Ideas for Change: A Local Endowment Fund

Highland cows in Graves Park in Sheffield. Photo: Vanessa Chettleburgh/Flikr

The philanthropists of the past invested in the shared assets and common wealth of a city. A Local Endowment Fund for people-centred approaches to regeneration could do the same in the 21st century, says Julian Dobson.

It’s hard to spend any time in Sheffield without running into the legacy of Alderman John George Graves. At the central library there’s the Graves Art Gallery. Ecclesall Woods, the ancient woodland on the west side of town, was donated to the city by Alderman Graves. Even Sheffield University’s student union owes its existence to a Graves donation.

For many Sheffielders, though, the most familiar Graves legacy will be Graves Park, an 83-hectare expanse of woodland, hills and playing fields, famous for its Highland cattle and children’s playground. From the top of Graves Park there are fine views over the city and the surrounding hills; from this vantage point it’s hard to argue with the claim that this is the greenest city in Britain.

John Graves, like many who have left their mark on our cities, wasn’t a local lad. He arrived from Lincolnshire as an apprentice watchmaker, saw a gap in the market and ended up running a mail order business employing 3,000 people. Unlike many contemporary UK business leaders, he didn’t think he was doing the nation a favour simply by giving people jobs.

When Alderman Graves handed the land that is now Graves Park to the city of Sheffield, what did he have in mind? He made three separate purchases of land from around the Norton estate, between 1925 and 1935, so it wasn’t just a flash of bigheartedness. This was a deliberate attempt over an extended period of time to create an asset for the city that could be shared by all – a redistribution of value from the private to the public domain.

In other words, he was adding to the common wealth of the city. Whatever other motivations he might have had, he saw himself as a citizen of Sheffield with a civic responsibility to the wider community. And with that view of citizenship went a view that the citizens of Sheffield were worthy of the assets he could pass on to them.

In his parting critique of the government’s big society policy, the former Archbishop of Canterbury Rowan Williams asked what it means to be a citizen in contemporary society. The Graves legacy can give us an insight into how to answer that question. It means not merely philanthropy but contributing to the common wealth of the place you call home. That’s something everyone can do in different ways.

Shared assets like Graves Park are valuable not just because of the land they occupy or the activities they can host, but because the people who use them are considered valuable. Donating an asset to a city assigns a value to all citizens, not just the donor: that’s why we should think twice before disposing of assets created for public benefit.

This concept of shared value is a world away from current narratives that divide citizens into strivers or skivers, givers or takers – or, as chancellor George Osborne put it in a speech earlier this year, people who ‘do the right thing’ by having a job or the ‘wrong thing’ by not having one.

The current welfare debate drives a wedge between citizens, considering some worthier than others by virtue of their circumstances. It is linked to a myth that work is the only way out of poverty and that if we can get back to economic growth, everything else will sort itself out.

The starting point, as my recent report on rethinking regeneration for the think tank ResPublica argues, needs to be different. What I described as ‘regeneration with a human face’ is at root a call to develop approaches that start with the lives of ordinary citizens, supporting them as complete human beings who require and depend on neighbours, friendships, housing, public services, good transport links and open spaces for their kids to play as well as – and often more than – the simple solution of a job.

The ResPublica report outlines six stepping stones that need to be in place to improve the prospects of our poorest communities. They include supporting social networks, building resilience through a strong voluntary and community sector, control of local assets such as housing, participation in decision-making, rewarding people for their service to their community, and rethinking the labour market to meet local needs rather than assuming the only value citizens have is as units of production.

Investment, whether from state or philanthropic sources, needs to help lay these foundations. So one of the report’s recommendations was for a Local Endowment Fund that could invest in people-centred approaches to regeneration. Focused on the most disadvantaged neighbourhoods, it should be available to community-led organisations and social landlords working at a neighbourhood level to draw down when they need it, in order to fund local action that has the potential to change wider practice or stimulate additional activity within the community. It should have two simple objectives: to fund innovation, and to share learning.

This would not be a substitute either for mainstream public service funding or for programmes like Big Local, but would function as a research and development budget for communities. Unlike many previous regeneration funds, the endowment fund should be spent by those working directly within the communities that are most in need.

Projects should be able to draw down funds over an extended timescale rather than having to spend within set budgeting periods; they should be able to do so with a minimum of bureaucratic monitoring; and organisations should be required to start small and demonstrate their effectiveness before advancing to larger sums. Two clear conditions should be set for funding: organisations should prove themselves with small actions before applying for larger amounts, and peer learning should be a part of every project.

The £500m a year spent in the last years of the Labour government on its working neighbourhoods fund could get a Local Endowment Fund off to a flying start. Capital funding could then be added year by year to increase the size of the endowment. The risk profile of its capital investments should be managed so as to maximise the possibility of investing directly into poorer communities (for example, by investing in social housing real estate investment trusts or community energy projects) while preserving the ability to run a substantial grants programme.

As well as managing and distributing grants, those responsible for managing the Local Endowment Fund would have a duty to collect and share learning in forms that are accessible to the communities that would most benefit from this knowledge.

The alternative to investing directly to build shared value in our poorest communities is to hang our hopes on the mutually reinforcing untruths that economic growth will solve problems of poverty, and that the harder we make life for people who are out of work, the sooner they will get a job. Neither will work because neither the resources of the planet nor the resources of the poor are infinite: sooner or later something will give.