Barnwood Trust’s capital investments have done well in recent years. This led us to a question: how could Barnwood’s financial gains be used to increase funding for change in Gloucestershire?

Over the last 4 years, Barnwood Trust has increased its funding, spending some of the gains[1] made in the Trust’s investment portfolio. In this blog, we summarise how the decisions for this were made – how much to spend, on what, and how to award the funds.

Funding levels over the years

Barnwood Trust is a charitable foundation, which means it is financially independent. It also means the Trust can provide funding to other charities that support its charitable objects[2].

Before the pandemic, Barnwood Trust had been increasing its spending on grant funding in Gloucestershire each year – from £675,000 in 2016 to £1.35 million in 2019. Latterly, about £1 million is spent on grants to individuals and the rest on small grants to organisations and for inclusive community spaces.

Responding to the pandemic

In 2020, the first year of the pandemic, the Board of Trustees at Barnwood Trust agreed to put an additional £1 million, in 1 year, into funding Voluntary Community and Social Enterprise (VCSE) organisations. The purpose of this was to help reduce the impact of the pandemic on the Gloucestershire VCSE sector and enable it to keep on providing services that support disabled people and people with mental health conditions.

By 2022, it was obvious that the ongoing effects of the pandemic, coming on top of 10 years of austerity impacting disabled people, required sustained investment. Not only did the VCSE organisations need to survive; they needed to be strong to meet emerging and ongoing local and global challenges.

What to do with the investment gains

Barnwood Trust’s funding and operational costs are paid for by financial gains from its investment portfolio. Following a healthy increase in the investment pots over a few years, the Trust’s Board asked the team to identify how much capital could be ‘drawn down’[3] without substantially altering the charity’s ability to carry out its activities long-term.

As part of good governance, the Board considered whether ‘spending out’[4] its resources was an appropriate option. This was rejected on the grounds that, as a place-based funder with charitable objects related to disability and mental health, it could and should play an ongoing role in creating positive change alongside disabled people.

The Board instead agreed to invest £20 million in funding for Gloucestershire – over a 3-5 year period – taken from its investment portfolio which at that time was valued at £90 million.

How to spend £20 million in funding

In order to decide what to spend the approved funds on, and the best processes to use in allocating and awarding them, we did two things:

• We reviewed what we knew from our research[5], to understand the impact of the pandemic for disabled people, people with mental health conditions and the organisations that support them.
• We worked with Modern Grant Making, learning about contemporary best practices in grant making, and updated our processes accordingly, and we adopted the IVAR funding principles to guide us.

See our blog ‘Funding in a changing world’ for more details on this.

Deciding what to fund

Looking to our listening and learning above, the Board agreed to invest the £20 million in funding as follows:

1. Continuing to allocate £1 million a year to grants to individual disabled people and people with mental health conditions of all ages; awarding this funding through collaboration with our community partners.
2. Creating a number of one-off Themed Funds, the themes being identified from Barnwood research. So far, Themed Funds have comprised:
   • Digital Inclusion for disabled people and people with mental health conditions: £466,000 (2022-25)
   • Short Breaks for disabled children and their families: £410,000 (2023-24)
   • Accessibility Fund for improvements to the accessibility of public spaces: £2million (currently in the co-design phase, to be launched in 2025)

Disabled people, people with mental health conditions and carers co-create our Themed Funds with us. This means that the purpose and focus of the fund are set by people with direct experience of the topic. The awarding panel of people with lived and learned experience make recommendations to the Trust’s Funding Committee[6] for applications to be approved. See Involving Experts by Experience in awarding funds for further details.

3. Allocating the remainder of the funding, £14 million, to the Funded Partner programme. This funding for VCSE organisations is to support their ongoing sustainability and development, and their ability to deliver activities aligned with the Trust’s goals – opportunity, involvement and access to rights for disabled people and people with mental health conditions in Gloucestershire. The Funded Partner streams are as follows:

• • unrestricted funding of up to £150,000 over 3 years for VCSE organisations who directly support disabled people and people with mental health conditions;
  • project funding of up to £100,000 over 3 years for VCSE organisations whose focus is not disability and mental health but who want to do projects related to disability and mental health;
  • small grants of up to £10,000 a year for small or emerging VCSE organisations or groups who want to carry out activities in support of disabled people and people with mental health conditions.

Funded Partners are so called because our focus is on working in a learning partnership – we each develop our activities and learn together about what works. For our Themed Funding, funded VCSE organisations are invited to a community of practice with us to share learning and deepen practice.

See our blog ‘Funding in a changing world’ for more on test and learn, partnership working and communities of practice – all central to our strategic funding approach.

Funding after the £20 million

We anticipate that the £20 million in funding will be allocated by the end of 2026, with the activity it has supported completing in 2029.

The Board will review future funding schemes after 2026 over the next 2 years, with decisions being influenced again by the continued listening, learning and research we are, and will be, doing over the next few years.

[1] Financial gains is another way of saying increase in value or income from an investment.

[2] ‘Charitable objects’ describe the charity’s overarching purpose, found in its governing document on the Charity Commission website. For Barnwood, its objects are about disability and mental health.

[3] To ‘draw down’ on the capital means to take money out of the investment portfolio to spend.

[4] To ‘spend out’ means to take all the money out of the investment portfolio to spend.

[5] Barnwood’s research reports Our Changing World, Resourcing Resilient Gloucestershire, and The State of Gloucestershire informed these decisions.

[6] The Trust’s Funding Committee includes VCSE and public sector representatives.