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2020-12-31-accounts

Charity Registration No. 1164682

Company Registration No. 09802468 (England and Wales)

THE STONE FAMILY FOUNDATION

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

THE STONE FAMILY FOUNDATION

LEGAL AND ADMINISTRATIVE INFORMATION

Trustees Mr John Stone (Chairman) Mr C H Edwards Mr D J Steinegger Miss S N Edwards (Resigned 15 September 2020) Charity number 1164682 Company number 09802468 Auditor Buzzacott LLP 130 Wood Street London EC2V 6DL

THE STONE FAMILY FOUNDATION

CONTENTS

Page
Trustees' report 1 - 8
Statement of trustees' responsibilities 9
Independent auditor's report 10 - 13
Statement of financial activities 14
Balance sheet 15
Statement of cash flows 16
Notes to the financial statements 17 - 27

THE STONE FAMILY FOUNDATION

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT)

FOR THE YEAR ENDED 31 DECEMBER 2020

The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 December 2020. The trustees have adopted the provisions of 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).

The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's applicable laws, the Companies Act 2006 and “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)".

Objectives and activities

Charitable objectives

The charity's principal objective is as follows:

To relieve persons, in any part of the world, who are in conditions of need, hardship or distress (including starvation, sickness or any disability or affliction) and primarily, but not exclusively, when such need, hardship, or distress is the result of local, national, or international disaster, war or civil disturbance or by reason of their social and economic circumstances.

In furtherance of the objects the trustees may make grants, donations and social investments to and in such institutions, foundations and trusts as they think fit, that are exclusively charitable according to the law of England and Wales.

When setting the objectives and planning the work of the charity for the period, the trustees have given careful consideration to the Charity Commission's general guidance on public benefit.

Investment policy

There are no restrictions on the charity's power to invest. The investment strategy is agreed between the trustees and the investment managers and is regularly reviewed. This is the subject of a policy statement which has been completed by the trustees and forms an integral part of the agreement with the investment managers to provide investment management services.

The more significant principles in the statement are: - to invest with a long-term time horizon; and

In order to achieve these objectives, the investment managers agree an appropriate level of risk for the portfolio and determine a suitable asset allocation. For each asset class, there is a range around the proposed allocation to allow the investment managers to take action in light of prevailing or expected economic and market conditions. The performance of the portfolio is assessed against a composite benchmark established utilising the agreed index for each of the asset classes selected.

The fundamental aim of the investment strategy is to achieve a target return agreed with the trustees and allowing for the current economic climate.

The investment managers regularly report to and meet with the trustees to provide information regarding the performance of the portfolio, comparison against the benchmark and general market issues.

THE STONE FAMILY FOUNDATION

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

In addition to these asset classes there will be holdings of cash, fixed income, commodities and unconstrained investments. The fundamental aim of the investment strategy is to achieve a target return agreed with the trustees and allowing for the current economic climate.

The investment managers regularly meet with the trustees to provide information regarding the performance of the portfolio, comparison against the benchmark and general market issues.

Grant making policy

In pursuance of its objectives, the charity's income and, if considered appropriate, reserves are applied in making grants to a number of charitable organisations and bodies involved in activities which further the charity's objectives.

The trustees apply funds through grants, loans and social investments. These are directed towards the relief of poverty, hardship or distress in accordance with the charity's objects.

Applications for grants, loans or social investments must be in writing, and trustees seek the completion of formal terms and conditions. These were updated in late 2020 to ensure compliance with the latest relevant legislation and will be used for all new grants from early 2021.

Acknowledgement of receipt of grants are required following the signing of a formal agreement. Additional verification of bank details and, where relevant, common reporting forms are required. Financial reporting of expenditure is common, and trustees and staff will ask for copies of receipts for expenditure to be provided where relevant.

All grants and investments are subject to an ongoing monitoring programme, and further instalments of funds only released subject to milestones and timescales being reached.

Achievements and performance

Review of Activities

During the period under review the trustees continued to support previously identified projects and organisations which had been initiated by the charity, whilst at the same time committing to support a number of new organisations which met the charity’s established aims and objectives.

The Foundation has three portfolios – one with an international focus which makes grants and social investments in water and sanitation enterprises and enterprise models in Africa and Asia; and two UK focused portfolios which support organisations working in the mental health and disadvantaged youth sectors. The strategies and approaches for the three portfolios differ and each has continued to implement its strategies to expand activities and impact following revisions in 2017.

In determining the organisations to support, the management team of the Foundation provided investigative work and information on potential beneficiary organisations to the trustees. The services of New Philanthropy Capital were also utilised to support this process in the two UK focused portfolios. In determining grants and commitments to be made the trustees were also able to use the experience gained from working with organisations and deepening knowledge of particular areas of interest, over the lifetime of the charity.

The trustees received reports from the management team and advisors who monitored performance of grantees against milestones and deliverables, included within terms and conditions, which were agreed at the outset of the grant.

THE STONE FAMILY FOUNDATION

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Alongside this normal activity, it is important to note that 2020 was an unprecedented year due to the impact of COVID-19. The charity took a considered and measured approach to its response – working with the organisations in the portfolio to understand their positions and needs, providing additional funding and support against clear selection criteria and where impact was possible.

As a result, the charity made a number of emergency grants in the three impact portfolios to support organisations to weather the impact COVID-19 had on operations. Overall, the charity made COVID-19 responsive grants totalling £0.98M (£0.59M in the WASH portfolio, £60,000 in the mental health portfolio and £0.33M in the disadvantaged youth portfolio).

WASH

In the water and sanitation portfolio, the largest of the portfolios, the Foundation’s strategy places enterprises at the core and identifies how non-financial support can be provided alongside funding to support the development and scaling of these organisations.

In addition, the Foundation is increasingly making more strategic investments in initiatives which can support the wider sector to develop by supporting research, collaboration and how to enable different types of finance to flow into the sector to achieve the Sustainable Development Goals.

Key grants and investments made in the year include continued support to sanitation marketing programmes in rural Cambodia, safe water enterprises operating in Cambodia, Uganda, Rwanda and Ghana as well as supporting the scale up of container-based sanitation enterprises in Kenya and Ghana.

The Foundation responded proactively to the challenge of Covid – providing additional support to the existing portfolio against specific criteria, being flexible with planned milestones and using its network of similar funders to provide coordinated support. In response to being unable to travel to identify new opportunities, monitor implementation and provide support, the management team switched to remote working and launched an initiative designed to identify new organisations to support, bringing these into the portfolio in a low risk way – resulting in 7 new organisations joining the portfolio.

In 2019, the Foundation worked in partnership with iDE Cambodia and the United States Agency for International Development (USAID) to launch the first Development Impact Bond (DIB) in sanitation in November 2019. The Rural Sanitation in Cambodia DIB aims to eradicate the high rates of open defecation in the country and accelerate the Cambodian government’s efforts to reach universal sanitation.

Progress with the DIB in the reporting period has been strong – the programme has delivered against its specific milestone targets, with 500 Cambodian villages claiming open defecation free status and entered 2021 ahead of target. Two milestone payment requests were successfully submitted, and $3.2M in funds received from USAID as per the contract. These funds have been recycled back to the implementing partner, iDE, for use in further implementation.

THE STONE FAMILY FOUNDATION

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

UK Portfolios

The charity made a number of emergency grants in its UK based portfolios in response to COVID-19. In the mental health portfolio, grants included support to Beat, Cellar Trust, The Listening Place, Rethink Mental Illness and Bipolar UK; in the disadvantaged youth portfolio grants included support to Into University, Sport4Life, Empire Fighting Chance, Longford Trust and Positive Futures North Liverpool.

The Foundation also made a donation of £100,000 to the Coronavirus Mental Health Response Fund (CMHRF) set up to mobilise rapid funding to meet growing demand nationally for mental health support.

As an example of impact from the mental health portfolio, the Foundation supported Beat with an unrestricted grant of £141,902 and an emergency grant of £150,000 in 2020. This helped the charity increase the capacity of its helpline supporting people affected by eating disorders in the UK, which saw an 81% increase in contact in the wake of Covid-19. The pandemic has had a disproportionate effect on people with eating disorders, with 73% saying their mental health got worse as a result (National Mind, June 2020: https://www.mind.org.uk/mediaa/5929/the-mental-health-emergency_a4_final.pdf). Beat now provides three times as many support sessions each month as they did in 2019, delivering over 90,000 sessions over the course of 2020/21. Service user satisfaction continues to be very high, with 87% rating the service as ‘good’ or ‘excellent’ and 100% saying they would recommend the service to a friend.

As an example of impact from the disadvantaged youth portfolio, the Foundation supported Tutor Trust with a grant of £110,000 in 2020. The organisation looks to close the attainment gap by working with university students to deliver tuition in schools, focusing on young people from disadvantaged backgrounds. Tutor Trust played a key role in supporting young people through the disruption of Covid-19, as well as moving its standard tutoring programme online. Tutor Trust was also selected as one of the providers for the National Tutoring Programme (NTP). The NTP focused on supporting students from disadvantaged backgrounds to access single-subject support to mitigate the impact of extended time out of the classroom on learning. Altogether, Tutor Trust expects to reach 6,500 students this academic year.

Financial review

Investment performance for the year to 31 December 2020

Total income from investments in the year amounted to £366,862 (2019 - £528,359). The Foundation realised gains amounting to £832,545 (2019 - £1,430,681) on its investment portfolio and generated unrealised losses of £469,595 (2019 - unrealised gains of £6,458,967 ) on the movement in fair value (market value).

Given the stock market and economic conditions experienced in the year, the trustees were satisfied with the performance of the investments and that their investment objectives had been met.

Results for the year

A summary of the results can be found under the "Statement of Financial Activities" of this report and financial statements.

The trustees made grants to various institutions totalling £7.8m (2019 - £6.4m) and recognised impairment losses of £381,710 in the year on its social investments. Investment management, administration and governance costs totalled £0.8m (2019 - £0.9m). Gains on the investment portfolio of £0.4m (2019 - £7.9m) and a £62k loss (2019 - £88k loss) on foreign exchange contributed to the overall net expenditure of £4.2m (2019 - £1.1m net surplus) for the year.

THE STONE FAMILY FOUNDATION

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Fundraising

The Foundation does not fundraise directly with individuals and therefore is not registered with the Fundraising Regulator. Where donations from individuals are received, the Foundation aims to protect personal data and never sells data or swaps data with other organisations.

In the event of any complaints regarding its fundraising activities being received, the Foundation would undertake to react, investigate, respond and learn from the complaint and improve its service. During 2020, the Foundation received no complaints about its fundraising activities.

Approach to income and reserves

All income derived from the Foundations’ investment portfolio is intended for the sole purpose of achieving social impact and therefore all income then forms part of the Foundation’s reserves and ultimately distributed using the grant making and social investment approach.

The unrestricted funds of £44.8m represent investments and cash held by the charity in order to meet any liabilities that may fall due for payment and to generate an income return for the future.

Financial Position

The balance sheet shows total unrestricted funds at 31 December 2020 of £44.8m (2019 - £49.0m)

The trustees consider that this level of free reserves meets the charity’s reserves policy as outlined above and they, therefore, consider free reserves to be adequate.

FUTURE PLANS

The trustees regularly review their giving strategy based on experience gained of the organisations and sectors supported to date whilst also utilising research and information provided by the management team and New Philanthropy Capital.

The intention is to continue to focus on extending funding into enterprises and market-based models in the water and sanitation sector in Africa, South Asia and South East Asia; maintaining the UK funding streams where appropriate with a focus on mental health and disadvantaged youth sectors. In addition, the trustees will consider one off smaller donations as they see fit.

As noted above, the reporting period has been unprecedented due to the impact of COVID on the charity’s operations and core activities of grant making and impact investment.

Following the advice issued by the UK Government in March 2020 regarding employees working from home and other social distancing measures, the management team and its advisors enacted procedures to facilitate this, working remotely for the rest of year (something that continues in 2021).

The charity’s systems and processes enabled it to continue to operate effectively whilst employees are not physically present in the charity’s offices and restrictions are placed on travel both in the UK and overseas – there was no overseas travel from March 2020.

THE STONE FAMILY FOUNDATION

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

The effects of the 2020 outbreak of Covid-19 on the charity’s operations were considered through a process of analysis and then response, with additional funding and support provided against clear and specific criteria in each of the portfolios. The charity focused on providing support to its existing portfolios as an initial starting point before considering organisations and initiatives outside of current portfolios.

A plan developed and agreed with the trustees focused on:

The charity continues to monitor the impact of COVID-19 in the sectors and countries of operations and will respond accordingly should the situation change and require additional funding and support.

Structure, governance and management

The charity is a company limited by guarantee with no share capital.

The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:

Mr John Stone (Chairman) Mr C H Edwards Miss S N Edwards (Resigned 15 September 2020) Mr D J Steinegger

Governance

The Stone Family Foundation is governed by its Memorandum and Articles of Association, adopted on 30 September 2015.

As set out in the Articles of Association, the directors of the Foundation are the trustees. The minimum number of trustees required is three and the maximum is five.

The names of the trustees who were appointed and served during the period and to the date of this report are given below with brief biographical details:

John K Stone

John Stone is FCII qualified and has spent the majority of his career within the insurance industry, holding various director/chairman positions with a number of organisations.

Charles H Edwards

Charles Edwards qualified as a Chartered Accountant and is currently employed as an investment manager with a major institution.

David J Steinegger

David Steinegger is a Chartered Accountant and has worked for over 30 years in the international financial services industry.

Sophie N Edwards

Sophie Edwards was appointed as a Trustee on 19 February 2019 and has worked in the international development sector for the last 8 years; she currently works as a journalist reporting on international development issues.

THE STONE FAMILY FOUNDATION

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Trustees must be appointed by resolution of the trustees. Trustees are entitled to hold office for life. Every trustee must sign a declaration of willingness to act as a trustee of the charitable company before he or she is eligible to vote at any meeting of the trustees.

On agreeing to become a trustee of the charity, the trustees are thoroughly briefed by their co-trustees on the day-to-day management, the responsibilities of the trustees, the current objectives and future plans. The trustees are also encouraged to attend any courses which they feel are relevant to the development of their role, and to keep up-to-date on any changes in legislation.

Structure and management reporting

The trustees are ultimately responsible for the policies, activities and assets of the charity. They meet on a regular basis to review the developments with regard to the charity, its grant giving and social investment activities and make any important decisions. The trustees review the proposals for grants and social investments and approve proposals as appropriate. They also review progress on major ongoing grant programmes.

When necessary, the trustees seek advice and support from the charity's professional advisers including investment managers, solicitors and accountants. The day to day management of the charity's activities, and the implementation of policies, is delegated to four members of staff who ensure that grant applications are processed and presented to the trustees as appropriate and keep the books and records of the charity.

Separate meetings take place between the trustees and the investment managers when details of the investment performance and activity are reported and reviewed. This enables the trustees to update the fund managers with regard to funding requirements to meet the grants agreed. Regular liaison also takes place between the two investment managers appointed to ensure that a holistic approach is adopted in respect of the investments held.

Key management personnel

The trustees consider that the board of trustees and its employees, which increased from three at the beginning of the year to five at the year end, comprise the key management personnel in charge of directing and controlling, running and operating the charity on a day to day basis. The trustees give their time freely and no trustee received remuneration in the year. The pay of the employees is reviewed annually by the trustees.

Risk management

The trustees have assessed the major risks to which the charity is exposed, in particular those relating to its investments and its finances. The trustees believe that by ensuring controls exist over key financial systems and by delegating the investment management function to investment managers, subject to regular monitoring, including periodic reviews of performance against benchmarks, they established effective systems to mitigate those risks.

In addition, the trustees have reviewed and re-assessed the controls and protocols over the identification and reporting of potential irregularities and conflicts of interest relating to organisations receiving grants made by the Foundation. The trustees believe that these controls have been effective in the period under review and that appropriate action has been taken to ensure the Foundation's responsibilities have been discharged.

Auditor

In accordance with the company's articles, a resolution proposing that Buzzacott LLP be reappointed as auditor of the company will be put at a General Meeting.

The trustees' report was approved by the Board of Trustees.

THE STONE FAMILY FOUNDATION

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

..............................

Mr John Stone (Chairman) Trustee Dated: .........................19 May 2021

THE STONE FAMILY FOUNDATION

STATEMENT OF TRUSTEES' RESPONSIBILITIES

FOR THE YEAR ENDED 31 DECEMBER 2020

The trustees, who are also the directors of The Stone Family Foundation for the purpose of company law, are responsible for preparing the Trustees' Report 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 charity and of the income and expenditure of the charitable company for that year.

In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity 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 charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustees are aware:

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

THE STONE FAMILY FOUNDATION

INDEPENDENT AUDITOR'S REPORT

TO THE TRUSTEES OF THE STONE FAMILY FOUNDATION

Opinion

We have audited the financial statements of The Stone Family Foundation (the ‘charitable company’) for the year ended 31 December 2020 which comprise the statement of financial activities, the balance sheet, and statement of cash flows, the principal accounting policies and the notes to the financial statements. 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 charity 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

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.

THE STONE FAMILY FOUNDATION

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE TRUSTEES OF THE STONE FAMILY FOUNDATION

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 trustees’ report. 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:

Responsibilities of trustees

As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose 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 charity’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.

THE STONE FAMILY FOUNDATION

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE TRUSTEES OF THE STONE FAMILY FOUNDATION

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

THE STONE FAMILY FOUNDATION

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE TRUSTEES OF THE STONE FAMILY FOUNDATION

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.

Katharine Patel (Senior Statutory Auditor) for and on behalf of Buzzacott LLP .........................28 June 2021 Chartered Accountants Statutory Auditor 130 Wood Street London EC2V 6DL

Buzzacott LLP is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under of section 1212 of the Companies Act 2006.

THE STONE FAMILY FOUNDATION

STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31 DECEMBER 2020

Unrestricted Unrestricted
funds funds
2020 2019
Notes £ £
Income from:
Donations and legacies 2 4,169,978 -
Investments 3 366,862 528,359
Total income 4,536,840 528,359
Expenditure on:
Charitable activities 4 8,930,438 7,102,691
Investment managers' fees 8 131,913 183,929
Total expenditure 9,062,351 7,286,620
Net gains on investments 9 362,950 7,889,648
Net movement in funds (4,162,561) 1,131,387
Fund balances at 1 January 2020 49,028,865 47,897,478
Fund balances at 31 December 2020 44,866,304 49,028,865

The statement of financial activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

THE STONE FAMILY FOUNDATION

BALANCE SHEET

AS AT 31 DECEMBER 2020

Notes
Fixed assets
Investments
10
Programme related investments
11
Mixed motive investments
11
Current assets
Debtors
12
Cash at bank and in hand
Creditors: amounts falling due within
one year
13
Net current assets
Total assets less current liabilities
Income funds
Unrestricted funds		 £
612,504
1,930,994
2,543,498
(1,254,960)		 2020
£
33,092,571
8,705,393
1,779,802
43,577,766
1,288,538
44,866,304
44,866,304
44,866,304		 £
109,894
789,158
899,052
(149,200)		 2019
£
40,616,992
3,948,950
3,713,071
48,279,013
749,852
49,028,865
49,028,865
49,028,865

The financial statements were approved by the Trustees on .........................19 May 2021

..............................

Mr John Stone (Chairman) Trustee

Company Registration No. 09802468

THE STONE FAMILY FOUNDATION

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

Notes
Cash flows from operating activities
Cash absorbed by operations
15
Investing activities
Purchase of fixed asset investments
Purchase of social investments
Proceeds on disposal of investments
Proceeds on disposal of social investments
Investment income
Net cash generated from investing
activities
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Relating to:
Cash at bank and in hand
Short term deposits included in current
asset investments		 £
(17,684,529)
(1,867,187)
24,509,339
2,651,207
366,862		 2020
£
(8,352,866)
7,975,692
-
(377,174)
3,208,275
2,831,101
1,930,994
900,107
2,831,101		 £
(12,096,182)
(2,015,308)
18,898,173
237,563
528,359		 2019
£
(7,296,799)
5,552,605
-
(1,744,194)
4,952,469
3,208,275
789,158
2,419,117
3,208,275

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting policies

Charity information

The Stone Family Foundation is a private company limited by guarantee incorporated in England and Wales. The registered office is 130 Wood Street, London, United Kingdom, EC2V 6DL.

1.1 Accounting convention

The financial statements have been prepared in accordance with the Companies Act 2006 and “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)". The charity is a Public Benefit Entity as defined by FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial assets at fair value. The principal accounting policies adopted are set out below.

Critical accounting estimates and areas of judgement

The preparation of financial statements requires the use of certain critical accounting estimates and judgements. It also requires the trustees to exercise judgement in the process of applying accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including an expectation of future events that are believed to be reasonable under the circumstances. Although these estimates are based on the trustees' best knowledge of the amount, event or actions, actual results may differ from those estimates.

Areas requiring the use of estimates and critical judgements that may impact on the charity’s financial activities and financial position include:

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting policies

1.2 Going concern

The trustees have not identified any material uncertainties relating to events or conditions that may cast significant doubt on the ability of the charity to continue as a going concern. The trustees recognise that the final impact of the coronavirus pandemic on the charity’s activities and its beneficiaries is still unknown however consider it to be appropriate for the charity’s financial statements on a going concern basis.

1.3 Charitable funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.

1.4 Income

Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Income from donations and legacies is recognised in the period in which the charity becomes entitled to the donation and where receipt is probable and its amount can be measured reliably.

Investment income comprises dividends and interest on the Foundation’s portfolio of investments Dividends are recognised once the dividend has been declared and the Foundation has received notification that the dividend is due.

Interest is recognised when receipt is probable and the amount can be measured reliably using the effective interest method.

1.5 Expenditure

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. It includes VAT which cannot be recovered.

Expenditure on charitable activities comprises grants payable, administration expenses and governance costs.

Grants payable

Grants payable are included in the statement of financial activities when approved and when the intended recipient has either received the funds or been informed of the decision to make the donation and has satisfied all related conditions. Grants approved but not paid at the end of the financial year are accrued for.

If the beneficiary has not been informed or has to meet certain conditions before the grant is released, the grant is not accrued for in the financial statements but is disclosed as a financial commitment in the notes. Similarly, if the grant obligation is conditional on an annual review process and the discretion to terminate the grant is retained by the trustees, the grant is not accrued in the financial statements but is disclosed as a commitment.

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting policies

Support costs and governance costs

Included within charitable activities expenditure are support costs incurred in assisting the grant making programme of the Foundation. Governance costs include audit costs and legal costs relating to the Foundation’s compliance with regulation and good practice.

Investment management fees

Investment management fees are incurred in managing the Foundation’s investments and are charged in the statement of financial activities and are stated net of rebates.

1.6 Fixed asset investments

The Foundation’s investment in quoted shares and similar investments are initially measured at cost and subsequently at market value. Investment gains and losses, whether realised or unrealised, are recognised in the statement of financial activities in the period in which they arise.

Investments in unlisted equity and similar investments are initially measured at cost and subsequently at market value unless the market value cannot be measured reliably in which case they are valued at cost less impairment. Investment gains and losses, whether realised or unrealised, together with impairment charges, are recognised in the statement of financial activities in the period in which they arise.

Social investments

Social investments include programme related investments and mixed motive investments.

Programme related investments

Programme related investments are made exclusively to further the Foundation’s charitable objectives by funding specific activities and where a financial return is not the primary reason for making the investment.

Programme related investments consist of unquoted shares and concessionary loans. Unquoted shares are initially recognised at cost and subsequently at fair value. If fair value cannot be measured reliably, the unquoted shares are measured at cost less impairment. Concessionary loans are initially recognised at the amount paid, with the carrying value being subsequently adjusted for repayments and any impairment.

Mixed motive investments

Mixed motive investments are made to provide funding to organisations in order to generate a financial return for the Foundation but also to contribute to the Foundation achieving its charitable objectives.

Mixed motive investments consist of quoted and unquoted shares and similar financial instruments and are initially recognised at cost and subsequently at fair value. If fair value cannot be reliably measured, the investment is carried at cost less impairment.

Gains on the disposal of social investments, together with impairment losses, are recognised in the statement of financial activities in the period in which they arise.

1.7 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting policies

1.8 Financial instruments

Financial assets and financial liabilities are recognised in the balance sheet when the Foundation becomes party to the contractual provisions of the instrument.

Basic financial assets

Debtors are initially recognised at their settlement amount and subsequently at amortised cost or their recoverable amount. Impairment provisions are recognised when there is objective evidence, such as significant financial difficulties on the part of the counterparty or default or a significant delay in payment, that the Foundation will be unable to collect all of the amounts due.

Prepayments are valued at the amount prepaid.

Basic financial liabilities

Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be measured or estimated reliably.

Creditors and provisions are initially recognised at fair value, being the amount the Foundation anticipates it will pay to settle the debt, and subsequently at amortised cost

Derecognition of financial liabilities

Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.

1.9 Taxation

The charity is exempt from corporation tax on its charitable activities.

1.10 Retirement benefits

The charitable company operates a defined contribution pension scheme. Contributions payable to the charitable company's pension scheme are charged to the Statement of Financial Activities in the period to which they relate.

1.11 Foreign exchange

Transactions undertaken in foreign currency during the period are translated into sterling at the spot rate of exchange on the day of the transaction. Exchange differences are taken to the statement of financial activities.

Foreign exchange gains (or losses) arising on the translation of monetary assets and liabilities at the period end date are taken to the statement of financial activities.

2 Donations and legacies

Unrestricted Unrestricted
funds funds
2020 2019
£ £
Donations and gifts 4,169,978 -

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

3 Investments

Unrestricted Unrestricted
funds funds
2020 2019
£ £
UK equities 269,596 401,358
Overseas equities 60,111 81,012
Social investments 35,673 28,178
Interest receivable 1,482 17,811
366,862 528,359

4 Charitable activities

Direct costs
2020
£
Staff wages
275,523
Staff social security
27,933
Staff pension costs
13,131
Staff development
6,487
Travel expenses
14,619
Rent and office costs
39,494
IT costs
7,112
Portfolio consultancy
13,557
Grant administration
4,758
Consultancy
175,108
Net exchange losses/(gains) on currency
62,314
Impairment
381,710
Bank charges
763
Trustees expenses
-
Auditors's remuneration
-
Accountancy costs
-
HR payroll and tax costs
-
Legal expenses
-
1,022,509
Grant funding of activities (see note 5)
7,827,006
8,849,515		 Support
costs
2020
£
-
-
-
-
-
-
-
-
-
-
-
-
-
569
12,000
23,652
7,332
37,370
80,923
-
80,923		 Total
2020
£
275,523
27,933
13,131
6,487
14,619
39,494
7,112
13,557
4,758
175,108
62,314
381,710
763
569
12,000
23,652
7,332
37,370
1,103,432
7,827,006
8,930,438		 Total
2019
£
170,002
16,851
9,630
5,201
73,706
41,002
5,896
23,435
25,281
184,684
88,145
-
1,204
694
7,320
27,441
11,904
24,064
716,460
6,386,231
7,102,691

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

5 Grants payable

Grants payable
Direct costs Direct costs
2020 2019
£ £
Grants to institutions:
1001Fontaines 572,225 541,024
Aerosan Sustainable Sanitation Nepal 92,900 -
Aguaconsult 11,700 10,425
Arcadia Growth Support - 13,349
Beat 291,902 -
Birmingham Mind 92,432 92,432
Cellar Trust 80,000 -
Clean Team 253,880 -
Container Based Sanitation Alliance 46,482 22,200
Coronavirus Mental Health Response 100,000 -
Dalaberg Global 13,589 -
Delvic 17,552 39,628
Drinkwell Bangladesh 50,000 -
Eau et Vie Bangladesh 92,229 -
Empire Fighting Chance 50,000 50,000
Everflow Africa 10,004 38,459
Evidence Action 396,030 -
Factor E 787,116 386,644
Gret 55,965 135,458
Hillside Clubhouse 134,000 134,000
Hydrologic Social Enterprise 15,873 31,513
IDE 404,033 411,435
Impetus PEF 200,000 200,000
IntoUniversity 100,000 65,000
Jibu - 69,532
Leap confronting conflict 150,000 150,000
Longford Trust 20,000 15,000
Loowatt 50,000 95,000
Mental Health Innovations 330,000 250,000
Ministry of Rural Development Cambodia - 32,596
Mosaic Clubhouse 162,990 134,000
National Mind 200,000 100,000
Numa Water 116,314 -
On Purpose Careers 50,000 50,000
Oshun Senegal 94,657 -
Oxfordshire Mind 112,780 138,923
Positive Futures 60,000 50,000
PSI Ethiopia - 46,525
Redthread 150,000 150,000
Rethink 114,702 106,852
Safe Water Network 590,369 462,720
Safi Sana 309,518 133,428
Samaritans 80,000 140,000
Sanergy 401,056 198,244
Shish Malhotra 13,100 -
SNV - 262,860
Social Finance - 134,764

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

5 Grants payable

Sport 4 Life
The Mix
Tracey Keatman Ltd
Tutor Trust
Tutors United
Watershed
Wheels Project
World Bank Global Water Partnership
WSUP
Youth Moves		 65,000
100,000
-
110,000
45,000
170,608
25,000
-
375,000
63,000
7,827,006		 -
-
22,706
110,000
45,000
172,354
25,000
305,159
750,000
64,000
6,386,231

6 Trustees

None of the trustees (or any persons connected with them) received any remuneration during the year, but travelling expenses totalling £569 were reimbursed during the year (2019 - £544).

7 Employees

Number of employees

The average monthly number of employees during the year was:

Employment costs
Wages and salaries
Social security costs
Other pension costs		 2020
Number
5
2020
£
275,523
27,933
13,131
316,587		 2019
Number
4
2019
£
170,004
16,851
9,630
196,485

One employee earned between £90,000 - £100,000 (2019 - £80,000 - £90,000) per annum (including taxable benefits but excluding employer pension contributions).

Key management personal are those persons having authority and responsibility for planning, directing and controlling the activities of the charity and are represented by the trustees and the Foundation's employees. The total remuneration paid to the key management personnel was £316,587 (2019 - £196,485).

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

8 Investment managers' fees

Investment mangers' fees

Unrestricted Unrestricted
funds funds
2020 2019
£ £
131,913 183,929
131,913 183,929

9 Net gains/(losses) on investments

Unrealised gain/(loss) on revaluation of investments
Realised gain/(loss) on sale of investments
Fixed asset investments
Listed and
unlisted
investments
£
Cost or valuation
At 1 January 2020
38,197,875
Additions
18,147,397
Valuation changes
(428,232)
Cash changes
-
Disposals
(23,724,576)
At 31 December 2020
32,192,464
Carrying amount
At 31 December 2020
32,192,464
At 31 December 2019
38,197,875		 Unrestricted
Unrestricted
funds
funds
2020
2019
£
£
(469,595)
6,458,967
832,545
1,430,681
362,950
7,889,648
Cash in
portfolio
Total
£
2,419,117
40,616,992
-
18,147,397
-
(428,232)
(1,519,010)
(1,519,010)
-
(23,724,576)
900,107
33,092,571
900,107
33,092,571
2,419,117
40,616,992		 Unrestricted
Unrestricted
funds
funds
2020
2019
£
£
(469,595)
6,458,967
832,545
1,430,681
362,950
7,889,648
Cash in
portfolio
Total
£
2,419,117
40,616,992
-
18,147,397
-
(428,232)
(1,519,010)
(1,519,010)
-
(23,724,576)
900,107
33,092,571
900,107
33,092,571
2,419,117
40,616,992
7,889,648
Total
£
40,616,992
18,147,397
(428,232)
(1,519,010)
(23,724,576)
33,092,571
33,092,571
40,616,992

10 Fixed asset investments

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

10 Fixed asset investments

Investments at comprise:
Listed on UK stock exchange
Listed on overseas stock exchanges
Gilts and fixed interest
Property funds
Unlisted UK equities
Equity managed funds
Commodities		 2020
£
3,363,185
14,771,555
6,414,298
66,336
6,522,338
761,611
293,141
32,192,464		 2019
£
11,596,241
16,909,337
791,398
66,267
6,509,927
1,006,008
1,318,697
38,197,875

The following individual holdings had a carrying value in excess of 5% of the entire portfolio at 31 December 2020.

£
Sway Ventures Accelerate AITV LP 3,693,026
JJ&P (Belvin Franks) 5,996,101
FIL Investment Management (LUX) 3,112,077

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

11 Social Investments

Programme related investments

Programme related investments
At 1 January 2020
Additions
Disposals
Impairments
At 31 December 2020		 2020
£
3,948,950
6,281,686
(1,143,533)
(381,710)
8,705,393		 2019
£
1,933,643
2,015,307
-
-
3,948,950

Financial commitments on programme related investments amounted to $2m at the 31 December 2020 (2019 - $1.5m), payment of which is dependent on performance milestones being achieved.

Mixed motive investments

Mixed motive investments
At 1 January 2020
Movement in fair value
Disposals
At 31 December 2020		 2020
£
3,713,072
(41,363)
(1,891,907)
1,779,802		 2019
£
3,830,708
84,084
(201,721
3,713,071

Social investments, consisting of programme related and mixed motive, can be further broken down as follows:

Loans
UK equities
Overseas equities
OEIC and unit trust
Fixed deposits		 2020
£
2,404,689
318,444
1,604,107
1,461,358
4,696,597
10,485,195		 2019
£
2,180,075
325,584
1,768,875
3,387,487
-
7,662,021

THE STONE FAMILY FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

12 Debtors

Amounts falling due within one year:
Other debtors
Prepayments and accrued income
Creditors: amounts falling due within one year
Trade creditors
Other creditors
Accruals and deferred income		 2020
£
440,391
172,113
612,504
2020
£
6,219
1,143,589
105,152
1,254,960		 2019
£
20,230
89,664
109,894
2019
£
2,870
280
146,050
149,200

13 Creditors: amounts falling due within one year

14 Related party transactions

Mr John Stone, a trustee, made donations of cash and investments amounting to £4,169,978 to the Foundation (2019 – Nil). In addition, the Foundation made grant payments to Impetus - The Private Equity Foundation of £200,000, a charity in which Mr Charles Edward, a trustee, is also a director. (2019 – Nil)

15
Cash generated from operations
(Deficit)/surpus for the year

Adjustments for:
Investment income recognised in statement of financial activities
Gain on disposal of investments
Fair value gains and losses on investments
Gift of investments

Impairment of investments
Movements in working capital:
(Increase) in debtors
(Decrease) in creditors
Cash absorbed by operations
 2020
2019
£
£
(4,162,561)
1,131,387
(366,862)
(528,359)
(832,545)
(1,430,681)
469,595
(6,458,967)
(3,733,778)
-
381,710
-
(70,596)
(10,115)
(37,829)
(64)
(8,352,866)
(7,296,799)

16 Analysis of changes in net funds

The charity had no debt during the year. The net movement in funds has decreased because expenditure during the year exceeded realised and unrealised gains on investments.