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2020-09-30-accounts

Charity No: 1087053 Company No: 04228843

FRIENDS PROVIDENT CHARITABLE FOUNDATION (A COMPANY LIMITED BY GUARANTEE) REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2020

FRIENDS PROVIDENT CHARITABLE FOUNDATION

REPORT OF THE TRUSTEES - YEAR ENDED 30 SEPTEMBER 2020

I N D E X P A G E
_____________
REFERENCE AND ADMINISTRATIVE INFORMATION 3-4
REPORT OF THE TRUSTEES
CHAIR’S INTRODUCTION 5-6
DIRECTOR’S REPORT 6
ANNUAL REPORT 7-32
INDEPENDENT AUDITOR’S REPORT 33-36
STATEMENT OF FINANCIAL ACTIVITIES 37
BALANCE SHEET 38
STATEMENT OF CASH FLOWS 39
NOTES TO THE ACCOUNTS 40-51

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REFERENCE AND ADMINISTRATIVE INFORMATION

Charity name:

Friends Provident Charitable Foundation

Other names by which the charity is known:

Friends Provident Foundation

Charity number: Company number:

1087053 - registered in England & Wales.

04228843 - incorporated in the UK

REGISTERED ADDRESS

Blake House 18 Blake Street York YO1 8QG

BOARD OF TRUSTEES

Members:

Abraham Baldry (joined 1 April 2020) Ann don Bosco (joined 1 April 2020) Paul Dickinson Joanna Elson (Vice Chair) Patrick Hynes (retired 31 December 2019) Kathleen Kelly Priya Lukka (joined 1 April 2020) Stephanie Maier (joined 1 April 2020) Stephen Muers (Chair from 1 January 2021) Hetan Shah (retired 31 December 2020) Aphra Sklair

KEY MANAGEMENT PERSONNEL

Foundation Director:

Danielle Walker Palmour

Investment Engagement Manager:

Colin Baines

Grants Manager:

Abigail Gibson

Finance and Operations Manager:

Kate Kendall

Communications Manager: Nicola Putnam

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REFERENCE AND ADMINISTRATIVE INFORMATION

PRINCIPAL ADVISORS

Principal Bankers: CAF BANK Limited Triodos Bank NV PO Box 289 Deanery Road West Malling Bristol Kent BS1 5AS ME19 4TA Auditor: Sayer Vincent LLP Invicta House 108-114 Golden Lane London EC1Y 0TL Investment Advisor: Peter Jones Independent Advisor Solicitors: Wrigley’s Solicitors LLP 19 Cookridge Street Leeds LS2 3AG Investment Managers: BMO Asset Management 55 Baker Street London W1U 7EU

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REPORT OF THE TRUSTEES

CHAIR’S INTRODUCTION

This is my last foreword as Chair after being in role for five years, and so I want to take the opportunity to look back. It is fair to say that over that time, Friends Provident Foundation has greatly changed. We have stayed upstream and focused on systemic level change through clarifying our vision to create a fair and sustainable economic system that serves society. Strategically we have moved from a focus primarily on grant giving to a wider threefold strategy for creating change: grant making, our role as an investor and our ability to convene and communicate.

One of the most significant decisions of the trustees was that given the importance of our mission and the quality of the applications we were receiving we would start using some of our endowment to fund projects. This was not a supply side decision to ‘spend down’ but a demand-led approach to support our grantees, and a recognition of path dependency: tomorrow’s economy will be shaped by today’s interventions. As a grant maker we see ourselves as an early-stage risk funder. We have a wide portfolio – working across the spectrum of economics curricula, the media, think tank research, as well as supporting local and regional projects which may demonstrate new economic models.

As a relatively small funder with a big mission, the Foundation has worked to help shape thinking in the wider world of philanthropy, making the case for grant making organisations to take a more systemic approach and to think about the economy. We have been pleased to see new funders enter this field including Partners for a New Economy; Thirty Percy, Laundes Foundation, Hewlett and Omidyar.

I’m also proud that we have been a leader in using our whole endowment for mission, including through impact investing, and shareholder engagement. We have played a leading role across the foundation sector in helping them consider that approach. This was exemplified by our ‘ESG Investing Olympics’, where we partnered with others to put over £33m of investment funds to tender in a bid to drive up the quality of ethical investment funds. This led to over 60 proposals and ultimately the creation of a fund that sets new ethical standards by the winner: Cazenove.

We have sought to develop a learning and questioning culture at Friends Provident Foundation. Our external evaluation in 2018 by New Philanthropy Capital helped us reflect on our performance. It was clear that our move to core funding some key organisations had been welcomed, and that we were seen as a supportive funder. The evaluation spurred us to think more about how to strengthen diversity and racial economic justice, and this has started to change some of our funding decisions to widen our portfolio.

The world continues to change around us. The pandemic has uncovered and exacerbated existing problems in our society and cast light on the nature of our economy. There is greater recognition of the imbalances of the UK economy including regional inequalities and precarious and low paid jobs which often do not reflect their social value. The spectre of unemployment is back. The questions that the Foundation has been addressing for the last decade are more relevant than ever: how do we build an economy that works for everyone? What are the structures and incentive systems which will align shareholder value with societal value? What metrics will allow investors to properly value the long term?

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It has been a pleasure and a privilege to be part of the work of such a forward-looking Foundation. I would like to thank our partners, grantees, advisors, trustees and staff for working together for a better world. And of course, particular thanks to Danielle Walker Palmour, our Director, who has been with the Foundation from the start, and continues to make it an inspirational body. I look forward to seeing the progress of the Foundation’s work under the able leadership of my successor, Stephen Muers.

Hetan Shah October 2020

DIRECTOR’S REPORT

As always, annual reports mark endings and beginnings; technically the end of one financial accounting period during which we take stock of our spending and activities and set out our plans for the next. They are opportunities for reflection and review, renumeration and planning.

In this case, 2020 has been a year like no other. And, in the midst of so much unplanned activity arising from the Covid-19 pandemic, we have the planned departure of our Chair, Hetan Shah.

It is a common trope in the foundation sector that an important asset of charitable foundations is our board of Trustees; the reality is that to foundation staff, boards can be considered liabilities that need to be worked around, from which real innovation must be shielded and staff protected. That is not the case for Friends Provident Foundation, and this is largely due to the board culture cultivated by the Chair. Over the past five years, Hetan has supported, coached, cajoled, and guided the staff and Trustee team to focus our strategy and review progress, discover our organisational and individual voices, deepen our relationships with key organisations through core funding and centre of capital base as a core element of our strategy. And it has been done with good humour, honesty and with a sense of shared mission – to create a fair economy responsive to the needs of society.

Although we say goodbye to Hetan at the end of this year and trustee Patrick Hynes late in 2019, we also welcomed four new Trustees in 2020 – Abraham Baldry, Ann Don Bosco, Priya Lukka and Stephanie Maier – who have all already added huge value to our work. In 2021 we look forward to welcoming Stephen Muers as our new Chair of Trustees. Stephen brings experience of strategy and thought leadership to the role alongside existing service as a trustee.

In this year like no other, we hope to move forward into the next to build on the resilience and innovation we have discovered in ourselves this year as well as create new opportunities to grow the chorus of voices demanding an economy that serves the current and future needs of society.

Danielle Walker Palmour

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Our purpose - Fair Economy. Better world.

Friends Provident Foundation is an independent charity that makes grants and uses its endowment towards a fair and sustainable economic system that serves people and planet. We connect, fund, support and invest in new thinking to shape a future economy that works for all.

Since 2004, we have pioneered the creation of a fair economy for a better world. Already, we have helped improve access to financial services for people who were once excluded and supported the development of resilient economic communities across the UK.

We are a catalyst for wider change, making an impact through continuous experimentation and shared learning. And we do all we can to embody the change we want to see. We invest in great social enterprises and use our money in line with our values.

Tomorrow, we will continue to fund more new thinking, connect new ideas, invest our capital in line with our aims and values and create better systems so that in the future, the economy will serve both people and planet.

OUR AIMS

The economy lies at the heart of today’s biggest issues. Our economic system produces inequality, environmental degradation and undermines good business and behaviours. It should not have to be that way.

How we work to achieve our vision

Our mission is to help create a ‘fair economy, better world’. Our strategy contributes to the delivery of this mission in three ways, through:

  1. Giving grants.

  2. The way we manage our investments.

  3. Our power to convene and communicate.

The problems we face are urgent, including the huge changes to the nature of work, major regional economic imbalances, and long-term environmental issues, such as climate change, that have the potential to impact on the economy. In light of this, we have made some decisions to change the way we operate.

Using all our resources – spending capital

We believe that the challenges facing the world and our society are formidable. Creating a responsive and resilient economic system to face these challenges will require all our effort and resources. We will therefore use our capital endowment, not just our income, to fund suitable quality projects.

Core funding

We will consider more core funding of organisations with whom we have built a relationship of trust, with the aim of empowering organisations working in our area of interest to work flexibly and to provide them with the capacity to respond effectively to changes in the external environment.

Investment engagement

The Foundation aims to align its work and investment and has therefore developed a new function – investment engagement. Trustees identified some key themes to underpin and focus our proactive

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work in this area, drawn from what we have learned so far or key developments in our programme areas.

Our programme

We work through grant-giving, investment, sharing what we have learned and convening events. Our programme – Developing a Fair Economy – focuses on the system change grounded in lived experience that we believe is needed for a fair economy and a better world.

Developing a Fair Economy

Local economies that have the assets, understanding, tools and capacities to respond to changes in economic circumstances are important for strong communities.

Economic, social, and environmental disruption in the UK and beyond is evidence that the way capitalism and financial systems operate is creating social disharmony and increasing inequality. Our Developing a Fair Economy grants programme focuses on how we can make a difference to the lives of the most vulnerable as this is where the flaws in the system are most obvious, not just in terms of poverty, but also inequality.

Systems change

We support disruptive innovation that will change the way the economy is organised. We’re keen to explore and inform how change at a regulatory, policy and other systemic level might contribute to an economy that balances risks and rewards more fairly and uses resources sustainably.

We know that systems change will need strong analysis from a range of perspectives. So, we want to support work that can influence decision-making by different groups in the economy, with the aim of stimulating new realistic ideas and practical examples that can be scaled up.

Local economies

For most people, their experience of economic forces and their understanding of how they are affected by those forces is at a local level, whether that is a region, city, or community. Our work on this theme aims to support the development of fair and healthy local economies, building on thinking and approaches that help local areas to create economic well-being and retain value in the community. This could be relating to community assets, building local capacity to manage economic change, and other local resources.

So, our focus is on testing and reviewing local or small-scale initiatives that support local economies through diversity, flexibility and building capability in communities.

Right Use of Money

How can financial systems create and sustain social harmony , and at the same time deliver economic goods and services? This question forms the basis of the Foundation’s work and reflects ground-breaking work to develop ethical funds carried out by our original donor, Friends Provident, over 30 years ago.

The Foundation continues to explore these issues through its main grant-making programme as well as supporting a small number of projects to explore aspects of the ethics of the financial systems that underpin our society.

In 2019-20 we set ourselves eight goals:

This year has been marked by the emergence of a global pandemic which forced Foundation staff to relocate all operations to remote working from the end of March 2020, coupled with the two-month

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absence of the Foundation Director on a planned sabbatical between April and June. Therefore, in reviewing the annual objectives, it is a testament to the flexibility and hard work of the remaining staff that most objectives were achieved; those that were not, were only partially achieved due to Covid-19.

1. To become more outward focused in this phase of our programme, ‘Develop a Fair Economy’, to connect more effectively with others in the field to achieve our mission.

2. To re-orient the Foundation’s governance and operations toward learning. Partly achieved – The Promising Approaches strand of funding was implemented and two projects were funded under that heading to enable the maintenance of momentum; we have sought to foreground grants impact/learning on Trustee agendas and to have more active learning from projects in the team, with limited success; our efforts to mine our evidence were only partially achieved in relation to economics education; our Resources Committee (RC) considered a funder benchmarking scheme (not progressed); and the staff/ Trustee learning sessions have been transformed into lunch and learn sessions trialled this Summer.

3. To focus our resources on the projects most likely to be transformational. Achieved – Internal systems required to focus resources were put in place, with regular budget monitoring, grants spend management and sharpened funding prioritisation/ recommendation. Although we have focused our funding decisions, it is difficult to assess whether the implementation of new systems will achieve transformational change.

4 . To launch our investment strategy with a new investment manager to better align our capital with our mission.

5. To develop metrics and monitoring methods to track progress towards a fair economy Not achieved – This has not been achieved for the second year; a small working group of staff and Trustees are considering next steps.

6. Ensure an effective transition of good governance through Trustee and Chair recruitment processes.

Partly achieved – Discussions of development carried out in appraisals and changes considered by RC (on-going); overarching staff development plan and organisational/ personal metrics not achieved. This will be continued within objectives for 2020-21.

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8. To develop an effective operational response to the climate emergency. Partly achieved – Milestones for Funders Commitment on Climate Change, Climate Perks scheme and Climate Emergency Declaration achieved; wider discussion with those we support at our conference and newsletter but not deeper engagement; Blake House discussion started but not resumed due to the pandemic.

How we worked through our grant giving New Grants in 2019/2020

27 new grants were made during over year, resulting in commitments worth just under £2.3m. 39 stage two applications were considered in all, with a value of just over £4m.

12 (or 44%) of the grants made were to organisations that had not previously received a grant from the Foundation, with the remaining 15 (or 56%) being made to previous grant holders.

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The themes covered by these new grants were communicating economic ideas; investor/corporate behaviour; community energy; local development; a fair transition to a low carbon economy; tax; community assets and convening, and diversity, equity and inclusion. We also made six grants for unrestricted (core) funding.

Stage Two Applications by Place

Geographically the largest number of applications at stage two were for projects operating across the UK (50% of all applications).

No applications were assessed at stage two for activity in Northern Ireland.

The success rate for UK-wide, English and Welsh focused applications ranged from 73%85% but was significantly lower for Scotland (33%).

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Applications Received 2019/2020

225 outline (first stage) applications worth £28m were submitted to the Foundation over the year a sizeable increase from 2018/19 (154 applications worth £17.7m).

The past 5 years have seen a pattern of increasing demand from the programme.

----- Start of picture text -----
Applications received by financial year
250
200
150
100
50
0
2015/16 2016/17 2017/18 2018/19 2019/20
----- End of picture text -----

Stage One Applications by Place.

The greatest number of applications received were for projects with a UK-wide focus (48%) with a further 36% being for activity in England. A smaller number of applications were received for Scotland, England & Wales, Wales and Northern Ireland.

UK-wide applications were a still greater proportion of those invited to stage 2 – whilst they accounted for 48% of applications overall, they accounted for 57% of those invited to stage 2. (These were primarily Systems Change applications).

Similarly, applications from Scotland and Wales were also a greater percentage of those invited to stage 2 than they were of total applications.

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Unrestricted Funding

Over the year we continued to develop our strategy of providing unrestricted funding for organisations with whom we have strong working relationships and a close synergy in terms of strategy and mission.

This funding aims to empower these organisations to work flexibly, to take more risks in pursuit of their mission and to have the capacity to respond to changes in the external environment.

Six new grants were made for core funding over the year – three of these were repeat core funding, three were new core grants.

New Grants 2019/2020 New Grants 2019/2020
Behavioural
Insights Ltd		 Behavioural
insights and
market design: a
wider toolkit to
tackle inequality		 £10,000 Behavioural insights give the tools to better
diagnose and understand why markets don’t
deliver the outcomes we want. It can also help
develop better solutions to address big policy
challenges like inequality. Building these
insights into economic policy offers a more
empirical, pragmatic and optimistic view of how
markets can deliver for most consumers and
citizens. We will write an extended outline that
will form the basis of a fuller report (or set of
papers) targeted at policymakers setting out
the case for this and proposed directions for
future research.
Centre for
Local
Economic
Strategies
(CLES)		 CLES Core
Funding 2		 £100,000 Core funding in support of CLES' strategy.

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Energy
Garden		 Energy Garden: a
fair, scalable
model to
transition
transport to a low
carbon
sustainable future		 £97,000 Energy Garden invests in renewable energy to
fund community development. We foster
resilience in local communities, economies,
and ecologies. Starting with London’s
transportation network, Energy Garden is
working with all six transport operators to
transition them to low-carbon energy and
provide community groups access to rail-side
space for greening, air quality, biodiversity and
eco-learning. Our FCA-approved investment
model (of £100 million) aims to deliver
environmental & social change with the
revenue from energy sales, as well as selling
social and environmental outcomes to
corporates (fully accredited, paid youth training
programme, refugee integration support,
schools’ programmes, adult mentoring and
inclusion for elderly).
Fairshare
Educational
Foundation
(operating as
ShareAction)		 Developing the
legislative case
for Responsible
Investment in the
run up to COP 26		 £80,000 Too often, UK policy development around
sustainable finance is conducted in piecemeal
fashion, skirting around the edges of financial
regulation. This reflects a conservative mind-
set amongst policy makers and is exacerbated
by the fact that no single department has
ownership of sustainable and responsible
investment. ShareAction wants to initiate the
enactment of a Bill bringing together all
aspects of responsible investment which will
have a transformational impact and propel the
UK finance sector towards a more sustainable
pathway. We see this as a vital piece of work if
we are to succeed in halting the climate crisis
and one which will put the UK front and centre
of the sustainability movement ahead of COP
26.
Finance
Innovation Lab		 Core Funding 2 £100,000 Core funding in support of Finance Innovation
Lab's work.
Forum for the
Future		 Enabling and
empowering
community-led
fair transitions to
resilient, net-zero
carbon
economies		 £190,000 Achieving net-zero by 2050 means the end of
fossil fuel power stations, internal combustion
engine factories and gas boilers. As plants
close/are repurposed, people and communities
risk being stranded, as when coal mines
closed. However, net-zero industries (e.g.
electric vehicle manufacturing) offer scope to
increase economic resilience. To enable rapid,
resilient transitions we aim to: Empower at-risk
communities to design & implement transition
plans; Engage business in piloting pathways to
fair transitions; Show that multiple sectors can

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benefit from engaging communities in their net-
zero pathway; Develop positive narratives to
shift mindsets around decarbonisation;
Support scaling across sectors & activate
wider levers for change.
Institute of
Welsh Affairs		 Our Land £10,000 This short piece of work will fund engagement
with key stakeholders to explore attitudes &
motivations around and barriers & enablers of
community involvement in land use. It will
focus on landowners (public and private),
policy makers (national & local) and
community organisations. The end output will
be a report and launch event which brings
participants together, sets out the areas of
consensus and seeks a way forward on those
issues where there is not. They would use this
to put together a larger proposal and as the
basis for engagement with the 2021 Assembly
elections.
Institute of
Welsh Affairs
(IWA)		 Core funding:
Supporting a
successful, clean,
green and fair
economy for
Wales		 £100,000 The IWA is Wales’ leading independent think
tank, with a track record of shaping debates
and influencing change in Wales through
policy research, publications and agenda-
setting events. Our recent policy work has
been funded on a per-project basis. We want
to increase our core capacity to: 1. Develop,
deliver and communicate high quality,
responsive economic policy analysis and
influencing 2. Run economic policy events with
communities and partners to develop and
share our intelligence on what matters most in
enabling successful local economies 3.
Resource the development of future policy
research projects. This will help ensure
communities in Wales benefit from an
economic policy framework informed by their
needs and aspirations.
Local Trust Enabling
community wealth
building in the
most "left behind"
areas		 £15,000 We are seeking funding to extend and develop
the Community Wealth Fund Alliance’s
campaign for a new independent permanent
endowment to invest in our most 'left behind'
neighbourhoods. Our aspiration is to create a
£4 billion fund, supported by an estimated £2
billion in new dormant assets matched by the
private sector. The most important distribution
principle is that funding decisions would be
devolved to communities as we believe this to
be the best means of realising our goal, which
is to build strong social and economic capital in

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these neighbourhoods, generating individual
and collective confidence and resilience, whilst
giving power back to communities who feel
disenfranchised and disempowered.
London School
of Economics
and Political
Science		 Implementing the
UK Investor
Roadmap for a
Just Transition		 £141,220 Our goal is to stimulate and support system-
level innovation in the UK that will enable
investors and the financial sector more broadly
to deliver a just transition. The work will seek
to implement the key recommendations of the
Investor Roadmap for the just transition, which
was launched on 1 October 2019. Over an 18-
month period from April 2020, the project will
focus on achieving positive impact through
shareholder engagement, capital reallocation
(including place-based assets) and policy
advocacy at the local and national levels.
COP26 in Glasgow will be a key milestone to
show how financing a just transition can
generate stronger climate ambition.
London School
of Economics
and Political
Science		 Financing a Just
Transition 2.0:
Implementing the
UK Investor
Roadmap		 £58,276 This funding proposal is designed to enable
the early implementation of the Investor
Roadmap for a Just Transition in the UK during
the six-month period from October 2019 to the
end of March 2020. The core goal of this
funding is not just to maintain the momentum
that has been achieved but to translate this
into practical action.
Manchester
Metropolitan
University		 Teaching
Economic Policy
Institutions		 £38,000 This project aims to fill a major gap in
economic understanding, by developing new
teaching resources on economic policy-making
institutions, on the basis of an original
appraisal of the state of knowledge in this
regard within the economics profession. The
project will make a unique contribution to the
development of economics teaching and more
generally our understanding of power, politics
and institutional processes in the production
and reproduction of economic structures. The
project also facilitates a new collaboration
between researchers and lecturers in higher
education, the Rethinking Economics
campaign organisation, and wider policy-
making communities.
Muslim
Women's
Council		 Think + Do Tank -
a hub for Muslim
women to explore
new economic
approaches		 £150,208 We want to establish a ‘Think + Do Tank’ that
engages Muslim women on their lived
experience of poverty, barriers to employment,
enterprise and finance; to take them from the
margins to the heart of designing better
economic systems and policy that benefit them

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and others in similar situations to them. This
includes identifying how and why the existing
neo-liberal capitalist system is perpetuating
inequality towards Muslim women and
recommending alternative economic systems
that would have a material impact on the lived
experience of Muslim women. This will
contribute to the long-term ambitious vision of
influencing systemic change across economic
policy, commercial and political strategies and
systems of the UK.
New
Economics
Foundation
(NEF)		 Empowering
Stranded
Communities		 £180,000 The New Economics Foundation wants to work
on the ground in communities heavily reliant
on high carbon employment to build local just
transition plans that tackle the climate crisis
and ensure a sustainable and resilient
economic future. These plans will be co-
designed with local communities, workers,
unions and broader civil society and will be
linked into the powerful movement for change
that is calling for urgent action on the climate
crisis in the UK. We will conduct robust
national policy development and advocacy,
interwoven with insightful framing and narrative
advice, to ensure that the places we work in
are not islands of change but the bedrock of a
national Just Transition to a sustainable and
more equal economy.
New
Economics
Foundation
(NEF)		 NEF Core 3 £200,000 Core Funding in support of NEF’s mission.
Ownership
Futures		 Just Capital:
rewiring asset
management to
drive systemic
change		 £80,000 We want to undertake a three-part project
analysing the asset management industry: its
role in shaping FTSE 350 company behaviour,
the impact of long maturity bonds issued by
fossil fuel companies on pension funds and the
sector’s role in driving corporate consolidation
during the coronavirus crisis. The modules will
present new findings and set out
recommendations to democratise asset
management and address the climate
emergency. Where possible, we will also aim
to produce topical briefing notes. Working with
partners, we aim to mainstream our findings
and recommendations to ‘insider’ policymakers
and the wider new economy movement and
enhance public understanding of the sector’s

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systemic role via advocacy, media and social
media work.
Power for
People Ltd		 The Community
Energy
Revolution - the
campaign for the
Local Electricity
Bill		 £10,000 We are campaigning for the Local Electricity
Bill to become law. This would empower
communities to set up locally renewable
energy companies, unlocking huge potential
for local economies across the UK to benefit
from a just transition to renewables. To
achieve this, we are bringing people,
community groups, councils, businesses and
national organisations together to support the
Bill and call on MPs and the government to
ensure it is enacted by Parliament. We know
that this campaign is winnable and how to win
it, as we led the campaigns for the Climate
Change Act, the Sustainable Communities Act,
the Home Energy Conservation Act, the Warm
Homes Act, the Sustainable Energy Act and
over 20 other legislative changes.
Public Interest
Research
Centre		 Emergency Core
Funding (Covid-
19 response)		 £10,000 Core funding in support of PIRC's strategy.
Resolution
Foundation		 Workertech £100,000 To create the UK’s first social investment fund
aimed at developing and growing ventures
seeking to harness technology to improve the
prospects, power and career-choices of
workers, particularly those on low-pay or in
insecure employment.
Stir To Action
Ltd		 New Economy
Programme		 £2,500 Small grant in support of Stir to Action's New
Economy training programme.
Sustain: The
alliance for
better food
and farming		 Food Systems for
1.5 degrees -
Shifting the agro-
economy to
tackle the climate
and nature
emergency		 £90,000 We are in a time of climate and nature
emergency, with land use and commodification
key drivers of ecosystem harm but also with
major opportunities to cut emissions, restore
nature and become more resilient. As with
renewable energy, good practice exists but, to
meet the Paris 1.5 degree warming limit, fairly
and sustainably, a deliberate and rapid
transition to agro-ecological production is
needed at scale, supported by new trading
models, financial incentives, appropriate
technology and major reform of the financial
relationship between farmers, citizens, retailers
and consumers. Building on prior influential
work, Sustain will play a game-changing,
catalytic role in achieving this and is uniquely
placed and highly motivated to do so.

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The Barrow
Cadbury Trust		 Fair by Design £60,000 Core Funding in support of the Fair By Design
Campaign.
The Centre for
Innovation in
Voluntary
Action		 Comedy,
Seriously?		 £5,000 We want to use humour, satire and parody to
expose the contradictions with which those in
the finance system live every day, specifically
those in large-scale asset management and
asset ownership. Our theory of change is that
by using humour to spotlight those
contradictions, we can help trigger a
transformation of the socio-economic context
of the sector, thereby changing behaviour,
including moving large sums of money to
sustainable finance.
The Green
Valleys
(Wales) CIC		 Project Skyline -
Promising Ideas
Follow on
Funding		 £6,300 Promising Ideas Funding, identified by staff, to
maximise the impact of the original successful
grant and to ensure momentum is not lost in
the search for next stage funding from the
Welsh Government.
The
Landworkers'
Alliance		 Building resilient
local food
systems:
Developing
farmer-led
innovation and
skills for direct
sales		 £144,000 We are proposing a three-year project to
develop innovation, skills and knowledge of
direct sales and local supply chains in agro-
ecological farming. The project will be based
around 4 strands of work: 1. Sharing
innovative examples of direct sales and local
supply chains models; 2. Developing new
models though collective analysis by groups of
farmers; 3. Farmer-to-farmer exchanges to
visit and learn about successful models; 4.
Direct sales and local supply chain support
through advice, handbooks and connecting
producers. Through this work we aim to
develop more innovative models for direct
sales and local supply chains in food and
farming, and to support more farmers to
transition to these kinds of approaches.
Trade Justice
Movement		 Building a UK
movement for
trade deals that
support climate
goals		 £118,000 Trade deals have the potential to support
efforts to tackle climate change but, for too
long, they have instead created barriers:
contributing to increased greenhouse gas
emissions, preventing the dissemination of
green technology and hampering
governments’ ability to develop local green
industries. Following the 2019 election, the UK
will regain full sovereignty over trade policy,
with negotiations starting in February 2020.
This provides a unique opportunity to craft
deals that are in line with UK climate
commitments, and COP26 provides an ideal

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context. The Trade Justice Movement has
developed an outline proposal to restructure
trade deals. This project will allow us to hone
our proposal and build an alliance behind a
low-carbon vision.
Wellbeing
Economy
Alliance
(WEAll)
Scotland		 Building a
wellbeing
economy		 £198,335 Scotland, a small country with huge ambition,
stands poised to accelerate the change
required to build a wellbeing economy. To
realise this ambition & ensure the pioneering
but fragmented work already underway
achieves more than the sum of its parts,
requires coordination & strategic direction.
WEAll Scotland will work with partners to
achieve this by establishing sector-specific
clusters - focal points to champion institutional
& corporate change by co-creating, testing &
lobbying for alternative policies, practices &
models within their own sectors, & by
identifying the cross-sectoral opportunities for
fundamental systems change. Through its
networks WEAll Scotland will amplify the
clusters' successes so they can be replicated
in the UK & beyond.

Building the capacity of our investees and grantees

Within our grants and investment programmes, the Foundation actively works with funded organisations. More than half of our grants this year were to organisations returning for further funding to continue their work and the Foundation made six additional commitments to unrestricted funding support for grant holders with whom we have a strategic alignment.

The core funding we offer strategically aligned organisations can be vital in helping them to develop from small organisations often dependent on a single leader to stronger organisations with a broader and more substantial management structure.

This year our capacity to connect and bring together our grant holders, investees and partners has been somewhat hampered by Covid-19, but we are working on different ways to build and maintain connections, share skills, create new networks and learn more about the work of others.

We have sought to provide support to our existing grant holders over what has been a very difficult year – flexing project timescales and outcomes and providing increased grants in some instances.

Over the year, 19 grants were concluded, and these have generated a source of invaluable learning points, including the following highlights:

Grant Making Practice

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objectives of a grant, rather than too concerned with sticking to an original plan about how it might get there.

Changing the economy

The Energy System

The Food Economy

The Investment System

1 Feed In Tariff – a payment made to energy users for renewable energy they generate. This scheme was closed to new entrants in March 2019.

2 DSOs – Distribution System Operator.

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Work and Pay

How we engage with investors through our market rate portfolio

We take an integrated approach to our mission and capital base, and use our endowment as a tool for change, including through social investments, asset manager and shareholder engagement.

We focus our efforts on strategic themes to underpin and focus our proactive work, drawn from what we have learned from or key developments in our programme areas:

Building economic resilience through engaging the energy market and support for community energy

We continue to engage the energy utilities market utilising outputs from grant recipients Forum for the Future, Influence Map and London School of Economics Grantham Institute.

The Foundation has partnered with Royal London Asset Management and Shareholders for Change to engage incumbent energy utilities to embrace the transition to decarbonised, decentralised and democratised energy (the ‘3D transition’), advocating business model resilience, just transition strategy, alignment of lobbying and community energy partnerships.

Throughout 2020, meetings have been held with Centrica, Scottish Power, EDF, RWE, EOn, and SSE.

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In response to our engagement, SSE announced at its AGM that it will adopt a formal just transition strategy that integrates socio-economic factors into the company's decarbonisation. This will be a sector first and look to mitigate negative impact and enhance opportunities for workers, communities, supply chains and consumers. We are in the process of supporting SSE to develop strategy, involving grant recipient LSE.

Engagement has also been undertaken with Drax Group, focusing upon just transition strategy and risk management. We have led engagement on behalf of eight large asset managers and asset owners, including a meeting with senior management and tour of the Drax power station in early 2020.

Direct shareholdings

In addition to investing in energy utility companies via our pooled fund investments, the Foundation buys direct shareholdings in companies we wish to influence as part of our thematic priorities. Current direct shareholdings include Centrica, Iberdrola, RWE, SSE, EDF, Drax Group and Total.

The Foundation’s social investments

Snowball Impact Management - The Foundation became the third partner to join Snowball LLP in 2017, a ground-breaking new 100% impact investment fund. In 2020, Snowball LLP restructured to create Snowball Impact Management and Fund (GP/LP structure) to allow new investors. Snowball applies a social and environmental impact lens to all its investment analysis, reporting and decisionmaking. The purpose of the new company, as embedded in its Articles, is to “change behaviours in capital markets so that all capital is invested for social and environmental as well as financial returns”. In 2017, our £2m investment in Snowball included cash and the transfer of ownership of six of our direct social investments, including Thrive Renewables, Awel wind co-op, Ethical Property Company, and Big Issue Invest – Social Enterprise Investment Fund 2.

Riding Sunbeams Apollo Ltd is a joint venture between Community Energy South, the climate charity Possible, Thrive Renewables and the Foundation. It seeks to decarbonise the transport system by developing community owned renewable energy assets and using the electricity generated to power trains and other forms of transport. Uniquely positioned to unblock barriers to community energy, it could be a catalyst for 200MW of clean energy across the UK. The company is the first to embed facilitating a just transition into its legal purpose. The Foundation invested £99,960 in 2020 for 5 percent equity. In addition, a repayable grant of £100,000 which had been awarded in March 2019 was converted to a further 3 percent equity holding.

Egni Solar Co-op is in the process of installing up to 5MW of rooftop solar on over 200 sites across Wales, including council buildings, university campuses, primary schools, community centres, breweries, and sports clubs. It is the largest ever roll-out of solar PV in Wales. Smaller sites such as primary schools and community centres will receive the energy for free as part of the co-op’s community benefit. The Foundation invested £100,000 in a community share offer.

Energy Garden Ltd is a community benefit society hoping to raise funds to develop and acquire solar PV arrays. The income generated will be used to transform 50 London Overground platforms and stations into community gardens and food growing plots and to support volunteers and youth training. Its intention is to support resilient communities, improve air quality and well-being, and raise awareness of community energy. The Foundation has invested £50,000 in a future bond offer.

Stichting Equileap Foundation is a Dutch-based foundation that has established Equileap Information Services as a way of addressing gender equality through gender lens investing. Equileap

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aims to accelerate progress towards gender equality in the workplace as a powerful lever in tackling inequality and poverty. To do this they use three strategies: knowledge – providing detailed data on each company’s gender equality performance; investing – using the data to create new, gender sensitive, financial products, and building a network of well-informed gender lens investors; and finally donations – encouraging investors to share their returns and using any net profits from this work to create a sustainable source of funding to tackle the root causes of gendered economic inequality. The Foundation invested £100,000 in 2019, as a ten-year loan.

Ethex is a non-profit ethical investment club, which has both ethical investors and ethical businesses as members. Through collaboration and the pooling of resources, it aims to promote and encourage businesses that have both social and commercial goals. It wants to make financial services more affordable and more available to ethical businesses and to ethical investors. The Foundation invested £50,000 in 2013, structured as a loan. A repayment of £10,000 was made by Ethex in October 2018.

WHO WE ARE NOW: OUR POLICIES, GOVERNANCE AND OPERATIONS

Using our resources – spending capital as well as income

Trustees believe that the challenges, facing the world and our society in it, are formidable. Creating a responsive resilient economic system that forms part of the solution to these challenges will require all our effort and resources to achieve. Considering this, Trustees took the decision that the Foundation can spend its capital as well as its income in pursuit of our mission. Trustees actively review both strategy and resources to manage the risk of this approach.

Ethical investment policy

In September 2019, we updated our investment policy and principles, setting out our approach to generating social and environmental returns in our market-rate portfolio. It includes: “areas that we will particularly favour in our investments wherever possible; areas where will use our influence as a shareholder, working alone and with other investors, to encourage changes in corporate practices that serve our mission; and areas and corporate practices in which we will not invest because we judge that they are profoundly inconsistent with our mission”. Our funds are in responsible investment funds that are screened and undertake shareholder engagement activity.

Trustees, taking into account the cash flow requirements, potential investment funds, the cost of fund management and their decision to invest ethically, invest the Foundation's portfolio in a range of funds managed by the BMO Asset Management Limited: Responsible Global Equity Fund (Inc) (Share Class 4), Responsible Sterling Bond Fund (Inc) (Share Class 2), and the Responsible UK Equity Growth Fund (Inc) (Share Class 4). The Foundation maintains a facility to deposit cash it does not immediately require for operational purposes with Triodos Bank NV, thereby seeking to ensure the ethical management of the Foundation’s cash as well as its investments.

The top 20 investments in our BMO Asset Management funds at September 2020 are:

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Trustees have developed our thinking about our priorities in terms of investment as well as our policy relating to climate change; the full outline of our investment beliefs and policies are available on our website. We continue to work with other trusts and foundations in the Charities Responsible Investment Network, which is a project of ShareAction UK, supporting a growing number of trusts interested in being more effective stewards of our resources. We are also members of a wider network of charities and other organisations in the Church Investors Group, supported by CCLA, and Shareholders for Change.

New investment manager tender

In January 2020, the Foundation launched an investment manager tender to increase the endowment’s impact and contribution to our mission.

The Foundation wished to appoint a second asset manager that will operate in parallel with BMO Global Asset Management and manage £10m of the endowment. We joined Joffe Trust and Blagrave Trust to seek a new manager together and offer a total investment mandate of £33.5m.

We launched a public Request for Proposals and selection process, dubbed the ‘ESG Investing Olympics’, and received 59 proposals. A short-list of five managers were invited to present at the Royal Institution, London, on 3rd March 2020 to an audience of trustees, mission-led asset owners (charities, churches, universities, and pensions), and grant recipients with an interest in sustainable finance, e.g. ShareAction.

The Foundation took this approach to:

After much deliberation, Trustees selected Cazenove as the winner, with its proposal to launch a new, publicly available, multi-asset ‘best in sector’ ESG fund. The £33.5m mandate will act as seed funding for a new unit trust to be launched in February 2021.

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Climate risk and our investments

Whilst the Foundation is not primarily focused on environmental concerns, Trustees are mindful of the view of a wide range of experts that climate risk is arguably the biggest risk to economies today.

We wish to safeguard the Foundation's capital with regards to both stranded asset risk (meaning, risk to particular sectors that are carbon-intensive) but potentially even more important, climate-related systemic risk or risk arising from general economic damage. Trustees understand that climate-related systemic risk could have a highly negative impact not only on the Foundation’s assets but also its core mission and stakeholders through disruption of the financial system, with implications for jobs, incomes and inequality. They therefore seek to do whatever they reasonably can to progress a rapid transition to a low-carbon economy.

Social investment policy

In 2013, Trustees agreed that up to 10% of the investible funds could be invested into instruments to which the Foundation’s general charitable objectives and specific programme aims could be applied. The primary aim of social investments is to pursue the Foundation’s broad charitable objectives and focused programmatic objectives using financial instruments other than grants. The secondary aim of social investments is to produce a financial return. Trustees are prepared to consider accepting a higher level of risk or a lower level of financial return than the market norm, especially for those social investments that are closely aligned with the Foundation’s specific programme aims. For investments that generate broader positive social impact and meet the Foundation’s general charitable objectives but without specific alignment with programme aims, Trustees might look for levels of risk and return that are closer to the benchmark for that asset class.

Management and advice

During the year, Bank of Montreal (“BMO”) continued to act as investment managers with discretion to manage the Foundation’s funds within agreed investment objectives in terms of asset allocation and investment performance. BMO, through its group operations, ensures that all the shareholdings of the Foundation are voted at the general meetings of investee companies in accordance with their established corporate governance guidelines. Foundation staff and Trustees are in active discussion with BMO on the further development of those guidelines. To support Foundation staff and Trustees in their commitment to the responsible use of its assets and as a means of sharing our practice, the Foundation is a member of the Charities Responsible Investment Network.

Peter Jones, an independent investment advisor, continued to provide general investment advice to the Trustees, who instruct BMO to consider reflecting that advice in their management of the Foundation’s assets. Trustees are grateful for his continued support of our work.

Wrigley’s Solicitors LLP was retained to provide legal advice on direct investment documentation, advice on our general charitable activities and support for HR functions.

Communications and Convening

The Foundation holds a strong belief in the power of communications and convening – of bringing people together and giving a space to the ideas of others - and during the year we sought to keep connected with likeminded individuals and our partners in the sector and to share a variety of voices and views in our communications.

Our annual conference took place in October at the historic venue, Toynbee Hall, London, and was well received by delegates, providing a welcome opportunity to further pursue the theme of how we

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can work together to develop a fair economy. Grant holders, partners and investees had the chance to network, meet the Friends Provident Foundation staff team and Trustees, and to share approaches and ideas. The conference programme included a briefing on our new programme, Developing a Fair Economy, and shone the light on our focus areas of diversity, ownership, and fair transition to a new economic model, illustrated through the lens of our grant holders’ work.

At the start of the year, we ran a campaign to recruit new Trustees to the Foundation, successfully communicating an important message that we were particularly sought perspectives that would challenge orthodox views.

In March we began implementation of a new communications plan to support the appointment of a second asset management company. This came to fruition in the ESG Investing Olympics, an event which took place to some acclaim at the Royal Institution, London, shortly before the Covid-19 lockdown began. Five shortlisted companies presented their credentials to a panel and an audience of around 100 delegates, and communications were extended more widely through media coverage and social media.

Shortly after this, the global pandemic hit and, as we took stock, it became clear that the need for a strong digital provision had accelerated. With social media and tech becoming ever essential, the Foundation’s Twitter was used to not only to share key messages around a fair economy for all but also to show our solidarity with, and to, the community we serve. We tried to keep our social media ‘social’, often using the voices of our team to share our content.

We also reviewed our website and took the opportunity to consider whether it worked well for our audiences, and how we might enhance functionality, performance and presentation, in the knowledge that an active and vibrant digital media presence is key to attracting support, building relationships, connecting with likeminded individuals and sharing messages.

During the summer, FT journalist Martin Sandbu, published his book The Economics of Belonging with the support of the Foundation’s increasingly well-regarded Journalist Fellowship programme, offering successful applicants financial and editorial support over one year to produce a body of work that communicates alternative, economically coherent ideas in an engaging way. Although many of the launch events for The Economics of Belonging were cancelled, there was nevertheless an impressive line-up of virtual events to an impressively international audience.

As the Foundation’s communications year drew to a close, we found ourselves similarly turning to the prospect of virtual events as we considered our own convening options against the continuing backdrop of the pandemic.

Reports published in 2019-20 Publications

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THE FUTURE – OUR PLANS FOR 2020-21

Our objectives for the next year cascade from our purpose. These corporate objectives are intended to guide our team objectives and ultimately individual objectives.

  1. To deepen our outward focus and collaboration to connect more effectively with others in the field to achieve our mission.

  2. To support individual staff resilience and productivity to achieve personal and organisational objectives.

  3. To develop effective team working approaches across a range of contexts.

  4. To support resilience in our stakeholder organisations, including reflecting on the role of our funds, though grants, investments, and contracts.

  5. To strengthen the integration of investment in our strategy and wider ways of working.

  6. To develop metrics and monitoring methods to track progress towards a fair economy.

  7. To ensure our new approaches are developed alongside our on-going climate emergency commitment and are congruent with diversity and equity.

Risk management

The Trustees are responsible for overseeing the effective management of the Foundation and for safeguarding its assets. Risk management is an ongoing activity involving all Trustees and is reviewed by Trustees at least annually. During the year, the Trustees have reviewed the risks facing the Foundation covering governance and management issues, financial, regulatory, legal and operational risks. Mitigating actions have been taken regarding the major risks that have been identified, namely:

Main risk Likelihood/
Risk
appetite		 Controls
Fall in investment income due
to market conditions and
impact on grant activities.		 High -
take action		 The Foundation holds sufficient cash reserves to
cover expenditure over a three-month period.
Loss of key staff for an
extended period or key staff
leave.		 Medium -
take action		 The Foundation has detailed procedures for key
functions and ensures staff are trained in a
number of business areas.
Foundation reputation
damaged by website or
publications.		 Low - tolerate The Foundation website is staff controlled and
all publications are edited and reviewed in-
house.
Actions of an associated
organisation which result in
bad publicity or affect the
Foundation's reputation.		 Medium -
tolerate		 The Foundation assesses all external
commitments in terms of governance; we have
clear terms and conditions of support in place. It
is a standard risk for funders.

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Organisations fail to meet their
project objectives.		 Medium -
tolerate		 The Foundation actively manages grants and
investments to give them the best chance of
success.
Foundation fails to meet its
stated objectives.		 Medium -
tolerate		 The Foundation actively manages its own
performance and has a dedicated budget for
evaluation.
Cash in the bank accounts is
insufficient to meet the levels
of spending.		 Low -
take action		 The Foundation actively manages its cash
requirements and has increased its in-house
finance resource.
Prolonged IT infrastructure
failure resulting in inaccessible
data.		 Low –
tolerate		 Cloud-based systems reduce the impact of such
infrastructure failure.
Uncertainty in the investment
environment due to Brexit and
the Covid-19 pandemic.		 Medium -
take action		 Independent investment advice has been taken.
Additional cash funds are being held to ensure
that the Foundation can meet its commitments
should Brexit or the pandemic have a significant
negative effect on the investment environment.
Bank balances exceed sums
covered by the Financial
Services Compensation
Scheme (FSCS).		 Medium -
tolerate		 Foundation cash balances are held in reputable
Prudential Regulation Authority (PRA) regulated
banks. There is a need to tolerate the risk as
monthly payments exceed the FSCS
compensation levels.

Each risk identified was assessed in terms of the potential impact and likelihood of occurrence and the Trustees confirm that they believe that, for each of these risks, appropriate controls are in place to mitigate the significant risks to an acceptable degree.

Reserves and going concern

The total charity funds at the year-end of £28.81m (2019: £30.96m) were held in the endowment fund. The capital comprising the Foundation's expendable endowment is the principal source of income to meet the Foundation’s objectives and running costs. The Trustees consider that there are no material uncertainties about the Foundation’s ability to continue as a going concern.

In April 2016, Trustees took the strategic decision to expend capital from the endowment in pursuit of our mission. In order to ensure there are adequate funds to support a potentially higher level of expenditure, the Foundation adopted a policy to ‘draw down’ a sum from the endowment each year to match the difference between our projected income and our projected expenditure as set by Trustees in the annual business planning process.

Trustees also recognise that Foundation income from investments can fall. To mitigate this risk, it is the Trustees’ intention to hold three months’ operating costs as a cash reserve; estimated at £750,000. This is held as part of Foundation funds and will not be expended although Trustees do not consider it necessary to have a separate reserves account.

The reserves policy was last reviewed and approved by the Trustees in September 2020. Trustees will continue to review the level of reserves taking into consideration the cost base of the Foundation.

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Financial review

The Foundation’s income is derived from investment performance. Total income for the year ended 30 September 2020 was £574,700 (2019: £815,103), mainly attributable to dividends and interest received from the principal investments – open-ended investment trusts with underlying investments in equities and corporate bonds. The fall in income this year was a result of the Covid-19 pandemic which led to companies reducing or stopping their dividend payments for a time during the year. The total expenditure for the year was £2,874,989 (2019: £3,431,991). Of this, grant commitments amounted to £2,327,488 (2019: £2,940,496) and other expenditure was £547,501 (2019: £491,495). Net expenditure for the year was £2,300,289 (2019: £2,616,888) before investment gains of £144,345 (2019: £1,416,065), leading to net expenditure of £2,155,944 (2019: Net expenditure of £1,200,823).

As per our investment policy, Trustees expect our mainstream portfolio to produce competitive market returns, as well as reflecting our investment beliefs. Regular reviews of performance by the Investment Committee and advice from our Investment Advisor indicates that performance is in line with market expectations.

Remuneration of staff

Trustees have adopted and reviewed the pay policy that is applied to all staff members.

Trustees adjusted the measures against which salaries are reviewed annually to ensure a reasonable reflection of the cost of living. This is now one which reflects a cost-of-living measure weighted equally with average wages.

Reflecting our programme focus on pay transparency and in line with NCVO guidance, the ratio between the highest salary (£86,520) and the median salary (£34,982) in the Foundation is 2.5:1. The ratio of the top salary to the lowest is 3.9:1. These calculations are based on Full Time Equivalent salaries, net of salary sacrifice deductions.

The charity made contributions to an employee’s personal pension plan based on a fixed percentage of salary. In September 2014, Trustees established a company pension scheme in which contributions are made to NEST.

Statement of fundraising practice

The Foundation does not engage in public fundraising and does not use professional fundraisers or commercial participators. The Foundation, nevertheless, observes the relevant fundraising regulations and codes. During the year there were no instances of non-compliance with these regulations and codes and the Foundation received no complaints relating to its fundraising practice.

Governance arrangements – how we organise our work

A Board of Trustees, of up to ten individuals who must hold at least two meetings each year, administers and controls the Foundation and has control of its property and funds. Trustees are subject to fixed-term appointments as set out in the Memorandum and Articles of Association dated 1 June 2001. During the year, Trustees have formally met four times.

The Trustees have complied with the duty in Section 17 of The Charities Act 2011 to have due regard to the Charity Commission’s published guidance concerning the operation of the Public Benefit requirement under that Act.

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The role of Trustees

An individual induction programme is in place and implemented for new Trustees, covering all relevant aspects of the role and the Foundation. Training opportunities relating to grant-making are also made available to Trustees through the Association of Charitable Foundations Trustee network.

The role of the Trustees includes setting strategic direction and agreeing the financial plan, approving grant-making applications and monitoring the Foundation’s grant activities, ensuring that all activities are within its agreed charitable objectives and pursued for the public benefit. Matters reserved for the Trustees are approved by the Trustees and are subject to annual review.

Trustees act on advice and information from regular meetings with the Director and their appointed advisers and from the Foundation’s Resources Committee and Investment Committee under terms of reference approved by the Board of Trustees.

Recruitment of Trustees

Trustees are recruited through advertisement in national and local press, through professional networks and the community of organisations we support. They are interviewed by a panel of existing Trustees against a set of advertised criteria and with due regard to the Foundation’s commitment to equality of opportunity and fair treatment. We monitor the response to all vacancies in terms of gender, ethnicity and disability. Appointed by the serving Trustees, the recruitment and appointment of new Trustees is fully discussed at meetings of the full Board of Trustees.

Statement of responsibilities of the Trustees

The Trustees (who are also directors of Friends Provident Charitable Foundation for the purposes of company law) are responsible for preparing the report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the income and expenditure of the charitable company for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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In so far as the Trustees are aware:

The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Members of the charity guarantee to contribute an amount not exceeding £1 to the assets of the charity in the event of winding up. The Trustees have no beneficial interest in the charity.

The report of the Trustees has been prepared in accordance with the special provisions applicable to companies subject to the small companies’ regime.

Approved by the Trustees on 9 March 2021 and signed on their behalf by

Stephen Muers, Chair of Trustees

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS

Opinion

We have audited the financial statements of Friends Provident Charitable Foundation (the ‘charitable company’) for the year ended 30 September 2020 which comprise the statement of financial activities, balance sheet, statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS

Other information

The other information comprises the information included in the report of the trustees other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the report of the trustees.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS

Responsibilities of trustees

As explained more fully in the statement of responsibilities of the trustees set out in the report of the trustees, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

35

FRIENDS PROVIDENT CHARITABLE FOUNDATION

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Use of our report

This report is made solely to the charitable company's members as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members 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 charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jonathan Orchard (Senior statutory auditor)

9 March 2021

for and on behalf of Sayer Vincent LLP, Statutory Auditor

Invicta House, 108-114 Golden Lane, LONDON, EC1Y 0TL

36

Friends Provident Charitable Foundation

Statement of financial activities (incorporating an income and expenditure account)

For the year ended 30 September 2020

For theyear ended 30 September 2020
Note
Income from:
2
3
11
Reconciliation of funds:
Total funds carried forward
Net movement in funds
Total funds brought forward
Net gains on investments
Raising funds
Total expenditure
Net expenditure before net gains on
investments
Charitable activities
Support for Resilient Economies
Investments
Total income
Expenditure on:		 2020
Total
£
574,700
574,700
15,155
2,859,834
2,874,989
144,345
(2,155,944)
30,964,989
28,809,045
(2,300,289)		 2019
Total
£
815,103
815,103
6,352
3,425,639
3,431,991
1,416,065
(2,616,888)
(1,200,823)
32,165,812
30,964,989

All funds are unrestricted in both periods.

All of the above results are derived from continuing activities. There were no other recognised gains or losses other than those stated above. Movements in funds are disclosed in Note 17 to the financial statements.

37

Friends Provident Charitable Foundation

Company no. 04228843

Balance sheet

As at 30 September 2020
Note
Fixed assets:
10
11
12
Current assets:
13
Liabilities:
14
15
17a
Total unrestricted funds
Listed Investments
Total assets less current liabilities
Debtors
Unrestricted income funds:
Designated funds
The funds of the charity:
Creditors: amounts falling due within one year
Net current liabilities
Total net assets
Creditors: amounts falling due after one year

Cash at bank and in hand
Tangible assets
Social Investments
General funds
Total charity funds		 £
113,704
1,376,465		 2020
£
3,668
29,001,907
2,449,960		 £
150,263
772,943		 2019
£
3,897
32,507,627
2,300,000
31,455,535
(1,429,876)		 34,811,524
(2,099,080)
1,490,169
(2,920,045)		 923,206
(3,022,286)
45,000
28,764,045		 -
30,964,989
30,025,659
(1,216,614)		 32,712,444
(1,747,455)
28,809,045 30,964,989
28,809,045 30,964,989
28,809,045 30,964,989

Approved by the Board of Trustees on 9 March 2021 and signed on their behalf by:

Stephen Muers Chair of Trustees

38

Friends Provident Charitable Foundation

Statement of cash flows

For the year ended 30 September 2020

For theyear ended 30 September 2020
Note
Cash flows from operating activities
Net expenditure for the reporting period
(as per the statement of financial activities)
Depreciation charges
Loss on disposal of fixed assets
Gains on investments
Dividends, interest and rent from investments
(Increase)/Decrease in debtors
Increase/(Decrease) in creditors
Net cash used in operating activities
a
Cash held as part of investment portfolio
Cash at bank and in hand
a
Total cash and cash equivalents
Analysis of cash and cash equivalents and of net debt
Cash and cash equivalents at the end of the year
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the
year
Net cash provided by investing activities
Cash flows from investing activities:
Dividends, interest and rents from investments
Purchase of fixed assets
Proceeds from sale of investments
Conversion of investment to grant funding
Purchase of investments		 £
£
(2,155,944)
2,976
164
(144,345)
(574,700)
36,559
(633,082)
(3,468,372)
574,700
(2,911)
3,659,630
(214,924)
50,000
4,066,495
598,123
840,201
1,438,324
At 1 October
2019
Cash flows
£
£
67,258
(5,399)
772,943
603,522
840,201
598,123
2020		 £
£
(1,200,823)
2,851
-
(1,416,065)
(815,103)
18,895
141,535
(3,268,710)
815,103
(579)
2,814,492
(130,158)
-
3,498,858
230,148
610,053
840,201
Other non-
cash
changes
At 30
September
2020
£
£
61,859
1,376,465
1,438,324
2019
(3,468,372)
4,066,495		 (3,268,710)
3,498,858
At 1 October
2019
£
67,258
772,943		 Other non-
cash
changes
£
598,123
840,201		 230,148
610,053
1,438,324 840,201
Cash flows
£
(5,399)
603,522		 At 30
September
2020
£
61,859
1,376,465
840,201 598,123 1,438,324

39

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

Friends Provident Charitable Foundation is a charitable company limited by guarantee and is incorporated in the United Kingdom.

The registered office address and principal place of business is Blake House, 18 Blake Street, York, YO1 8QG.

b) Basis of preparation

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) - (Charities SORP FRS 102), The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy or note.

In applying the financial reporting framework, the trustees have made a number of subjective judgements, for example in respect of significant accounting estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The nature of the estimation means the actual outcomes could differ from those estimates. Any significant estimates and judgements affecting these financial statements are detailed within the relevant accounting policy below.

The charity meets the definition of a public benefit entity under FRS 102.

The trustees do not consider that there are any sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period. Trustees are aware that there are net current liabilities but this is principally down to timing and the fact that liabilties are recognised in full for the following 12 months but there is no correcsponding income recognised. In addition, the Foundation has significant resources available in fixed asset investments which can be drawn down as required to fund working capital.

e) Income

Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the income have been met, it is probable that the income will be received and that the amount can be measured reliably.

f) Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

40

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

Designated funds are unrestricted funds earmarked by the trustees for particular purposes.

Endowment funds represent the investment assets derived from the donation of £20 million from Friends Provident plc in 2004. The endowment is expendable at the discretion of the trustees.

h) Expenditure and irrecoverable VAT Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings:

Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.

Provisions for grants are made when the intention to make a grant has been communicated to the recipient but there is uncertainty about either the timing of the grant or the amount of grant payable.

Resources expended are allocated to the particular activity where the cost relates directly to that activity. However, the cost of overall direction and administration of each activity, comprising the salary and overhead costs of the central function, is apportioned on the following basis which are an estimate, based on staff time, of the amount attributable to each activity.

Where information about the aims, objectives and projects of the charity is provided to potential beneficiaries, the costs associated with this publicity are allocated to charitable expenditure.

Support and governance costs are allocated in full to charitable activities - Support for Resilient Economies projects.

Governance costs are the costs associated with the governance arrangements of the charity. These costs are associated with constitutional and statutory requirements and include any costs associated with the strategic management of the charity’s activities.

41

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

k) Operating leases

Rental charges are charged on a straight line basis over the term of the lease.

l) Tangible fixed assets

Depreciation is provided at rates calculated to write down the cost of each asset to its estimated residual value over its expected useful life. The depreciation rates in use are as follows:

4 years

m) Listed investments

Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing

quoted market price. Any change in fair value will be recognised in the statement of financial activities. Investment gains and losses, whether realised or unrealised, are combined and shown in the heading “Net gains/(losses) on investments” in the statement of financial activities. The charity does not acquire put options, derivatives or other complex financial instruments.

n) Social Investments

Social investments are valued at their fair value. Where fair value is not practicable, social investments are recognised at cost less impairment.

o) Debtors

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

p) Cash at bank and in hand

Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

q) Creditors and provisions

Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

42

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

1 Accounting policies (continued)

r) Financial instruments

s) Pensions

The Foundation operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Foundation in an independently administered fund. The pension cost charge represents contributions payable under the scheme by the Foundation to the fund. The Foundation has no liability under the scheme other than for the payment of those contributions.

2 Income from investments

Income from investments
Gross dividends
Bank interest
Income from social investments		 2020
Total
£
574,343
-
357		 2019
Total
£
807,079
7,117
907
574,700 815,103

All income from investments is unrestricted.

43

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

3a Analysis of expenditure (current year)

Charitable activities

Charitable activities
Investment manager's fees
Investment advice & other costs
Grant commitments
Staff costs (Note 6)
Staff training, expenses & other related costs
Grant advisory group, assessors & grantee support
Performance evaluation
Communication, dissemination & website costs
Overhead costs
Investment engagement fees
Legal & professional fees
Auditor's remuneration
Trustee meetings & expenses
Support costs
Governance costs
Total expenditure 2020
Total expenditure 2019		 Raising
funds
£
2,563
12,592
-
-
-
-
-
-
-
-
-
-
-
15,155
-
-
15,155
6,352		 Support for
Resilient Economies
projects
£
-
-
2,327,488
-
-
-
-
-
-
-
-
-
-
2,327,488
472,505
59,841
2,859,834
3,425,639		 Governance
costs
£
-
-
-
41,918
-
-
-
-
-
-
-
9,056
8,867
59,841
-
(59,841)
-
-		 Support
costs
£
-
-
-
237,538
26,533
5,650
1,000
73,839
61,451
37,615
28,879
-
-
472,505
(472,505)
-
-
-		 2020 Total
£
2,563
12,592
2,327,488
279,456
26,533
5,650
1,000
73,839
61,451
37,615
28,879
9,056
8,867
2,874,989
-
-
2,874,989		 2019
Total
£
5,020
1,332
2,940,496
270,903
49,286
12,344
-
34,299
59,944
23,023
13,340
10,181
11,823
3,431,991
-
-
3,431,991

44

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

3b Analysis of expenditure (prior year)

Charitable activities

Charitable activities
Investment manager's fees
Investment advice & other costs
Grant commitments
Staff costs (Note 6)
Staff training, expenses & other related costs
Grant advisory group, assessors & grantee support
Performance evaluation
Communication, dissemination & website costs
Overhead costs
Investment engagement fees
Legal & professional fees
Auditor's remuneration
Trustee meetings & expenses
Support costs
Governance costs
Total expenditure 2019		 Raising
funds
£
5,020
1,332
-
-
-
-
-
-
-
-
-
-
-
6,352
-
-
6,352		 Support for
Resilient Economies
projects
£
-
-
2,940,496
-
-
-
-
-
-
-
-
-
-
2,940,496
422,503
62,640
3,425,639		 Governance
costs
£
-
-
-
40,636
-
-
-
-
-
-
-
10,181
11,823
62,640
-
(62,640)
-		 Support
costs
£
-
-
-
230,267
49,286
12,344
-
34,299
59,944
23,023
13,340
-
-
422,503
(422,503)
-
-		 2019 Total
£
5,020
1,332
2,940,496
270,903
49,286
12,344
-
34,299
59,944
23,023
13,340
10,181
11,823
3,431,991
-
-
3,431,991

45

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

For the year ended 30 September 2020
4
Grant making (current year)
Grants payable at the start of the year
Grant commitments made in the year
Grants (written back) or adjusted
Net grants committed in the year
Grants paid
Grants payable at the end of the year
Creditors: amounts due within one year
Creditors: amounts due in over one year
Total creditors at the end of the year
Grant payments converted to social investment		 2020
£
4,735,395
2,293,839
33,649		 2019
£
4,472,913
2,992,030
(51,534)
2,327,488
(3,064,581)
100,000		 2,940,496
(2,678,014)
-
4,098,302 4,735,395
2,881,688
1,216,614		 2,987,940
1,747,455
4,098,302 4,735,395

Details of the grant commitments made in the year can be found in the Trustees' Annual Report.

5 Net income / (expenditure) for the year

This is stated after charging / (crediting):

This is stated after charging / (crediting):
2020
2019
£
£
2,976
2,851
19,200
19,200
7,500
7,400
2020
2019
£
£
221,103
216,328
17,628
17,710
40,127
35,673
598
1,192
279,456
270,903
Staff costs were as follows:
Operating lease rentals payable:
Auditor's remuneration (excluding VAT):
Depreciation
Other forms of employee benefits
Analysis of staff costs, trustee remuneration and expenses, and the cost of key management personnel
Salaries and wages
Property
Social security costs
Employer’s contribution to defined contribution pension schemes
Audit		 2020
£
2,976
19,200
7,500		 2019
£
2,851
19,200
7,400
279,456 270,903

6 Analysis of staff costs, trustee remuneration and expenses, and the cost of key management personnel

46

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

The following number of employees received employee benefits (excluding employer pension costs and employer's national insurance) during the year between:

2020 2019
No. No.
£60,000 - £69,999 1 1

The total employee benefits (including pension contributions and employer's national insurance) of the key management personnel were £227,775 (2019: £221,439).

The charity trustees were neither paid nor received any other benefits from employment with the charity in the year (2019: £nil). No charity trustee received payment for professional or other services supplied to the charity (2019: £nil).

Trustees' expenses represents the payment or reimbursement of travel and subsistence costs totalling £1,232 (2019: £3,194) incurred by 10 (2019: 9) members relating to attendance at meetings of the trustees.

7 Staff numbers

The average number of employees (head count based on number of staff employed) during the year was 7.8 (2019:7.3). The full time equivalent number of staff was 5.8 (2019: 5.5).

8 Related party transactions

Due to the nature of the Foundation's operations and the composition of the trustee board and staff and their charitable interests, it is possible that the Foundation will make a donation to a charity in which a trustee or staff member may have a governance interest. In recognition of this possibility, trustees have developed a policy of disclosure to ensure there is no conflict of interest and that such a donation is made at arm's length.

During this year a grant of £80,000 was made to Fairshare Educational Foundation (Share Action) to develop a legislative case for responsible investment in the run up to the COP26 event. Paul Dickinson is a trustee of both organisations and became Chair of Share Action in November 2018.

Two new trustees appointed in April 2020 are also trustees of organisations receiving funding from the Foundation. Ann Don Bosco is a trustee at Economy and Priya Lukka is a trustee at The Equality Trust. (The current funding was awarded in September 2019 and March 2018 respectively.)

The following related party transactions were identified from previous years where the grants have still been live during this year:

The individuals mentioned above did not take part in the funding/investment decisions involving their related parties.

There are no donations from related parties (2019: None) which are outside the normal course of business and no restricted donations from related parties (2019: None).

9 Taxation

The charity is exempt from corporation tax as all its income is charitable and is applied for charitable purposes.

47

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

For the year ended 30 September 2020
10
All of the above assets are used for charitable purposes.
Additions in year
Disposals in year
Tangible fixed assets
Cost
At the start of the year
At the end of the year
At the start of the year
Depreciation
Eliminated on disposal
At the end of the year
Net book value
At the start of the year
Charge for the year
At the end of the year		 Computer
equipment
£
11,405
2,911
(1,306)		 Total
£
11,405
2,911
(1,306)
13,010 13,010
7,508
2,976
(1,142)		 7,508
2,976
(1,142)
9,342 9,342
3,668 3,668
3,897 3,897

11 Listed investments

11
Listed investments
12
Fair value at the start of the year
Cash
Social investments
UK Common investment funds
Shares listed on the London Stock Exchange
Investments comprise:
Cash held by investment broker pending reinvestment
Disposal proceeds
Fair value at the end of the year
Value at the end of the year
Impairment reversal/(charge)
Additions at cost
Net gain on change in fair value
Additions at cost
Value at the start of the year
Disposal proceeds
Conversion of Energy Gardens investment to grant funding		 2020
£
32,440,369
14,964
(3,659,630)
144,345		 2019
£
33,808,638
30,158
(2,804,492)
1,406,065
28,940,048
61,859		 32,440,369
67,258
29,001,907 32,507,627
2020
£
28,897,376
42,672
61,859		 2019
£
32,397,137
43,232
67,258
29,001,907 32,507,627
2020
£
2,300,000
199,960
-
-
(50,000)		 2019
£
2,200,000
100,000
10,000
(10,000)
-
2,449,960 2,300,000

48

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

For the year ended 30 September 2020
13
14
15
16a
Accrued income
Grants payable - within 1 to 5 years
Other debtors
Prepayments
Debtors
Other creditors
Accruals
Creditors: amounts falling due after one year
Analysis of net assets between funds (current year)
Grants payable
Creditors: amounts falling due within one year		 2020
£
1,500
5,666
106,538		 2019
£
1,500
6,080
142,683
113,704 150,263
2020
£
2,881,688
168
38,189		 2019
£
2,987,940
3,571
30,775
2,920,045 3,022,286
2020
£
1,216,614		 2019
£
1,747,455
1,216,614 1,747,455
16a
Analysis of net assets between funds (current year)
16b
Net assets at 30 September 2020
Investments
Net current liabilities
Tangible fixed assets
Analysis of net assets between funds (prior year)
Long term liabilities		 General
unrestricted
£
3,668
31,451,867
(1,474,876)
(1,216,614)		 Designated
£
-
-
45,000
-		 Total funds
£
3,668
31,451,867
(1,429,876)
(1,216,614)
28,764,045 45,000 28,809,045
Analysis of net assets between funds (prior year)
Net assets at 30 September 2019
Net current assets
Investments
Long term liabilities
Tangible fixed assets		 General
unrestricted
£
3,897
34,807,627
(2,099,080)
(1,747,455)		 Designated
£
-
-
-
-		 Total funds
£
3,897
34,807,627
(2,099,080)
(1,747,455)
30,964,989 - 30,964,989

49

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

17a Movements in funds (current year)

e year ended 30 September 2020
Movements in funds (current year)
Total designated funds
General funds
Unrestricted funds:
Designated funds:
Total funds
Index of Foundation Diversity,
Transparency and Accountability		 At 1
October
2019
£
-		 Income &
gains
£
-		 Expenditure
& losses
£
-		 Transfers
£
45000		 At 30
September
2020
£
45,000
- - - 45,000 45,000
30,964,989 719,045 (2,874,989) (45,000) 28,764,045
30,964,989 719,045 (2,874,989) - 28,809,045

All funds held during both the current and prior years were unrestricted funds. The narrative to explain the purpose of each designated fund is given at the foot of the note below.

17b Movements in funds (prior year)

Movements in funds (prior year)
At 1 At 30
October Income & Expenditure September
2018 gains & losses Transfers 2019
£ £ £ £ £
Unrestricted funds:
Designated funds:
Ideas Development Fund 20,000 - - (20,000) -
Total designated funds 20,000 - - (20,000) -
General funds 32,145,812 2,231,168 (3,431,991) 20,000 30,964,989
Total funds 32,165,812 2,231,168 (3,431,991) - 30,964,989

Purposes of designated funds

Index of Foundation Diversity, Transparency and Accountability: The aim is to create an index to assess and report on how independent trusts and foundations in the UK compare to each other in relation to good governance practice and transparency. Friends Provident Foundation will contribute to this and coordinate a group of other foundations who will also contribute funding and expertise to shape the index.

Ideas Development Fund: This was a designated fund from which to commission research to develop programme ideas proposed by trustees at their Away Day in 2016. Four projects were funded during 2018-19 from the following organisations: Perspectiva, the Runnymede Trust, Sustain and the University of Birmingham. The four grant commitments amounted to £16,980.

50

Friends Provident Charitable Foundation

Notes to the financial statements

For the year ended 30 September 2020

18 Operating lease commitments payable as a lessee

The charity's total future minimum lease payments under non-cancellable operating leases is as follows for each of the following periods


following periods
Less than one year
One to five years
Over five years		 2020
2019
£
£
19,200
17,600
17,600
-
-
-
36,800
17,600
Property
36,800 17,600

19 Legal status of the charity

The charity is a company limited by guarantee and has no share capital. The liability of each member in the event of winding up is limited to £1.

51