five year annualised basis the performance of the portfolio fell short of the revised long-term investment objective of UK RPI +4% due primarily to the financial crises of 2008–09. Market outlook for the next few years continues to be uncertain while the danger of high long-term inflation seems more real following the second wave of quantitative easing in the US. Nevertheless, we expect the new portfolio structure to increase the probability of the fund achieving the revised investment objective over the long term.

Portfolio performance and valuations over the five year period ending 31 December 2010 were as the chart on page 48.

The Foundation’s strategic asset allocation reflects the total return objective, thus the source of the return, whilst still considered, is not the main driver of the investment decision.

Sources of return include interest, dividends, capital distributions from funds, and realised and unrealised capital gains and losses. It is therefore anticipated that the return achieved from income alone will not be insufficient to meet spend levels in any one year or in the long term. Portfolio income for the year has remained relatively stable at £10.5 million (2009: £11.6 million), as expected.

48

Financial Review continued…

At 31 December 2010: Portfolio value = £872.1m Performance Fund Benchmark Relative 1 year (ann.)

3 years (ann.)

5 years (ann.)

10.2% 0.6% 4.4%

9.0% 6.8% 7.4%

1.2% (6.2%) (3.0%) 1100 1050

240

1000

220

950

200

900

180

850 800

160

750

140

700

120

650 600

100 80

Portfolio value (£m)

Portfolio performance (starting 1 January 2006)

260

550 1 Jan 06

31 Dec 06 31 Dec 07 31 Dec 08 31 Dec 09

Portfolio Value

Portfolio Performance

Risk Assessment The Trustee Board is responsible for the management of the risks faced by the Foundation. The Trustee Board and Audit Committee regularly review the Foundation’s risk position, internal controls assessment and compliance with relevant statutory and finance regulations.

In order to evaluate and manage risk the Foundation has a risk-mapping process which aims to identify the major risks that could impact on the strategic aims in the Foundation’s Strategic Plan. This process identifies the major risks the Foundation faces, the likelihood of occurrence, the significance of the risk, and any mitigating controls that are in place. It also seeks to identify any actions and resources required to manage these risks further.

31 Dec 10

500

RPI+4% Benchmark Performance

The Foundation’s investment activities are its main financial risk. This risk is managed, with the support of investment advisers, through: regular review of the investment policy; management of strategic asset allocation; risk measurement and reporting; independent valuation and performance reporting; diversification across a broad range of asset classes, geographies, investment managers and investment strategies; and on going market and manager updates and due diligence. The levels of manager concentration, currency exposure, leverage and liquidity are also key factors in managing the risks of the investment portfolio, and policies and restrictions to help manage these risks are included in the Investment Policy Statement. The majority of the Foundation’s investments are externally managed by investment managers in collective investment vehicles.

49

Governance The operation of Esmée Fairbairn Foundation is governed by a Charity Commissioners’ Scheme, dated 14 January 2002, which enables the assets to be applied by the Trustees at their discretion for general charitable purposes. The Scheme supersedes the original Trust Deed made on 20 January 1961 and a Charity Commission Order granted on 20 January 2000 giving Trustees investment delegating powers. The Charity Commission approved an incorporation of the Trustee body on 16 June 2008 in the name of The Trustees of Esmée Fairbairn Foundation.

The Foundation is a charity registered in England and Wales, number 200051.

Esmée Fairbairn Foundation exists and operates for the public benefit. Through its grant-making programmes it works to improve the quality of life throughout the UK by funding the charitable activities of organisations that have the ideas and ability to achieve change for the better.

The Foundation has a Strategic Plan 2011–2013 which outlines its overall strategy.

The Foundation’s primary interests are the arts, education and learning, the environment and enabling disadvantaged people to participate fully in society. Page 17 gives an overview of our funding programmes.

We have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing our aims and objectives and in planning our future activities. In particular, the Trustees consider how planned activities will contribute to the aims and objectives they have set.

The public benefit created by the Foundation’s grant-making is demonstrated in this report through our grants listing, case studies and articles.

Trustee Board The Foundation’s Trustees are listed on page 63 of this report.

The Trustee Board meets six times each year to set and oversee the delivery of the Foundation’s strategy. A number of Trustee committees support the work of the Foundation throughout the year.

The Foundation has a clear organisational structure with documented lines of authority and delegation, which is reviewed regularly by the Audit Committee and the Trustee Board. The Foundation also has segregation of duties with regard to governance, management, grant-making, finance and investment. Procedures are in place for documenting decisions, actions and issues.

Audit Committee The Audit Committee reviews and recommends to the Trustee Board systems of internal control on financial, governance and operational risks. It also reviews the draft annual report and accounts and meets with the Foundation’s external auditors.

Finance and Administration Committee The Finance and Administration Committee reviews and recommends to the Trustee Board annual budgets, staff remuneration and benefits and oversees major property, IT, governance and other projects.

Investment Committee The Investment Committee formulates investment policy, oversees its implementation, manages overall asset allocation, monitors investment performance and reports to the Trustee Board.

Nominations Committee The Nominations Committee makes recommendations to the Trustee Board on the appointment of new Trustees.

Funding decisions A Small Applications Committee comprising members of the executive takes decisions on Main Fund grants up to £30,000.

An Applications Committee, comprising Trustee and executive members, takes decisions on Main Fund grants up to £120,000. All decisions on Main Fund grants over £120,000 go to the Trustee Board. The Board allocates budgets and delegates decision-making on the Foundation’s other funding programmes to Strand Panels. All strand grants over £150,000 go to the Trustee Board. The Strand Panels are made up of Trustees and have external experts as advisers. The Strand Panels report to the Trustee Board. Finance Fund investments in excess of £1 million are referred by the Finance Fund Panel to the Trustee Board.

50

Statement of Trustees’ responsibilities in respect of the Trustees’ annual report and the financial statements

Under the Scheme rules of the Foundation and charity law, the Trustees are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and regulations.

The financial statements are required by law to give a true and fair view of the state of affairs of the Foundation and its net result for the period.

In preparing these financial statements, generally accepted accounting practice entails that the Trustees: • s elect suitable accounting policies and then apply them consistently; •m ake judgements and estimates that are reasonable and prudent; • s tate whether applicable UK Accounting Standards and the Statement of Recommended Practice have been followed, subject to any material departures disclosed and explained in the financial statements; • s tate whether the financial statements comply with the Scheme rules, subject to any material departures disclosed and explained in the financial statements; and •p repare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.

The Trustees are required to act in accordance with the Scheme rules of the Foundation, within the framework of the Charities Act 1993. They are responsible for keeping proper accounting records, sufficient to disclose at any time, with reasonable accuracy, the financial position of the Foundation at that time, and to enable the Trustees to ensure that, where any statements of accounts are prepared by them under section 42(1) of the Charities Act 1993, those statements of accounts comply with the requirements of regulations under that provision. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Foundation and to prevent and detect fraud and other irregularities The Trustees are responsible for the maintenance and integrity of the financial and other information included on the Foundation’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Disclosure of information to auditors The Trustees who held office at the date of approval of this Trustees’ report confirm that, so far as they are each aware, there is no relevant audit information of which the Foundation’s auditors are unaware; and each Trustee has taken all the steps that they ought to have taken as a Trustee to make themselves aware of any relevant audit information and to establish that the Foundation’s auditors are aware of that information.

Tom Chandos Chairman 7 April 2011

51

Independent auditors’ report to The Trustees of Esmée Fairbairn Foundation

We have audited the financial statements of Esmée Fairbairn Foundation for the year ended 31 December 2010 set out on pages 52 to 62. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice).

This report is made solely to the charity’s trustees as a body, in accordance with section 43 of the Charities Act 1993 and regulations made under section 44 of that Act. Our audit work has been undertaken so that we might state to the charity’s trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and its trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of trustees and auditors As explained more fully in the Statement of Trustees’ Responsibilities set out on page 50 the trustees are responsible for the preparation of financial statements which give a true and fair view.

We have been appointed as auditor under section 43 of the Charities Act 1993 and report in accordance with regulations made under section 44 of that Act. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland).

Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the APB’s website at http://www.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statements In our opinion the financial statements: • give a true and fair view of the state of the charity’s affairs as at 31 December 2010 and of its incoming resources and application of resources for the year then ended; • have been properly prepared in accordance with UK Generally Accepted Accounting Practice; and • have been properly prepared in accordance with the requirements of the Charities Act 1993.

Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Charities Act 1993 requires us to report to you if, in our opinion: • the information given in the Trustees’ Annual Report is inconsistent in any material respect with the financial statements; or • the charity has not kept sufficient accounting records; or • the financial statements are not in agreement with the accounting records and returns; or • we have not received all the information and explanations we require for our audit.

Kevin R Clark for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 1 Forest Gate Brighton Road Crawley West Sussex RH11 9PT 7 April 2011

for the year ended 31 December 2010

Statement of Financial Activities

52

Notes 2010 2009

£’000 £’000 Incoming resources Investment income Other incoming resources

2 2

10,500 106

11,625 104

Total incoming resources

10,606 11,729

Resources expended Cost of generating funds Charitable activities Governance costs

3 & 5 4 & 5 5 & 6

2,322 2,213 29,437 25,473 268 270

Total resources expended

32,027 27,956

(21,421) (16,227) Net (outgoing) resources Realised gain on asset held for sale

8 –

Realised and unrealised gains on investment assets

9

78,054

985 86,116

56,633 70,874 Net movement in funds Funds at 1 January 795,678 724,804

852,311 795,678 Funds at 31 December 15 The notes on pages 55 to 62 form part of these accounts.

The Foundation has no recognised gains or losses other than the net movement in funds for the year.

The net outgoing resources and resulting net movement in funds in each of the financial years are from continuing operations.

At 31 December 2010

Balance Sheet

53

Notes 2010 2009

£’000 £’000 Fixed assets Tangible fixed assets Investment assets Programme related investments

8 486 9 872,071 10 7,539

536 815,653 5,454

880,096

821,643

Current assets Debtors 11 1,026 Cash at bank 4,140

869 1,788

5,166 2,657 Creditors: falling due within one year 12

(25,138)

(21,512)

Net current liabilities

(19,972)

(18,855)

860,124 802,788 Total assets less current liabilities Creditors: falling due after one year Provisions: for liabilities

13 14

(7,743) (70)

(7,040) (70)

Net assets: representing unrestricted funds 15

852,311

795,678

The notes on pages 55 to 62 form part of these accounts.

The accounts were approved and authorised for issue by the Trustee Board on 7 April 2011.

Signed in the name and on behalf of The Trustees of Esmée Fairbairn Foundation:

Tom Chandos Chairman

For the year ended 31 December 2010

Cash Flow Statement

54

Notes 2010 2009

£’000 £’000 Net cash (outflow) from operating activities

18

(16,244)

(14,852)

Cash flows from investments and capital expenditure

577,729 262,904 Sale of investments Purchase of investments (566,826) (247,476) Sale of assets held for resale – 8,500 Decrease/(increase) in investment cash 52,976 (5,579) (Decrease)/increase in other investment balances (40,374) 2,629 Cash outflow on derivative financial instruments (2,535) (1,281) Increase in loan to subsidiary undertaking (160) (266) Cash outflow to programme related investments (3,000) (4,460) Cash inflow from programme related investments 867 173 Cash (outflow)/inflow from finance lease commitments (22) (23) Purchase of tangible fixed assets (59) (316) Net cash utilised on investments and capital expenditure 18,596 14,805 Net decrease in cash at bank

Analysis of change in cash Cash balance at the beginning of the year

Net cash inflow/(outflow)

2,352

(47)

1,788 1,835 2,352 (47)

4,140 1,788 Cash balance at the end of the year

Notes to the accounts

55

1. Basis of accounting and accounting policies

Leased assets

Assets obtained under finance leases are capitalised as tangible fixed assets and depreciated over their Basis of accounting useful lives. Finance leases are those where substantially all of the benefits and risks of ownership The accounts have been prepared in accordance with applicable UK accounting standards and comply are assumed by the Foundation. Obligations under such agreements are included in creditors net of the with the Charities Act 2006 and the Statement of Recommended Practice (‘Accounting and Reporting finance charge allocated to future periods. The finance element of the rental payments is charged to

by Charities’) revised 2005. Except as otherwise the Statement of Financial Activities over the period stated, these financial statements have been of the lease. prepared using the historic cost convention.

All other leases are operating leases. Operating Consolidated accounts lease annual rentals are charged to the Statement of Financial Activities on a straight-line basis over the The Foundation has not prepared consolidated accounts as the results of its subsidiary undertakings term of the lease to the first rent review date. are not material to the group.

Incoming resources Incoming resources are recognised in the Statement of Financial Activities in the period in which the Foundation becomes entitled to receipt. Dividend income and related tax credits are recognised from the ex-dividend date when they become receivable.

Resources expended

Investments

Quoted investments Quoted investments are stated at market value at the balance sheet date. Asset purchases and sales are recognised at date of trade.

Unquoted investments Unquoted investments are valued at the Trustee Board’s best estimate of fair value as follows:

Direct costs of generating funds, charitable activities and support and governance costs are charged to the relevant category or activity according to the area to which the expenditure relates. Support costs incurred that relate to more than one cost category are apportioned based on the number of full-time equivalent staff allocated to that activity.

Pooled investments are stated at fair value, the basis of fair value being the market value of the underlying investments held. These valuations are provided by the fund managers and are subject either to independent valuation or annual audit.

Irrecoverable Value Added Tax (VAT) is included in the Statement of Financial Activities within the expenditure to which it relates.

Where a valuation is not available at the balance sheet date, the most recent valuation from the private equity group is used, adjusted for cashflows and foreign exchange movements and any impairment between the most recent valuation and the balance sheet date.

Unquoted hedge funds are valued by reference to the market value of their underlying investments.

These valuations are provided by the third party Grants are recognised as expenditure in the year in which they are approved and such approval has been hedge fund administrators. communicated to the recipients, except to the extent Private equity investments are held through funds that they are subject to conditions that enable the managed by private equity groups. As there is no Foundation to revoke the award. identifiable market price for private equity funds, these funds are included at the most recent valuations from the private equity groups where the: Pension The Foundation operates a defined contribution i. private equity group provides a fair value that group personal pension scheme for employees. complies with the International Private Equity and The assets of the scheme are held separately from Venture Capital Valuation Guidelines; or those of the Foundation. The annual contributions are charged to the Statement of Financial Activities. ii. private equity group provides valuations that complies with International Financial Reporting Standards or US GAAP. Irrecoverable VAT

Tangible fixed assets Tangible fixed assets are included in the balance sheet at cost less accumulated depreciation.

Leasehold improvements are depreciated over the term of the lease. Office and computer equipment is depreciated at between 20% and 33% per annum.

Depreciation is charged on a straight line basis over the assets’ useful lives.

Where a private equity group does not provide a fair value that complies with the above, the Foundation is unable to obtain a reliable fair value, and therefore these investments are held at cost.

56

Notes to the Accounts

Derivative financial instruments Derivatives are recognised in the Balance Sheet at fair value. The Foundation uses forward currency contracts to reduce currency exposure in its investment portfolio. The basis of fair value of these forward exchange contracts is estimated by using the gain or loss that would arise from closing the contract at the balance sheet date. Managers of segregated funds also enter into derivatives as part of their portfolio risk management, fair values of these derivatives are provided by the fund managers.

Programme related investments Programme related investments that are loans are accounted for at the outstanding amount of the loan less any provision for unrecoverable amounts.

Unquoted equity and similar programme related investments are held at cost, less any provision for diminution in value, as the Foundation is unable to obtain a reliable estimate of fair value.

Realised and unrealised gains and losses on investments Realised and unrealised gains and losses on programme related investments are included in ‘charitable activities’ within the Statement of Financial Activities.

Realised and unrealised gains and losses on all other investment assets are included in ‘gains and losses on investment assets’ within the Statement of Financial Activities.

Realised and unrealised gains and losses on foreign exchange transactions Transactions denominated in foreign currency are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rate ruling at the balance sheet date.

All gains and losses on exchange, realised and unrealised, are included in the appropriate income or expenditure category in the Statement of Financial Activities.

Provisions Provisions have been made for possible future liabilities arising from contracts entered into by the Foundation.

Related party transactions Material transactions with related parties are disclosed in the notes to these financial statements.

The Foundation’s policy is for Trustees, executive or advisers to declare their interest and exempt themselves from all relevant discussions and decisions which may involve a transaction with a related party or in which they may have a conflict of interest.

2. Income Investment income

2010 2009 £’000 £’000

Equity investments Multi-asset investments Fixed income investments Alternative investments Investment cash

3,906 4,743 1,234 348 269

8,465 867 1,205 1,088

10,500

11,625

Other income

2010 2009 £’000 £’000

Bank interest 17 Interest received from subsidiary undertaking (note 9) 17 Income from programme related investments 72

106

30 20 54 104

3. Cost of generating funds

2010 2009 £’000 £’000

Investment managers, custodian and advisers fees 1,890 Direct staff and other costs 214 Support cost allocation 218

1,840 148 225

Total costs of generating funds

2,213

2,322

Notes to the Accounts

57

4. Charitable activities

2010 2009

£’000 £’000 Grant funding

27,918 Cancelled and returned grants (300)

24,286 (755)

Net grant funding 27,618 Programme related investments costs 83 Direct staff and other costs 614 Support cost allocation 1,122

23,531 (167) 625 1,150

Total charitable activities 29,437

25,473

Grants approved in 2010, listed on pages 19 to 44, in the annual report accompany these accounts.

5. Support cost allocation

Cost of generating Charitable Governance

funds activities costs 2010 2009 £’000 £’000 £’000 £’000 £’000 Support staff costs Premises, technology and other costs

76 142

374 748

Total support costs

218 1,122 172

Total support costs for prior year

225

1,150

88 538 84 974

178

578 975

1,512

1,553

–

1,553

6. Governance costs

2010 2009

£’000 £’000 Auditors’ remuneration 55 Direct staff and other costs 41 Support cost allocation 172

51 41 178

268

270

Total Trustees’ expenses of £31,689 (2009: £21,980) are included in governance costs and in costs of generating funds. Expenses were reimbursed to 6 (2009: 7) Trustees during the year.

58

Notes to the Accounts

7. Staff costs

2010 2009 £’000 £’000

Salaries 1,036 1,038 Social security costs 108 112 Pension contributions 123 123 Other staff related costs 119 79 Total staff costs

1,386

1,352

The Foundation operates a defined contribution group personal pension scheme and makes employer contributions of 12.5% when matched by a 5% employee contribution.

The average number of employees during the year calculated on a full time basis was as follows:

2010 2009

Investment management and oversight 3 Grant-making 17 Governance 2

3 17 2

Total number of employees

22

22

The number of employees who received remuneration of more than £60,000 in the year was as follows:

2010 2009

£60,000 – £69,999 1 £70,000 – £79,999 2 £80,000 – £89,999 1

1 2 1

All the employees paid over £60,000 had employer contributions, equal to 12.5% of salary,

made under the group personal pension scheme.

8. Tangible fixed assets

Office &

Leasehold computer

improvements equipment Total £’000 £’000 £’000 Cost At 1 January 2010 Additions in the year

489 38

362 21

851 59

At 31 December 2010

527

383

910

Accumulated depreciation At 1 January 2010 Depreciation charge for year

64 75

At 31 December 2010

139

285

424

Net book value At 31 December 2010 At 1 January 2010

388 425

98 111

486 536

251 315 34 109

The net book value of assets held under finance leases included above is £0.026 million (2009:£0.048 million) and the depreciation charge on these assets for the year was £0.022 million (2009:£0.024 million).

Notes to the Accounts

59

9. Investments i) Market value

2010

£’000

2009 £’000

Equity investments

230,088 379,245 Multi-asset investments 267,175 – Fixed income investments – 34,507 Alternative investments 278,917 290,979 Investment cash 58,971 112,586 Other investment balances 37,501 (2,208) Derivative financial instruments (581) 544 Total market value of investments

872,071

Investment cash includes all cash balances managed as part of the investment portfolio.

Other investment balances includes accrued income, amounts payable on investment purchases, amounts receivable on investment sales and accrued investment costs. Derivatives include all derivative assets and liabilities.

At 31 December 2010 alternative investments comprise hedge funds, venture capital and private equity, direct property funds, commodity investments and an investment in a subsidiary company which is carried at cost. This subsidiary invests in venture capital type investments and is managed as part of the Foundation’s investment portfolio.

The Foundation has entered into commitments to invest in private equity and venture capital funds.

At the balance sheet date outstanding commitments totalled £73.3 million (2009: £66.7 million).

The Foundation models its cashflows based upon the original commitment. ii) Purchases, sales, gains and losses

Market

Market

Value Sale Investment value

2009 Purchases proceeds gain 2010 £’000 £’000 £’000 £’000 £’000 Market value

Equity investments 379,245 248,799 (431,729) 33,773 230,088 Multi-asset investments – 265,735 (10,892) 12,332 267,175 Fixed income investments 34,507 116 (35,180) 557 – Alternative investments 290,979 52,176 (99,928) 35,690 278,917 Total 704,731 566,826 (577,729)

82,352

776,180

iii) Reconciliation to book cost

Book Cost Sale Investment Book Cost

2009 Purchases proceeds gain/(loss) 2010 £’000 £’000 £’000 £’000 £’000 Book cost and realised gains Equity investments 335,091 248,799 (431,729) 48,949 201,110 Multi-asset investments – 265,735 (10,892) 467 255,310 Fixed income investments 73,679 116 (35,180) (38,615) – Alternative investments 263,127 52,176 (99,928) 24,785 240,160 Total book cost

671,897

Market value adjustment Unrealised gains/(losses)

32,834

566,826 (577,729) –

–

Total 704,731 566,826 (577,729)

35,586

696,580

46,766

79,600

82,352

776,180

815,653

60

Notes to the Accounts

9. Investments continued iv) Derivative financial instruments

2010

£’000 Derivative position at year end Derivative financial instrument total net positions

2009 £’000

(581)

544

(581)

544

v) Realised and unrealised gains/(losses) on investments Realised Unrealised gain/(loss) gain/(loss) Equity investments Multi-asset investments Fixed income investments Alternative investments

2010 2009 £’000 £’000

48,949 467 (38,615) 24,785

(15,176) 11,865 39,172 10,905

35,586

46,766

82,352

73,740

Cash investments Derivative financial instruments

– (5,263)

(639) 1,604

(639) (3,659)

– 12,376

Total gains on investments

30,323

47,731

78,054

86,116

Gains in the prior year

12,375

73,741

–

86,116

33,773 62,551 12,332 – 557 3,315 35,690 7,874

vi) UK and overseas holdings

2010 2009

£’000 £’000 Equity investments UK listed – Overseas 230,088

177,356 201,889

230,088

379,245

Multi asset manager investments UK listed 9,036 – UK unlisted 156,028 – Overseas listed 13,911 – Overseas unlisted 88,200 –

267,175

–

Fixed income investments Overseas –

34,507

– 34,507 Alternative investments UK 67,211 Overseas 211,706

60,481 230,498

278,917

290,979

Total 776,180

704,731

Notes to the Accounts

61

10. Programme related investments (Finance Fund)

2010

£’000

2009 £’000

Total programme related investments as at 1 January 5,454

1,334

Amounts drawn down in the year 3,000 Amounts repaid in the year (867) (Losses) on programme related investments (48)

4,460 (173) (167)

Total programme related investments at year end

7,539

5,454

2010 £’000

2009 £’000

43 983

46 823

At the year end £1.7 million (2009: £1.1m) had been committed under the Finance Fund but remained undrawn, and a further £4.0 million (2009: £3.1 million) was approved subject to agreement of terms, making a total promised of £5.7 million (2009: £4.2 million).

11. Debtors

Prepayments and other debtors Loan receivable from subsidiary undertaking Total debtors

1,026 869

The loan receivable from the subsidiary undertaking is repayable on or before 28 February 2019.

Interest is payable annually on the amount drawn at Bank of England base rate plus 1.75%.

The loan faciltiy is for an amount up to £2.0 million.

12. Creditors: amounts falling due within one year

2010 £’000

2009 £’000

Grant commitments Accruals Trade and other creditors Commitments due under finance leases

24,837 205 85 11

21,020 327 144 21

Total creditors falling due within one year

25,138 21,512

13. Creditors: amounts falling due after one year

2010 £’000

2009 £’000

Grant commitments Commitments due under finance leases

7,729 14

7,014 26

Total creditors falling due after one year

7,743 7,040

14. Provisions

2010 2009 £’000 £’000

As at 1 January 70 Charge for the year –

70 –

As at 31 December

70

The provision relates to possible future liabilities arising from contracts entered into by the Foundation.

70

62

Notes to the Accounts

15. Reserves

2010 £’000

2009 £’000

As at 1 January

795,678

724,804

Net outgoing resources Gain on asset held for resale Gains on investment assets

(21,421) – 78,054

(16,227) 985 86,116

Net movement in funds in year

56,633

70,874

852,311

795,678

2010 £’000

2009 £’000

After five years

409

409

Total annual operating lease commitments

409

409

Reconciliation of statement of financial activities to operating cash flows

2010 £’000

2009 £’000

Incoming resources Decrease in accrued income

10,606 534

11,729 943

11,140

12,672

As at 31 December The Foundation considers all funds to be unrestricted.

16. Operating Leases At year end the Foundation had lease agreements in respect of property for which payments extend over a number of years.

Annual commitments under non-cancellable operating leases expiring:

17. Related Party Transactions There were no related party transactions during the year other than those with subsidiary undertakings disclosed in note 2 and note 11.

18. Cash Flow

Incoming resources Grants awarded Increase in grant commitments

(27,618) (23,531) 4,532 1,128

Grants paid

(23,086)

(22,403)

Other resources expended (4,266) (5,346) Decrease in trade and other creditors (59) (180) (Decrease)/increase in accrued expenses and prepayments (119) 139 Increase in programme related investments provisions 37 167 Increase in provision – – Depreciation charge for the year 109 99 Other operating costs Net cash outflow from operating activities

(4,298)

(5,121)

(16,244)

(14,852)

63

Trustees, committees, staff and advisers As at 7 April 2011

Trustees Tom Chandos Chairman Sir David Bell Felicity Fairbairn John Fairbairn Beatrice Hollond James Hughes-Hallett Thomas Hughes-Hallett Kate Lampard Baroness Linklater Sir Jonathan Phillips William Sieghart

Staff Dawn Austwick Chief Executive Grant-making Nicola Pollock Director of Grant-making Derek Bardowell Grants Manager Jenny Dadd Grants Manager Annabel Durling Grants Officer Alison Holdom Grants Manager John Mulligan Grants Manager Jo Rideal Grants Manager Laurence Scott Grants Manager Sharon Shea Grants Manager

Finance Claire Brown Finance and Investment Director Clare Kinnersley Finance Manager Bharat Naygandhi Finance Assistant Iana Petkova Investment Officer Danyal Sattar Finance Fund Manager Resources James Wragg Director of Resources Gina Crane PA to the Chief Executive / Impact Programme Co-ordinator Tania Joseph Administrator Marette Kroonenberg Administrator – Grant-making Laura Lines Administrator – Communications and Resources Matt Mayer ICT and Facilities Officer Tereasa Robinson Administrator – Reception Swee Tsang Administrator – Grant-making

Committees

Advisers

Audit Committee Kate Lampard Chairman Felicity Fairbairn Thomas Hughes-Hallett Tom Chandos Observer

Legal and Financial KPMG LLP Auditors 1 Forest Gate Brighton Road Crawley West Sussex RH11 9PT

Finance and Administration Committee Tom Chandos Chairman James Hughes-Hallett William Sieghart Investment Committee James Hughes-Hallett Chairman Tom Chandos Beatrice Hollond Nominations Committee Tom Chandos Chairman James Hughes-Hallett Kate Lampard William Sieghart Strand Panel Advisers Alex Beard (Finance Fund) Prue Leith (Food) Hugh Raven (Food)

Berwin Leighton Paisner Solicitors Adelaide House London Bridge London EC4R 9HA DLA Piper LLP Solicitors 1251 Avenue of the Americas New York New York 10020-1104 Royal Bank of Scotland plc Bankers London Victoria (A) Branch 119/121 Victoria Street London SW1E 6RA Cambridge Associates Ltd Investment Advisers Cardinal Place 80 Victoria Street London SW1E 5JL JPMorgan Chase Bank, N.A. Custodian 125 London Wall London EC2Y 5AJ

64

Esmée Fairbairn Foundation’s history

In 1961 Ian Fairbairn, a leading City figure, decided to endow a charitable foundation with the bulk of his holdings in M&G, the company he had joined some 30 years before.

M&G was a pioneer of the unit trust industry in the UK. It grew out of Ian Fairbairn’s determination that investments in equities, previously the preserve of the affluent, should be available to all – giving everyone the potential to own a stake in the nation’s economy.

His purpose in establishing the Foundation was two-fold. In the interests of wider prosperity, he aimed to promote a greater understanding of economic and financial issues through education.

He also wanted to establish a memorial to his wife, Esmée, who had played a prominent role in developing the Women’s Royal Voluntary Service and the Citizens Advice Bureaux. She was killed in an air raid during the Second World War. Esmée Fairbairn’s sons, Paul and Oliver Stobart, also contributed generously to the Foundation established in their mother’s memory.

In 1999 the Foundation sold its holding in M&G as part of the company’s takeover by the Prudential Corporation plc. As a result, the Foundation’s endowment grew significantly in value as did the size and scope of the grants it was able to make.

Today, the Esmée Fairbairn Foundation is one of the largest independent grant-making organisations in the UK.

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EsmĂŠe Fairbairn Foundation Kings Place 90 York Way London N1 9AG T 020 7812 3700 F 020 7812 3701 E info@esmeefairbairn.org.uk www.esmeefairbairn.org.uk Registered charity 200051