THE BARING FOUNDATION REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Company number 950696 Charity number 258583
THE BARING FOUNDATION CONTENTS Page Trustees, Report Independent Audilorfs Report Slalemenl of Financial Activities 10 Balall Sheet Cash Flow Statement 12 Notes to the Financial Statements 13-22
THE BARING FOUNDATION TRUSTEES'ANNUAL REPORT Status The organisalion is a charitable company limited by guarantee, incorporated on 25 March 1969 and registered as a charity on 31 July 1969. Govorning Do¢um9nt The company was established under a memorandum of association which established the objects and powers of the charitable company and is governed by its articles of association. Compat7y Number Charity Number 950696 258583 Rggistergd Office and Opèrational Address 8-10 Moorgate London EC2R 6DA Honorary offl¢¢rs Lucy de Grool Shauneen Lambe David Elliott Ashley Coombes David Culler Chair Vice Chair Treasurer Ito 31 December 20211 Treasurer Ifrom 1 January 20221 Secretary Principal Staff David Culler David Sampson Director Deputy Director Bankers Royal Bank of Scotland Bolton Customer Services P.0. Box 2027 Parklands De Havilland Way Bolton BL6 4YU Solicitors Bates Wells 10 Queen Street Pla London EC4R IBE Audltors Haysmacinlyre LLP Chartered Accounlanls and Slalulory Auditors 10 Queen Street Place London EC4R 1AG Investment Managers Baillie Gifford & Co. Charities Property Fund Callon Square Savills Investment Management 1 Greenside Row 33 Margaret Street Edinburgh EH13AN London W1G OJD
THE BARING FOUNDATION TRUSTEES'ANNUAL REPORT The trustees present their report and the audited financial slalemenls for the year ended 31 December 2021. The trustees who served during the year and up lo the date of this report were as follows.. Asif Afridi Chair of the Strengthening Civil Society Committee Victoria Amedume Chair of the Arts Committee Dr Rob Berkeley MBE Ashley Coombes (from June 20211 Lucy de Grool CBE David Elliott Andrew Hind CB James Jenkins Poonam Joshi Shauneen Lambe Francois Matsrasso lunlil September 20211 Jillian Popkins Rhys Pullen Sam Thorne Emebel Wuhib-mulungi Referen and adminislralive information set out on page one forms part of this report. The financial statements comply with current statutory requirements. the memorandum and articles of association and the Statement of Recommended Practice, A¢counling and Reporting by Charities (Sècond Edition, effective 1 January 20191, and the Companies Act 2006. Chair of the Board and Chair of the Nominations Committee Chair of the Investment Committee Chair of the International Committee Chair of the Audit Committee Purpose and values The Baring Foundation was set up in 1969. It is a registered charity and company limited by guarantee governed by its memorandum and articles of association. It may use ils capital and income lo make grants'lo such charities or for such charitable purposes" as trustees determine. The Foundation derives its income from a diversified investment portfolio. The following purpose and values slalemenl was adopted by Iruslees in December 2018". We are an independent foundation which protects and advances human rights and promotes inclusion. We believe in the role of a strong, independent civil society nationally and inlemationally. We use our resources lo enable civil society lo work with people experiencing discrimination and disadvantage and to act strategically lo tackle the root causes of Injusti and inequality. We seek lo build positive, purposeful partnerships with grant recipients, grantmakers and others in order to work together for socially just change. Vve use our funds to strengthen civil society, responding creatively, flexibly and pragmatically. We add value to our work by encouraging the development and communication of knowledge and evidence. We aim to be as accessible as possible within clear programme guidelines, treating grant-seekers and grant recipients with courtesy and respect. We help to create enduring change both in the lives of those served by the work we are funding and by building the capacity of organisalions lo become more sustainable and resilient. The UN Sustsinable Development Goals ISDGsl provide a framework for our work. We believe in the importance of'speaking truth to powev and use the independence and influence we have lo amplrfy the views of civil society and the people it serves. Structure. governance and manag&m¢nt The trustees of the charity are members of the Board of the Foundation and are directors under the Companies Act 2006. The current members appoint new trustees. Every three years trustees retire from office at the AGM but are eligible for re-election, currently subject lo a maximum term of 12 years. Al the Board and AGM in June 2021 Ashley Coombes was elected as a Member of the Board., David Elliott and Sam Thorne retired by rotation and were reelected as Members of the Board. In September 2021 Francois Matara$so resigned from the Board. Trustees invite suitably qualified and experienced people to consider nomination as a trustee. A trustees, skills audit is undertaken from lime lo time lo identify ways in which the Board could be strengthened. On appointrnenl trustees are given an induction pack and are offered one or more briefing meetings with the Director andlor Chair. Trustees are responsible for all decisions on the Foundation's policy and grants. In 2021 the Board had seven subcommittees., three for grant programmes, Investment, Audit, Remuneration and Nominations.
THE BARING FOUNDATION TRUSTEES'ANNUAL REPORT All Iruslees give their lime voluntarily and receive no benefits from the charity. Any expenses reclaimed from the charity are set out in note 5 to the accounts. Trustees have carefully considered the Charity Governance Code, concluding that they satisfactorily comply with ils advi overall though choosing to depart from it on two issues. Firstly, they relain a maximum board strength of 15 (rather than the rewmmended maximum of 121 as they believe the many different fields requiring expertise merit a larger board. Secondly, they ielain an upper limit of 12 years tenure in renewable three year periods for trustees Iralher than the recommended maximum of 9 years). This is due to the belief that the turnover on a large board Is sufticient and the long lime scale of our grant programmes and investment strategy benefits from this potential longevity. The Foundation employs six staff who adopt a hybrid workin9 approach working from office accommodation In central London generously provided pro bono by ING bank and home locations. Objectlves and actlvltle8 The Foundation agreed a lolal of 74 new grants during the year lo the value of £3,962,472 (see note 81. These were". eightArts and Mental Health programme grants lolaling £378,500,. 26 Arts and Mental Health Racial Justice grants totaling £794.165,' three International Development grants lolaling £410,000, 20 Strengthening Civil Society programme grants tolaling £1,725,246 and 13 Slrenglhening Civil Society Racial Justi grants lolaling £809,655. Four grants, which were outside the above-mentioned programmes, were made lolaling £44,9D6. Of those 74 grants agreed during 2021, £1,577,981 had been paid by the end of the year", a further £1,457,970 was paid as a result of grant decisions made in previous years. The Foundation is a member of 360 Giving and this year also agreed lo join the Flexible Funders, initiative and to become a Living Wage Funder, as part of an ongoing review of our ways of working as a grantmaker. Our approach to grant making is bespoke lo each grant programme and the opportunities which we see as available in each field. These circumstances change over time and our approach will continue lo evolve. This means that we do not have a default approach, such as aayS funding core costs or projects, short or long term, restricted or unrestricted, but Carefully consider specific needs in liaison with civil society organisalions. As regards the developing situation around the pandemic this meant different things in each programme, for instance continuing some specific grants on the effects of pandemi¢ in our Strengthening Civil Society programme. The Arts Programme focused on two groups of people who seemed lo continue lo be bearing the brunt of the terrible pandemic,. people living with mental health problems lour programme starting in 20201 and older people, including those in care homes and those living with dementia lour legacy programmel. Arts and mentsl health is a complex field with many actors and issues and we are eady on in a journey lo beller understand how we can support the sector. In 2020 the trustees initiated a process to further emphasise our commitment to racial equity across all our work. In the arts in 2021 this resulted in a work stream called 'Creatively Minded and Ethnically Diverse, starting with a research report on how well arts and rNental health serves people from elhnicalty diverse communities. This was followed by a highly oversubscribed grants programme with 25 grants made to a wide variety of organisations from small grassroots organisations lo an orchestra. While most of our funding was spent in this way, a small number of other strategic grants were given Including lo new funding partnerships with the Arts Council of Vvales and the Greater London Authority. Among other publications in this area we launched Creatively Minded and Heritsge. We have a number of ongoing grants from our arts and older people programme that ran from 2010 10 2019. This work stretches across the UK and includes a grant to set up a new se¢lor support body in England hosted by Manchester Museums. called the Creative Ageing Development Agency. We funded 8 third national Arts in C8re Homes Day marked by the launch of our second Treasury of Arts Activities for Older People. We also jointly published a report on creative ageing in Finland called Love in A Cold Climate. Our International Programme since 2014 has focused on the rights of Lesbian Gay Bisexual Transgender and Intersex ILGBTII people, especially women, in Africa. These groups do important work on very little funds and have been almost invisible in the humanitsri8n response to the pandemic. We commissioned an independent review of the first five years of our funding as well as an additional review through the lens of anli-colonialism and anli-racism. Throughout the year we maintsined and extended our funding lo African civil society through our three regional partners in East, West and Southern Africa. This was 81so the sècond year of 8 multi-year partnership with the Astraea Lesbian Foundation for Justice. Alongside these significant partnerships, a small amount of funding supports UK and international organisations lo encourage greater funding lo LGBTI human rights defenders in Africa. In particular. in anticipation of the role of the UK Government in leading a delayed inlergovernmenlal Conferen we have done further work lo propose the creation of additional resources in the shape of a UK Government initiative. As the programme was reviewed during the year, grants awarded were fewer in number and smaller in value than previous years with the expectation that this will increase significantly in 2022.
THE BARING FOUNDATION TRUSTEES'ANNUAL REPORT As in previous years, our Slrenglhening Civil Society Programme funds voluntary organisations lo use the law for positive change especially in tackling discrimination and disadvantage. This programme benefits from the support of the Legal Education Foundation and the Esmee Fairbairn Foundation. Time was spent researching areas that would lead on lo two funding 51rands. Our conviction as lo the importance of expert legal organisalion5 or 'hubs' working with other voluntary organisations was given expression through awarding 10 grants to organisalions to scale up this work over three years. Secondly we focused on racial inequity within the criminal justice system to make 13 grants lo anti- racist organisations. In related work we published a new report'The Pursuit of Racial Justice through Legal Action,. Among other work we have also been actively engaging with the Government's Independent Review of the Human Rights Act. Full details of the Foundation's programmes and of the grants agreed during 2021 are published on the Foundation's website Iwww.baringfoundalion.org.ukl and are provided in the Report on Activities which has been published separately and reports on what the charity has achieved and the outcomes of ils work. Achievements and perfomance in the delivery of public benefit The trustees have referred lo the Charity Commission's gener81 guidance on public benefit when reviewing the charity's aims and objectives and in planning Its future activities. In particular, the trustees consider how planned activities will contribute to the aims and objectives that have been set. The Foundation has a broad social objective and employs a range of monitoring and evaluation techniques in an attempt to assess its impact. These range from a light touch se-aSSesSMent for a small grant to an independent expert assessment for large grants or programmes of grants. The results of all evaluations are reported lo the Iruslees. The trustees are satisfied from this information that the work funded by the Foundation remains highly in demand and serves important needs in slrenglhening voluntary organisalions which support people experiencing discrimination and disadvantage. In addition to the activities reported above, the Foundation seeks lo be an engaged granlmaker by finding ways it can add value lo the work of the organisalions which it funds. The lessons derived through grantmaking are regarded as a major outcome in their own right. The Foundation frequently Commissions or writes publications on are8s relating lo ils grant programmes. Financial review The Trustees follow a lolal return strategy both for the management of the Foundation'5 inve51menl portfolio and for determining the amount available each year lo fund the grants programmes and meet expenses. This amount includes both income arising from the portfolio and an element of capitsl growth. The objective is lo al least sustain the real value of grant dislribulions and the long-lerm real value of the investment fund. To that end we budget income each year on the basis of a distribution from the portfolio eqLJal to a percentage of the rolling average value of the investment funds over the preceding 12 qusrters. From 2020 10 2021 that percentage was 3.77% p.a. and from 2022 the budget distribution will increase to 4.2010 p.a. From 2013 to 2021, to meet our cash requirements, our principal fund manager has distributed 3.5QA of the current value of the portfolio each year in quarterly inslalmenls,. from 2022 this will increase to 4¥0. The Baring Foundation investment portfolio saw a positive return during the calender year of 2021, of 7.6Q/o bul this lagged ils long term objective of 10.10/0. Overall 2021 was another year of strength for equity markets, with the MSCI World rising 22.9% and nearly all major developed equity markets posted positive retLJrns, led by the U.S. the U.K. and Europe, bul Japan Snd Emerging Markets rose 20/0 and fell 20/0 respectively. During the last quarter of 2021, equity markets continued to see a shift in leadership with growth stocks land particularty technology stocks) faltering in favour of value stocks that had been hardest hil by the COVID-19 pandemic. Over the year both gills and Corporate bonds posted negative low single digit returns. The Baillie Gifford portfolio found the conditions much more difficult, with the significant rotational shift towards cyclical companies and more value-oriented companies, as economies looked to re- open, leading lo underperformance relative lo a benchmark of 7.40k, led by some of their more growth oriented funds, particularly UK Alpha, Paris-Aligned Global Alpha and Positive Change. Their bond fund modestly outperformed and the Responsible Global Equity Fund also outperformed. This is the first full calendar year that the Baillie Gifford portfolio has underperformed since inception of the current structure in 2016. Longer-lem, however, the portfolio remains comfortably ahead of the benchmark over three and five years. The overall portfolio recorded a gain of 14.9° from ils property allocation. but chiefly owing lo the manager's quality lilt and conservative attitude lo deploying cash, this led lo benchmark Underperforman of-5%. Despite the more challenging conditions experienced in 2021, the combined Baring Foundation portfolio continues to achieve ils long-term objective over all longer-temi rolling periods and continues to perform strongly compared lo the peer group average since inception.
THE BARING FOUNDATION TRUSTEES'ANNUAL REPORT During 2021 the asset allocation of the Baillie Gifford portfolio saw one strategic switch within the global equity exposure, with a new purchase of the Paris-Aligned Global Alpha Fund Ilower carbon Inlensityl funded by a complete sale of the Global Alpha Fund. This is in keeping with OLJr intention to be more ESG-focLJsed in our fund selection. Baillie Gifford currently manage around 890/0 of the funds, including both equity and fixed interest securities, and the Charities Propety Fund around 110/0, Wlth the balan representing private equity less than 1 %. The broad asset mix is expected lo al least meet our long-term real return objective but we are prepared lo lolerale a reasonably high level of volatility, given the objective lo manage the foundations portfolio into perpeluily. Net assets at the yearend were £124.8 million (2020.. £120.0 million). Although there is building confidence globally that the worst of the COVID-19 pandemic may now be behind us, the combination of central banks looking to raise interest rates to combat inflation and the rising geopolitical temperature lespecially around Russia and Ukraine) has led to equity markets weakening at the stsrt of 2022. There has also been a continuation of the style rolalion from last year which has seen value outperforming growth stocks, and we are monitoring the persisten of this trend. As at 31 May 2022, the total portfolio value was £104.5 million, which is 16Vo lower than the value al the balan sheet dale, 31 December 2021. Responsible Investment Policy In 2022 the Iruslees revised their ststement on this, retaining established principles bul further elaborating on these in the interests of transparency. These are published in full on our website but the core of our approach is as follows.. The Foundation takes a responsible and long-lerm approach lo Investment, investing predominantly through external investment managers. The Board of Trustees has overall responsibility for the Foundation's investsnenl policy. 11 has an Investment Committee chaiied by a Trustee with relevant experience. The majority of the endowment is investèd through investment managers who have signed up to, and adhere to, the FRC UK Stewardship Code. We expect them to invest responsibly and lo be proadive in considering environmental, social and governance issues. We aim to invest in responsible companies which operate with fairness and integrity, and companies that offer positive solutions lo global challenges such as climate change, resource constraints and loss of biodiversity. We try to avoid exposure lo underlying companies which are associated with human rights violations or engage in activities that cause social harm. We work closely with our investment managers to understand the underlying Investment frameworks they use to help us monitor how well aligned their approach is with our values. We believe this approach will enable the Foundation lo continue lo generate attractive long-lerm relums and provide well-aligned liquidity for conlinuily of grant-making in real terms. Resorves Policy The Foundation's reserves effectively correspond lo its investment portfolio which is managed on a totsl relum basis with the intention of providing an annual income that will enable the Foundation lo al least maintain in perpetuity the real value of the annual grants il makes. To that end the aim lo achieve a minimum average annual return on investments of 3.5% plus RPI net of management fees Ilhis was revised in January 2022 10 40A plu5 CPI). In addition lo holding the major part of its Investments in readily marketable quoted securities the Foundation aims lo keep cash balances sufficient lo meet short-lerm grant commitments and ongoing expenses. The Trustees consider that the current level of unrestricted funds of £124.8 million at 31 Dernber 2021 meets this reserves policy. Social inve$tm9nts The Foundation holds a social investment in Charity Bank valued at £43,300 at 31 December 2021. Plans In 2022 the Foundation will fund work in three fields." LGBTI civil society in Africa, and, in the UK, the use of the law by civil society for social change and arts and mental health. In addition, the Foundation will spend at least a further £600,000 focusing on racial justice through our Arts and Slrenglhening Civil Society programmes. The Foundation will discuss whether il should focus additional support to issues around shrinking civic spa. Overall the Foundation will seek lo remain responsive lo the needs of civil society and continue lo develop our policies and approach in this regard. Ri8k a88e88ment During the course of the year, the Iruslees considered the major risks lo which the Foundation is exposed and the systems which il has lo mitigate them. The following areas of risk 8re considered most important.. Failure lo achieve programme goals., Failure lo earn adequate returns from our investrnenl portfolio. The Foundation has policies, procedures and systems in pla lo address the identified risks.
THE BARING FOUNDATION TRUSTEES'ANNUAL REPORT Remuneration policy The Foundation's policy is lo provide remuneration that will allracl and relain able and suitably qualified and experienced individuals who will effectively deliver the Foundation's objects and supplemented where appropriate by independent experts on a consultancy basis. As far as is pra¢li¢able, salaries are set by reference lo the median pay for comparable positions within the charitsble sector. The pay of each member of staff Is reviewed annually by a committee of Trustees having regard lo the financial resources and commitments of the Foundation, the impact of inflation on the real value of pay, and any recommendations of the Director. We have as a Board taken note of NCVO'S recommendations in their Report of the Inquiry into Charity Senior Executive Pay and guidance for trustees in setting remuneration" Our commitment lo transparency is shown in disclosing the muneratIon of senior staff in full in this report. Fundraising policy The Foundation's income is from its Investment portfolio and partnerships with other grant makers. No fundraising activity is carried out by the charity. Statement of trustees. responsibilities The trustees (who are also directors of The Baring Foundation for the purposes of company lawl are responsible for preparing the Iruslees, report and the financial ststemenls in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practi1. 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 Foundation and of the incoming resources and application of resources, including the income and expenditure, of the Foundation for that period. In preparing these financial slalemenls, the trustees are required to.. select suitable accounting policies and then apply them consistently., observe the methods and principles in the Charities SORP., make judgments and accounting estimates that are reasonable and prudent.. stste whether applicable UK Accounting Standards have been followed, subject lo any material departures disclosed and explained in the financial statements., and prepare the financial slalemenls on the going con¢em basis unless il is inappropriate to presume that the Foundation will continue in operab"on. The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any lime the financial position of the Foundation and enable them to ensure that the financial stslemenls comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Foundation and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. As far as the Iruslees are aware.. there is no relevant audit information of which the Foundation's auditors are unaware.. and the trustees have taken all necessary steps lo make themselves aware of any relevant audit information and lo establish that the auditors are aware of that information. The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the Foundation's website. Legislation in the United Kingdom governing the preparation and dissemination of financial slalemenls 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 lolal number of such guarantees al 31 December 2021 was 1412020- 141. The Iruslees sre the members of the charity. This entitles them only to voting rights. The trustees have no beneficial interest in the charity. Approved by the trustees on 21 June 2022 and signed on their behalf by Lucy de Grool CBE - Chair Date
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE BARING FOUNDATION Opinion We have audited the financial statements of The Baring Foundation for the year ended 31 December 2021 which comprise the Statement of Financial Activities, the Balall Sheet, Slalemenl 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 Iuniled Kingdom Generally A¢pIed Accounting Pra¢lice}. In our opinion, the financial slalemenls.. give a true and fair view of the state of the charitable company's affairs as al 31 December 2021 and of the charitable company's net movement in funds, including the income and expenditure, for the year then ended,. and have been properly prepared in accordan with United Kingdom Generally Accepted Accounting PracliTr', have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with Inlern81ional Standards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial slalemenls section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant lo our audit of the financial statements in the UK. inclLJding the FRC'S Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Vve 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 slalemenls, we have concluded that the trustees, use of the going concern basis of accoLJnling in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identifi'ed any material un¢ertainlies relating lo events or conditions that, individually or collectively, may cast significant doubl on the charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are aulhorised for issue. Our responsibilities and the responsibilities of the trustees with respect lo going concem are described in the relevant sections of this report. Other information The Iruslees are responsible for the other information. The other information comprises the infomiation included in the Trustees, Report (incorporating the strategic report). Our opinion on the financial slalemenls does not cover the other information and, except lo the extent otherwise explicitly slated in our report, we do not express any form of assuran Conclusion thereon. In connection with our audit of the financial slalemenls, our responsibility is to read the other information and, in doing so, consider whether the other Information is materially Inconsislenl with the financial slalemenls or our knowledge obtained in the audit or otherwise appears lo be materially misstated. If we identify such material inconsistencies or apparent m8lerial misstslements, we are requirèd lo 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 perfomed, we conclude that there is a material misststement of this other information, we are required lo report that fact. We have nothing to report in this regard. Opinions on oth&r mattors proscribed by thg Companies Act 2006 In our opinion. based on the work undertaken in the course of the audit.. the information given in the Trustees, Report lincorporaling the Directorfs and Strategic Report) for the financial year for which the financial statements are prepared is consistent with the financial statements", and the strategic report and directors, report included within the Trustees, Report has been prepared in accordance with applicable legal requirements.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE BARING FOUNDATION 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 obtsined in the course of the audit, we have not identified material misstatements in the Trustees, Report Iwhich incorporates the strategic report and diredors, reporti. 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.. adequate accounting records have not been kept by the charitable company., or the charitable company financial statements are not in agreement with the accounting records and returns., or certain disclosures of trustees, remuneration specified by law are not made", or we have not received all the information and explanations we require for our audit", or the trustees were not enlitleé to prepare the financial slalemenls in accordance with the small companies, regime and tske advantage of the small companies, exemptions in preparing the trustees, report and from the requirement lo prepare a strategic report. Responsibilities of trustees for the financial statements As explained more fully in the Ststement of Trustees, Responsibilities statement set out on page 6, the trustees (who are also the directors of the charitable company for the purposes of company lawl are responsible for the preparation of the financial stslements and for being satisfied that they give a true and fair view, and for such Internal control as the Iruslees detemiine is necessary lo enable the preparation of financial statements that are free from material misststemenl, whether due lo fraud or error. In preparing the financial slalemenls, 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 lo liquidate the group or the charitable company or lo cease operations, or have no realistic allernalive bul to do so. Audltor's responslbilities for the audlt of the flnanclal statements Our objectives are lo obtain reasonable assurance about whether the financial statements as a whole are flee from material misslalemenl, whether due lo fraud or etror, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, bul is not a guarantee that an audit conducted in accordance with ISAS IUKI will always delect a material misslalemenl when il exists. Misslalemenls can arise from fraud or error and are considered material If, individually or in the aggregate, they could reasonably be expected to Influen the economic decisions of users taken on the basis of these financial slalemenls. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, lo deleel material misststemenls in respect of irregularities, including fraud. Based on our understanding of the and the environment in which it operates. we identified that the principal risks of non£0mplian with laws and regulations related to health and safety, data protection legislation and employment (including iaxationl, and we considered the extent to which non-compliance might have a material effect on the financial slalemenls. We also considered those laws and regulations that have a direct impact on the preparation of the financial slalemenls such as the Companies Act 2006 and the Charities Act 2011. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial slalements (including the risk of override of controls. Audit procedures performed by the engagement team included.. Inspecting correspondence with regulators and tsx authorities., Discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud., Evaluating management's controls designed to prevent and detect irregularities.. Identifying and lesling journals, in particular journal entries posted with unusual account combinations, postings by unusual users or with unusual descriptions," and Challenging assumptions and judgements made by management in their critical accounting eslimales. A further description of our responsibilities for the audit of the financial ststements is located on the Financial Reporting Council's website al". www.fr¢.org.uklauditorsresponsibililies. This description forms part of our auditor's report.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE BARING FOUNDATION Usg of our rgport This report is made solely lo the charitable wmpany'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 slate lo the charitable company's members those matters we are required to stale to them in an Auditorfs report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility lo anyone other than the charitable company and the charitsble company's members as a body, for our audit work, for this report, or for the opinions we have formed. Siobhan Holmes {Senior Statutory Auditor) For and on behalf of Haysmacintyre LLP, Stalulory Auditors 10 Queen Street Place London EC4R 1AG Dale: l [uly 2022
THE BARING FOUNDATION STATEMENT OF FINANCIALACTIVITIES {INCORPORATING AN INCOME AND EXPENDITURE ACCOUNTI FOR THE YEAR ENDED 31 DECEMBER 2021 Restricted Unrestricted Funds Fund Total 2021 Total 2020 Notes INCOME FROM.. Donations Contributions lo programmes Donated serVIS Investments Other 400,000 400,000 75,692 1,805,727 370 408,000 78,334 1,742,741 5,150 75,692 1,805,727 370 Total Income 400,000 1,881,789 2,281,789 2,234,225 EXPENDITURE ON.. Raising Funds Investment Management Charitable Activities Strengthening Civil Society programme -Arts programme International Development programme Special initiative Other charitable work 553,773 553,773 494,991 400,000 2,149,029 1,351,462 528,933 44,906 141,528 2,549,029 1,351,462 528,933 44,906 149,528 1.938,629 1,109,974 1,746,436 8,000 151,656 Total expenditure 408,000 4,769,631 5,177,631 5,441,686 Net lexpenditurel before investment gains 18,0001 12,887,842) 12,895,842) 13,207,461) Net gains on investments 10, 11 7,654,499 7,654,499 20,547,359 N9t1gxpgnditurgllincomo and net movement in funds 18,0001 4,766,657 4,758,657 17,339,898 Total funds brought forward 8,000 120,012,857 120,020,857 102,680,959 Total funds carried forward 124,779,514 124,779,514 120,020,857 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 16 to the financial statements. The slalemenl of financial activities includes the income generated by the assets held in the investment portfolio and the nel gains or losses on those investments. 10-
THE BARING FOUNDATION COMPANY NUMBER 950696 BALANCE SHEET AS AT 31 DECEMBER 2021 Note 2021 2020 FIXED ASSETS Investments Social investments 10 11 124,827,319 43,300 120,282,957 42,050 124,870,619 120,325,007 CURRENT ASSETS Cash al bank and on deposit Debtors 3,055,281 100,000 1,895,023 100,000 12 3,155,281 1,995,023 LIABILITIES Creditors.. amounts due within one 13 year 12,662,050) 11,743,742) NET CURRENT ASSETS 493,231 251,281 TOTALASSETS LESS CURRENT LIABILLITIES 125,363,850 120,576,288 Creditors.. amounts due after more than one year 14 {584,3361 1555,4311 NET ASSETS 16 124,779,514 120,020,857 FUNDS 17 Reslricled funds Unreslricled funds Revaluation fund General funds 8,000 65,202,74S 59,576,769 60,553,735 59,467,122 Total funds 124.779,514 120,020,857 Approved by the trustees and signed on 21 June 2022 on their behalf by.. Lucy de Grool CBE Chair Ashley Coombes Treasurer
THE BARING FOUNDATION STATEMENT OF CASH FLOWS YEAR ENDED 31 DECEMBER 2021 2021 2020 Cash used in operating activities 13,754,356) 14,394,060) Cashflows from investing activities Dividend5 and interests Purchase of investments Proceeds from sale of investments 1,805,727 1,742,741 142,176,252) {37,632,5001 45,285,139 40,299,615 Net cash provided by investing activities 4,914,614 4,409,856 Change in cash and cash equivalents in the reporting period Cash and cash equivalents at the beginning of the reporting period 1,160,258 1,895,023 173,5841 1,968,6D7 Cash and cash equlvalents at the end of the reportlng period 3,055,281 1,895,023 NOTES TO THE CASH FLOW STATEMENT 2021 2020 Reconclllatlon of net expendlture to net cash outflow from operating activities Net income for the reporting period Ilncreasel in debtors Increase in creditors Dividends and interest (Gains) on investments 4,758,657 17,339,898 185,0001 947,213 641,142 11,805,727) 11,742,741) 17,654,499) 120,547,359) Net cash (used inl operating activities 13,754,356) 14,394,060) Analy$i$ of cash and Cash equivalents Cash al bank and on deposit 3,055,281 1.895,023 3,055,281 1,895,023 Change$ in not dobt Al 1 January Cash Flows At31 December 2021 2021 Cash al bank and on deposit 1,895,023 1,160,258 3,055,281 12-
THE BARING FOUNDATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Principal Accounting Policies The principal accounting policies adopted, judgements, and key sources of eslimalion uncertainty in the preparation of the financial ststements are as follows.. lal Basis of accounting The financial slalemenls have been prepared in accordance with Accounting and Reporting by Charities.. Statement of Recommended Practice for Charities (Second Edition, effective 1 January 20191, and the Companies Act 2006. The charity meets the definition of a public benefit enlily under FRS 102. Assets and li8bilities are initially recognised at historical cost or transaction value unless otherwise slated In the relevant acwunling policy notes. Ibl Donations and donalgd servi¢gs Income from donations is included in full in the slalement of financial activities when receivable. Donated services and facilities are recognised as income where the benefit lo the Foundation is quantifiable and measurable, and are valued at the estimated cost the Foundation would pay for an equivalent Servi or facility in the open market. Donated premises and facilities are received from ING Bank N.V. London Branch. Icl Investment income Income from investments is included in the financial ststements when il becomes receivable. Idl Grants payable The full costs of grants are included in the statement of financial activities in the year in which they are approved. If grants that are approved during the year are payable by inslalments or have not been paid, in part or in full, by the end of the year, any unpaid amounts are included as creditors in the balance sheet if the conditions attached to the grant are accepted by the beneficiary before the accounts are signed. This policy reflects the Foundation's experien that il is highly probable that any further inslalmenls will be paid 8$ It is unlikely that ¢ir¢umstsnces will arise in which conditions attached lo such grants are not met. The trustees consider that the Foundation has a constructive obligation in respect of such unpaid grants and therefore believe it prudent lo treat these commitments as liabilities. lel Other expenditure Support and governance costs consist of those office and administration costs which are not directly attributed to a grant programme. The majority of these are the estimated costs of the premise and facilities donated by ING Bank N.V. London Branch. Isee note 1bl. The Governance percentage has doubled Sin 2020 because il was agreed that some types of work should moved from the'olher Charitsble expenditure" Category to Ihe"Governan¢e' category. Total support costs are allocated lo the main grant programmes based on the estimated percentage of lime spent by the stsff on each activity. In 2021, on this basis, the support costs were apportioned as follows.. Governance Investment management strengthening Civil Society programme Arts programme International Development programme Other charitable work 120 40 33% 24° 15% 12% ifj Restricted funds Reslricled funds are lo be used for specific purposes as laid down by the donor. Expenditure which meets these criteria is charged to the fund together with a fair allocation of management and support Costs. 13-
THE BARING FOUNDATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Principal Accounting Policies Icontinuedl Igl Unrastrictad funds Unreslricled funds are income re1vable or generated for the objects of the charity. Ihl Going concern The Iruslees consider that there are no material uncertainties regarding the Charity's ability lo continue as a going concern. Critical accounting judgements and estimates In preparing these accounts, management has made judgements, estimates and assumptions that affect the application of the charity's accounting policies and the reported assets, liabilities, income and expenditure and the disclosures made in the accounts. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed lo be reasonable under the circumstances. ') Debtors Short-lenr debtors are measured at transaction pri, less any impairment. Ikl Creditors Creditors snd provisions a 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 lo settle the obligation can be measured or estimated reliably. Financial instruments The charity only has financial assets and financial liabilities of a kind that qLJalify as basic financial inslrumenls. Basic financial inslrumenls, including trade and other debtors and creditors are initially recognised al transaction value and subsequently measured at their selllement value. Im) Redundancy and termination costs The charity re¢ognises employee redundancy and lerminalion costs in full on the date the redundancy or termination is confirmed. Inl Fixed asset investments Fixed asset Investments are continuously revalued al bid price value and the value al the balance sheet date is the bid price value. as determined by the investment managers. The nel gains or losses for the period are tsken to the statement of financial activities. lol Social invgstments Social investments are recognised at fair value. Any gains or losses are taken lo the statement of financial activities (pl Foreign Currencies Monetary assets and liabilities denominated in foreign currencies have been translated into sterling at the relevant rates of exchange ruling al the balance sheet date, or where appropriate, the rates of exchange fixed under the temis of the relevant transaction. 14-
THE BARING FOUNDATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Principal Accounting Policies Icontinuedl Iql Pension costs staff from the Baring Foundation receive a pension from the ING UK Pension Fund. For historic reasons one of the staff was an admilled member of a defined benefit scheme. The liability of the scheme is with ING Bank N.V. and not the Baring Foundation. The pension wsl represents wnlribulions payable under the scheme by the Foundation lo the fund. The Foundation has no liability under the scheme other than for the payment of those contributions. Contributions to programmes The Legal Education Foundation and the Esmee Fairbairn Foundation jointly funded the Strengthening Civil Society programme in 2021, each providing £200,000. Donated Sgr¥i¢9$ 2021 2020 Service$ donated by ING Bank NV: Premises and facilities 75,692 78,334 75,692 78,334 Income from Investments 2021 2020 Income from Investments Bank interest 1,805,513 214 1,740,149 2,592 1,805,727 1,742,741 15-
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THE BARING FOUNDATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Net Expenditure for the Year 2021 2020 This is stated after charging.. Trijslees, reimbursed expenses 180 Auditors, remuneration For audit of the financial slalemenls Other services 12,600 16,500 12,000 15,900 Trustees, reimbursed expenses represent the reimbursement of travel and subsistence costs of £012020.. £1801 relating to attendance at meetings. No Iruslees have been remunerated for their role. staff Costs and Numbars 2021 2020 Staff costs were as follow$: Salaries and wages Social security costs Pension contributions 333,970 37,282 49,886 315,865 34,962 46,099 421,138 396,926 Kgy managgmgnt and Salary pgn$ion The following staff comprise key management and their remuneration is as follows.. £90,000 - £99,000 - David Culler- Director salary £96,681 12020.. £95,256), employerfs Nl £12,08912020.. £11.9391 and pension £16.83212020'. £16.6701. £70,000 - £79,999 - David Sampson - Deputy Director salary14.5 days per weekl £70,98012020. £65,203), employerfs Nl £8,54212020: £7,738) and pension £8,90412020.' £8,150>. The average number of staff during the year was.. 612020.. 61. The number of staff earning over £60,000 in the year was 212020.. 2}. Grants Payabl• 2021 2020 The grants payabla figure in 2021 comprisgs.. Grants made in the year Grants cancelledlwritten back 3.962.472 4,352.725 160,000} 3,962,472 4.292,725 All grants were made to institutions. There is a full list of the grants made during the year on the Baring Foundation's website (W.barIngfOundal10n.Org.ukl and this will be listed in the Report on Aclivilies. Taxation The charitable company is exempt from corporation tax as all its income is charitable and is applied for charitable purposes. 18-
THE BARING FOUNDATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 10. Investments 2021 2020 Market value of investments at 1 January 2021 Disposals at market value Additions al Cost Nel gain on investments 120.282,957 145,285.1391 42.176,252 7,653,249 102.312,633 140,299.6151 37.721.880 20.548,059 Market value of investments at 31 December 2021 124,827,319 120,282,957 Historical cost of investments al 31 December 2021 102,181,315 76,525,282 Pooled Investments comprise 2021 2020 UK Non UK 124,809,706 17,613 120,259,907 23,050 124,827,319 120,282,957 11. Social Investments 2021 2020 Opening carrying value Nel gain on investments 42,050 1,250 42.750 1700} Closing carrying value 43,300 42,050 Held as.. Investments 43,300 42,050 £43,300 is invested with Charity Bank. Charity Bank provides loans to ch8rilies, social enterprises and community organisations lo facilitate social change whilst earning a financial relum. 12. Other Debtors and Accrued Income 2021 2020 Accrued contributions to programmes and income in investment funds 100,000 100,000 19-
THE BARING FOUNDATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 13. Creditors.. Amounts due within one year 2021 2020 Grants authorised but not yet paid Other ¢redilors 2,488.586 173,464 1,590.970 152,772 2,662,050 1.743,742 14. Cr•dltors.' Amounts due after more than one year 2021 2020 1-2 years- grants aulhorised but not yel paid 584,336 555,431 584,336 555,431 15. Related party transa¢tions As is usual in a grantmaking foundation, a number of the trustees and senior stsff of the Baring Foundation are involved in othèr charities, eithèr as staff or volunteers. The charity holds a record of all conflicts of interest. Also al the beginning of each trustee meeting any relavanl declarations are declared based on the agenda of the meeting. Vere Iruslees have a conflict of interest in a grant decision they are not involved in the decision and leave the meeting for the discussion. The following trustees had conflicts of interest relating lo grantees in 2021. The trustees declared their interests and left the meetings prior to the decision lo award the grants.. Poonam Joshi is nneded with the charity Give Out who received a grant of £60,000. Shsuneen Lambe is connected with the charity Civil Liberties Trust. who received a grant of £150,000 Two arts advisers had conflicts of interest relating to grantees in 2021. The advisers declared their interests and were not involved with the grant recommendations.. Daniel Regan is connected with the charities Freespace Project, Bethlem Gallery and Marlborough Productions who received grants of £39,000, £26,625 and £40,000 respectively. Sabra Khan is connected with the charity Sampad who reiVed a grant of £39,800. Member of staff, Jannal Hossain, declared an interest in the charity Racial JusliTr Network and did not participate in the assessment process for the grant of £50,000 awarded. In 2018 the Foundation and New Philanthropy Capital agreed a contract for New Philanthropy Capital to act as its Learning Partner. The original contract was for £30.000 per annum until 2020, subsequently extended lo 2021. There was a decision al the March 2021 SCS Committee meeting lo renew the contract until 2024 al £35,000 p.a. Lucy de Groot is a Trustee of New Philanthropy Capital and did not participate in this decision. -20-
THE BARING FOUNDATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 16. Analysis of Net Assets Between Funds - 2021 Restricted Revaluation Fund Fund General Fund Total 2021 Investments Net current assets Creditors.. amounts dLJe after more than one year 65,202,745 59,667,874 124,870,619 493,231 493,231 1584,3361 1584,3361 Not assets at the end ofthe ygar 65,202,745 59,576,769 124,779,514 Analysis of Net Assets Betsveen Funds - 2020 Rostrlcted Revaluatlon Fund Fund General Fund Total 2020 Investments Nel current assets Creditors.. amounts due after more than one year 60,553,735 59,771,272 120,325,007 243,281 251,281 {555,4311 1555,4311 8,000 Net asset8 at the end of the year 8,000 60,553,735 59,459,122 120,020,857 17. Net Movement in Fund8- 2021 At the stsrt of the year Expendilurel gains on investments Al the end of the year Income Restricted funds Slrenglhening Civil Society 8,000 400,000 1408,0001 Total restrlcted funds 8,000 400,000 1408,0001 Unrestricted funds Revaluation reserve General funds 60,553,735 59,459,122 4,S49,010 65,202,745 1,881,788 11,764,141) 59,576,769 Total unrestricted funds 120,012,857 1,881,788 2,884,869 124,779,514 Total funds 120,020,857 2,281,788 2,490,368 124,779,514 The revaluation reserve represents the difference bebNeen the historical cost of investments and their current market value. 21
THE BARING FOUNDATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 18 Net Movemènt in Funds- 2020 At the start of the year Expenditurel At the end losses on of the year investments Income Restricted funds Strengthening Civil Society Treasury of arts activities for older people 2nd addition {Rayne Foundation) 400,000 1400,OODI 8,000 8,000 Total restricted funds 408,000 1400,0001 8,000 Unrestricted funds Revaluation reserve General funds 42,091,885 60,589,074 18,461,850 60,553,735 12,964,177) 59,467,122 1,834,225 Totsl unrestricted funds 102,680,959 1,834,225 15,497,673 120,012,857 Total funds 102,680,959 2,242,225 15,097,673 120,020,857 -22-