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Lehman Foundation recipients 'optimistic' about funds
29.09.2008

Charities that have been promised hundreds of thousands of pounds by Lehman Brothers Foundation Europe say they expect to receive the money, despite the collapse of its parent investment bank.

The European Foundation was founded in 2001 and makes grants in the UK, Europe and the Middle East. It supports children?s health projects, educational programmes for disadvantaged youth, and cultural organisations using income from the parent company and staff.

According to the latest annual report, which is from 2006, the Foundation?s total assets amounted to £2.3m, and it gave away £956,276 in 26 grants. Total income for the year was £1.6m, and this comprised £1.2m from a corporate donation and £376,000 from staff contributions.

But it has committed much more for the next few years. One of the biggest grants pledged is £1m over five years to the Every Child a Chance Trust, a charity established by various financial institutions to improve children?s basic literacy and numeracy skills.

The £1m has been channelled into establishing Every Child Counts, the national numeracy programme that provides personal tuition for seven-year-olds who are having problems with maths (pictured). Every Child Counts is a partnership between Every Child a Chance and the UK government, and last November when the Foundation announced its donation, schools minister Ed Balls said Lehman Brothers? contribution of money and ?hands-on experience and skills? would be invaluable.

Funding assurance Jean Gross, the director of Every Child a Chance Trust, said she still expected to see the money. ?We have had an assurance that we will receive the funding. Apparently the Foundation is a separate limited liability company that is quite distinct from Lehman Brothers? main business, and was left with sufficient funds to meet all the commitments it had made.?

She said her understanding was that the Foundation was not dependent on new money from the investment bank, because its initial endowment was enough to meet its commitments. ?We are optimistic,? Gross said.

Peter Sherratt, vice chairman of Lehman Brothers Ltd, is a trustee of Every Child a Chance Trust, and has a seat on the advisory group of Every Child Counts. Gross said she ?very much hoped? he would continue to serve as a trustee, as he ?brings a huge amount of value independent of his association with Lehman Brothers?.

Other grants promised by the Foundation include £300,000 over three years to the Eastside Young Leaders Academy in London, where Richard Atterbury, Lehman Brothers? co-head of global finance, Europe, is on the board; £227,850 over three years to London?s Almeida Theatre, £130,000 to the National Portrait Gallery, and £75,000 to the Prince?s Foundation for Children and the Arts.

?Great shame? relationship will end Almeida Theatre director Neil Constable said he had had confirmation from the Foundation that the remaining funding for 2009 would be forthcoming. However, he added it was a ?great shame? that the relationship would have to end there.

The advantage of a three-year deal, he said, was that the theatre now had 18 months to try to secure a new corporate partner, ?but we know the climate is going to be tough?.

?Audiences will still go to the theatre in a recession,? he said, ?but fundraising, from both individuals and corporates, is going to be harder.?

Lehman Brothers Foundation spokeswoman Andrew Sullivan would only say: ?We are working the best we can to make sure all our commitments are met.?

HBOS recipients ?unaffected? HBOS Foundation, whose parent bank is to be taken over by Lloyds TSB, was more proactive. It posted a message on its website stating: ?The HBOS Foundation would like to reassure everyone who is in receipt of one of their grants, particularly a multi-year programme, that their funding will not be affected by changes in the corporate structure of HBOS plc.

?The HBOS Foundation confirm that they have already received the full amount for all grants and programme that they have agreed from HBOS plc and that the full amounts are set aside in their reserves for the grants. Therefore, all agreed grants and multi-year funding programmes will continue to run as planned.?

HBOS gave £8m to its eponymous foundation in 2006, and pays all the overheads including staff costs. In 2007 the Foundation made almost 400 grants totalling over £2.8m

Tania Mason, Professional Fundraising Magazine

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