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Combined Community Trusts Conference

Hon Dr Jonathan Coleman
Associate Minister of Finance

13 March 2014

Combined Community Trusts Conference

Good afternoon everyone. Thank you Wayne, for my introduction. I would also like to thank our hosts, the TSB Community Trust, for inviting me to speak to you.

It’s great to see you all here today. I know that many of you have day jobs and other responsibilities in your communities, and it speaks to your dedication that you have made the effort to be here today.

I would like to first acknowledge all of the Trustees present, as well as the Trust staff who live and breathe Community Trusts on a daily basis. You are performing real public service, and making a major contribution to strengthen your communities.

25 years of Community Trusts
Last year we celebrated the 25th anniversary of the establishment of Community Trusts. Now is a good time to look back on what all the Trusts have achieved in their quarter century.

In the last 25 years, Community Trusts have made a combined total of $1.9 billion in grants to community organisations, while at the same time building up total assets under management to $3 billion.

While it can be difficult to quantify the impact Trusts have had, we know that even a single well-placed grant has the potential to lift up entire communities. People come together over a single project, neighbourhoods unite around a shared vision or objective, or get together at a cultural or sporting event.

For example, looking at grants made in Taranaki alone, they cover a diverse spectrum from NZ Cycle Fest Trust, the Taranaki Elite Athletic Foundation, to the Dame Malvina Major Foundation, the New Plymouth Community Foodbank, and Brooklands Kindergarten.

Trusts can have a comprehensive impact across a community. For example, last year the Canterbury Community Trust distributed over $3.1 million to more than 100 social services organisations in the region. In the post-quake context of increased demand for social services, this was described as a ‘lifeline’ for thousands of affected families and individuals.

But we don’t need the devastation of an earthquake to see the difference your grant-giving makes. You all see it every day. I know that in Auckland, the ASB Trust has helped make a difference through grants to the NZ Dance Festival Trust, Sport Waitakere Trust, the Basement Theatre Trust, Counties Manukau Sports Foundation, to name just a few.

Grants can also have cascading effects in the community over time. Sustained, diverse, dynamic grant-giving, in hundreds of communities over 25 years makes a substantial impact. That is the story of Community Trusts. That is something to be proud of.

The milestone of 25 years is a great time for reflection, but also a time to look to the future, to the next 25 years and beyond, to future goals and achievements. The reality is - we’re still in the early days of the Community Trusts story.

Economic outlook
Before I talk about the key issues and challenges facing Community Trusts, I would like to take a moment to reflect on the state of the economy, and the knock-on effects for how Trusts operate.

This Government has spent the last five years getting the books back in order, whilst dealing with the significant challenges from the Global Financial Crisis and the Canterbury earthquakes.

Through responsible economic and fiscal management, we have built a platform for sustainable growth. Compared to many developed countries, New Zealand is well placed with a growing economy and Government books that are on track to be back in surplus next year, and will enable us to reduce our overseas borrowing and start paying off debt.

We have achieved this economic turnaround without a slash and burn approach. Our focus has been on slowing expenditure growth whilst improving the efficiency and effectiveness of our public services, and investing in areas of vital importance to the future of New Zealand, such as the education system.

The public sector has had to up its game and drive forward reform, innovation, efficiency and savings. It has been important to establish a longer term strategy with a clear focus on delivering results. We have found out that what is good for communities through better public services is also good for the Government’s books.

Strategic philanthropy
The importance of today’s gathering cannot be overstated. For conference participants from Community Trusts and across the philanthropic sector the opportunity to come together to discuss the issues, learn from success, and from failure, identify risks and highlight opportunities, is invaluable.

The economy is improving, but we know there’s still work to do. Potentially that means your Trusts are well positioned for increased investment back into your communities. I don’t need to tell you that being a Trustee, though gratifying, can present tough choices. Demand can often exceed the resources at your disposal, and you are constantly forced to make difficult decisions about how money is allocated.

But these are the choices that you as Trustees are appointed to make. It is important that the division between governance and management is respected and maintained. As Trustees, you are the ones entrusted to set the agenda for your Trusts, and to make the decisions about where grants are allocated.

As Trusts you have broad Trust deeds, and the government cannot direct you. However, I do encourage you as Trustees to set the agenda, and not fall into the potential trap of being led by the nose by officials.

Board members also have a responsibility to ensure capability is maintained within their organisations so that Trusts are operating to the highest standard possible, that you are receiving sound advice, and that Trust activities are being well managed.

Funding choices will not get any easier in the near future. I am aware that some Trusts are facing issues with population growth eroding the per capita value of their disbursements. As general economic conditions and the investment environment improve, it would be a good time to start thinking about how disbursement values could be adjusted to reflect population changes where this is an issue.

It may be worthwhile seeking expertise from other Trusts and sharing experiences as you face this issue. This will affect some of you more than others, but all of you need to be thinking strategically about how to population-proof your funds for the future.

This means that Trusts must apply focused research, creative planning and proven strategies. It means long term solutions to long term problems. It means working together, joining forces with government and the private sector for the greatest impact, and the best results.

Each Trust needs to have a clear vision and goals around what you want to achieve in your communities, and how best to accomplish it. Avoiding duplication where government programmes are already operating, and focusing on where you can add the greatest value over and above existing government activities, should be a priority. We want to make sure that the government and Trusts are operating in a complementary way to maximise the value from both of our investments.

Strategic philanthropy also means measuring your impact. I note that two thirds of respondents in the Community Trusts survey last year reported that their Trust makes some effort to measure grant-making effectiveness. It needs to be one hundred per cent.

I appreciate this is a complex and evolving space, and I encourage you to further develop your systems and tools for effective measurement. It is important to reflect on your impact and achievements, not just every 25 years, but regularly and rigorously.

Investment leaders
Another area where Community Trusts continue to develop is investment. The survey results highlighted the value for many Trusts of having investment expertise on the board. There are significant public assets – collectively around $3 billion – under your stewardship. It is of critical importance that you are confident in your investment decisions.

I note that several of the guest speakers booked here over the next two days are investment experts – I encourage you to exploit their expertise.

Community Trusts are significant players in the New Zealand markets, and I see their potential to become investment leaders.

In closing, I would like to thank you all for your commitment to your communities, to philanthropy in New Zealand, and for the challenging work you do.

25-plus years is a milestone worthy of recognition and reflection, and also a time to look forward to even better days. By joining forces, investing smartly and funding strategically, you can play your part in taking this country forward.

ENDS

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