Raiders of the lost trusts: how investigators are putting 'locked' cash to good use
Charity sector ‘archaeologists’ have uncovered treasure which will provide a multi-million pound windfall for Scotland’s communities.
A team working for Foundation Scotland has managed to release more than £2.3 million by unlocking a series of ‘dormant trusts’ and putting the cash to good use.
Dormant, or sleepy, trusts are those which were set up with some purpose in mind but which have become inactive.
Many are historical, but there is huge amounts of cash built up in them, much of which is not being touched.
Foundation Scotland set up the Revitalising Trusts Project to unlock this and put the money to good use, by effectively acting as archaeologists by identifying the trusts and conducting investigations so see how they can be used to help communities.
Its latest findings show that it has re-purposed more than £2.3m – a figure it thinks is just the “tip of the iceberg”.
Among those it has been investigating are a trusts formed over a century ago to help boys with the surname Stewart, one to supply pensions to “women of good character” and one to provide medical assistance pre-NHS.
For example, the William Stewart’s Trust was formed in 1898 to provide for the sons of the eight Incorporate Trades of Perth, or failing that, boys with the surname Stewart. The overall purpose was to provide for their education.
Investigations uncovered the successors of those listed in the deeds and found that the funds were held by a legal firm.
The trust was wound up and the cash released. To keep as close to the historical trust’s original mission, it was decided that a group helping local educational needs be selected as a beneficiary and the Tay Rivers Trust was chosen as the sole beneficiary of all the remaining funds.
The charity works in facilitating environmental research and education in the Perth and Angus area. This windfall has been an incredible boost for the charity enabling the organisation to employ its very first member of staff who will help develop the charity’s successful Salmon in Classroom programme (see picture above) allowing the programme to potentially reach a further 100 young people in the area and establish a small fundraising plan, meaning the transfer of £11,000 will in fact mean so much more to the organisation.
Foundation Scotland has revealed that it has identified nearly 300 dormant charitable trusts through the project run in collaboration with The Scottish Charity Regulator (OSCR).
Charitable trusts typically provide public benefit by making grants or donations to other charities, voluntary groups or individuals as laid out in their original constitution.
Launched in May 2021, Scotland’s Revitalising Trusts Project was set up to identify those that appear to be inactive and support them to reactivate. For a trust to be classed as inactive, they either had no income or expenditure or donated less than 30% of their total income over the last five years.
There are different reasons why a trust can lie dormant. It can be difficult to recruit new trustees, find time to run the charity or as times change, it can be impossible to identify beneficiaries befitting the original deeds of the trust.
Foundation Scotland has over 25 years’ experience distributing funds which provide long-term benefit for communities and as part of this national project, it is supporting trustees to release inactive funds so that they can be redistributed to good causes across Scotland.
Alternatively, Foundation Scotland support trustees to breathe new life into the charity, for example by changing their charitable purpose to help address new needs in local communities.
Steff Bell, Revitalising Trust Project advisor at Foundation Scotland,said: “In the current climate it’s more important than ever that charitable funds are being put to good use. Communities the length and breadth of the country suffered through covid and now they are struggling with the cost of living crisis. It’s good to know that we’ve been able to assist in reactivating these funds and putting them to good use, when they’re needed most.
“We’re delighted that we’ve already unlocked over £2.3m for good causes across Scotland but we know this is just the tip of the iceberg. We are making great progress; overall, the trustees we have approached have received the offer of support positively, with several indicating that the trustees had been stuck for a number of years, unable to find appropriate support to distribute the funds.
“We will continue to work collaboratively with more trustees, alongside OSCR, to help these trusts maximise their funds and reach for public good. We know trustees want to make a real and positive difference to those who need it most. If you think your charity could benefit from support to spend its funds, please do get in touch with us and we’ll help you work out the best next steps for your charity.”
Steve Kent, policy manager at OSCR, added:“We are delighted to be collaborating with Foundation Scotland on this important project and to see our joint effort to reach out to inactive trusts starting to bear fruit. We want public trust in charities to remain strong and never more so than in the present challenging times. It is vital that every pound of charitable funds is seen to be working hard for good causes but, even with best intentions, it is sometimes a challenge for trustees to make that happen. This project is an excellent example of what can be achieved by offering trustees a little support and encouragement at the right time.”
For more information about the project visit https://www.foundationscotland.org.uk/revitalise-trust