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It started with a picnic…

The question on the minds of two charity endowment specialists James Brooke Turner and Guy Davies has long been who is there to help charity trustees make better decisions about their assets - to take the trustees' view of all assets in the round, and help them come to a decision about how they might be better put to use in advancing the mission of the charity.

For many years James and Guy had sat on different sides of the same table, one as the Finance Director of charity endowments and the other managing the assets of endowments. However what they both had in common was a real enthusiasm for the charities where they were trustees, and picnics. So it came to pass that when Guy and James used to get together to catch up it was invariably somewhere like St James' Park or Lincoln's Inn Fields, over a Scotch Egg and some potato salad.

Inevitably their conversation would turn to the same subject, year after year, but it was never dull. The question they always came back to was 'who was there to help charity trustees make better decisions about their assets?' They knew as well as anyone that there was an extensive and competent network of investment professionals, but their view was that, while as they were very skilled at what they did, they were limited. There was no one who was able to take the trustees' 'helicopter view' of all the charity's assets in the round, and help them come to a decision about how they might be better put to use in advancing the mission of the charity. Often this would be the preserve of the finance director, but for charities that were asset rich and with little need for fundraising, there was little need for a finance director.

Except occasionally: trustees are only too well aware of their responsibilities for looking after an endowment and rightly take great care over its management. They will conduct regular investment reviews, quiz the manager and read the reports they are sent. What they may not realise is that their portfolio could be ill-fitted to their requirements, either because the requirements have changed or because the portfolio has changed. Large charities would use their finance director, or an independent Investment Consultant such as Cambridge Associates, but these firms are often beyond the reach of most charities. Trustees are left to rely on advice from colleagues around the table, or from managers who are required to take a fairly narrow view of an investment question.

There is no one who might consider in the round an investment portfolio, a separate property portfolio and a reliable stream of income from a hospice or alms-house. Each asset would be viewed independently of the others so trustees would have to build up their own advice from these fragments into a meaningful whole, and that's hard to do no matter what area of expertise you have.

So the result of a lot of enjoyable picnics was Yoke and Company - set up a year ago to help charity trustees get the most value from the financial advice that they receive. Often trustees already know the answer to the issue they are struggling with, but can't frame the questions in a way that unlocks the problem. If charities can work 'upstream' of conventional questions and answers, they are usually able to unscramble the various component parts and reassemble them in a way that makes real sense to the Board, and re-invigorates its approach to how it finances its mission. These meetings are often characterised by energy, ideas and enthusiasm.

Common problems tend to include trustees who don't think that they are allowed to do what they really want to do for their beneficiaries, or wonder if their investments are performing as well as they ought to be, or sometimes the CEO needs a bit of support presenting the financial consequences of a new strategy to the Board. It can extend to refinancing a housing society's borrowings or discussing with trustees how they intend to deal with a declining number of beneficiaries and a growing asset base. A popular topic at present is from charities that have enjoyed huge growth in assets but can't work out how to translate this growth into a higher spend on their charitable objects, because they are locked into a world of only spending income.

The solutions are widespread and various - and often surprising (or not if you remember the idea came from a picnic). For example, when charity trustees see their assets grow to dizzying new heights, many will often see that as a sign of tremendous success. Few will see it as the sign of failure that it really is. What makes charities charitable is what they spend, and if they choose to save and accumulate their money, they're obviously not spending it.

Yoke and Company is a new and different type of charitable business which specialises in providing a wide variety of service, loosely under the umbrella term of 'Corporate Financial Advice for charities'. But it also covers investment counselling and advice, support on financial governance, and solutions to nagging problems that never seem to get resolved. They can be the yoke that shares the burden, and makes a heavy load more manageable. Get in touch at Yoke & Co.