We use all our assets, including our £759 million endowment, to drive health impact.
We have one of the UK’s largest charitable endowments. It is the accumulation of donations over many centuries.
Managing and investing this resource skilfully allows us to deliver our ambitious charitable goals. Thanks to this, we plan to put around £250 million over the next ten years towards improving health and healthcare in Lambeth and Southwark.
We also use investments to create health benefits, complementing the work we do through our programmes and as a Trust charity. For example, we have allocated 5% of our endowment to invest in funds that have a positive impact on health in the UK. We also use many of our properties to improve health directly by housing healthcare facilities.
We have a long history and have benefited from donations and legacies dating back to the 16th Century. A key legacy for the Charity came in 1724 when Thomas Guy gifted one third of his estate – £219,400 at the time. Subsequent donations and legacies have built up over hundreds of years.
Today, our endowment amounts to around £759 million (as at March 2019).
Our investment approach helps us to produce a consistent and sustainable amount for charitable spending today while protecting the value of our endowment for future generations.
We own property as part of our endowment, which helps us further our charitable mission
Alongside our property assets, we invest carefully in the financial markets and use the returns to fund charitable activity.
Our investment approach follows best practice. We have a diversified portfolio and both internal and external experts to ensure our investments balance the best possible return with an adequate level of risk.
We have a rule which defines how much we transfer from the endowment to fund our charitable activities each year. Today, this is around 4% of the value of the endowment.
Our aim is that our investments meet recognised ethical, environmental and governance standards, and that they are consistent with our values and our need to generate financial returns.
Our experience tells us that, in the main, maximising financial returns from investments in our endowment is the most efficient way of achieving our charitable mission. We combine this with working to minimise our investments’ potential for negative health impact, be it direct or indirect.
For example, we do not make any direct investment in tobacco-related shares, bonds or property and we monitor carefully to keep any indirect investments in tobacco down to the minimum (currently 0.25%).
In 2018, we started investing up to 5% of the value of our endowment to create positive health benefits in the UK. This means putting money from our endowment into – often less mainstream – funds that not only achieve commercial returns but also generate positive health outcomes, to help us grow our impact.
This allocation to health-related investment is in addition to our use of investments in health companies as a financing alternative to providing grants and other charitable funding.
Impact investment is a relatively new area for foundations. By taking a bold step into this space, we also hope to encourage others to invest in less established businesses, which tend to face barriers to funding.
In early 2018, we moved from theory to practice and made our first impact investment. We invested with Apposite Capital, a healthcare specialist private equity investor. Apposite invests in businesses that have the potential to deliver high quality, efficient and cost-effective care solutions. The range is broad and includes genetic testing and complex home care services.
Homelessness is a major issue in London and other urban areas. It also impacts directly on the health of some of the most vulnerable groups. We’ve invested in Resonance Real Lettings Property Fund, which buys and refurbishes homes in London, and works with leading homelessness charity St Mungo’s to let the properties to individuals and families at risk of homelessness.
Interested in how we make our investments?