Forces in Mind Trust (FiMT) was established in 2012 with a Big Lottery Fund 20-year endowment of £35m, following a successful bid from the Confederation of Service Charities. The size and longevity of the trust reflected the fund’s then strategy of empowering grant-awarding centres of excellence that could bring systemic change, while operating with agility and being unafraid to innovate.
Chief executive, air vice-marshal Ray Lock CBE, says: “Each year around 15,000 people leave the UK armed forces. The vast majority move successfully into civilian life; however, some need additional support, and it is these most vulnerable people for whom FiMT exists to help. The security of a sizeable endowment, matched with the finality of a spend-out date, has led the trust to become increasingly effective in targeting its funding, flexing its power to convene and influencing key policymakers across the UK.”
A key area of FiMT’s work is to ensure that every ex-service person secures satisfying and fulfilling employment. “Demonstrating to UK businesses the tremendous skills and experience that service-leavers bring is a good example of how each facet of this spend-out trust can be deployed to the benefit of the UK economy, as well as the armed forces community,” says Lock.
The means to release money quickly
The choice of spend-down trust over conventional trust often comes down to the difference in the social impact of small amounts of money spread out over time, compared with releasing money sooner – as was the case with the Diana, Princess of Wales Memorial Fund. Established after the death of the princess in 1997, it raised around £140m in donations from the general public, community groups and commercial partnerships, and was closed in 2012.
Founding CEO and former charity commissioner Andrew Purkis says: “If we’d opted for a conventional trust and simply used the interest on the money each year for grants, retaining the original sum in the bank, it would have resulted in a thin dribble of grants each year. We knew people would want that money spent, and it was important for the public that gave some of that money to see that it was going out to her favoured causes.”
Time was another factor in the decision. The use of the princess’s name and reputation was unlikely to last beyond a generation, and the trustees decided on a more concentrated investment in planned initiatives in a few chosen areas that resonated with the memory of the princess; a short-term impact that would create a ripple effect and ensure that those changes would continue.
“You won’t achieve that by dribbling out small amounts over the long term and, overall, you are likely to have locked up all your potential in the bank,” says Purkis. “Many of these trusts are set up for very urgent need now and so it is logical to make It spend out and not become a permanent part of the landscape.”
There are a few limitations
There are some potential downsides to a spend-out trust. If it is set up by a family or company, when the money is gone and the fund is closed, so too have the opportunities for the family or brand name to have a fresh impact and continuing involvement. Opportunities to help new causes that emerge several years down the line may also be lost.
The charity’s trustees have a legal duty, enforced by the Charity Commission, to see that any money raised is applied in the way the original appeal said it would be.
James Partridge says: “When the fund and its allotted timescale come to an end, unless the wording of the appeal leaves scope to do so, it is not legally possible to extend the life of the project or spend the money on other things, even if they are similar to the original appeal and common sense says that the donors would agree.
“If funds remain at the end, and the appeal wording does not allow scope for the trustees to give them to another project, it will be necessary to apply to the Charity Commission for a scheme that makes provision for what is to happen.”
