Celebrating 30 years of community giving

January 29, 2019

The Modern Māori Quartet performing at TSB Community Trust’s 30-year celebration in June 2018

 

The 12 Community Trusts that emerged from the New Zealand Government’s banking deregulation in the late 1980s celebrated their 30th anniversaries in 2018. We take a look at how they were created, what makes them different, and their impact on New Zealand’s philanthropic and investment landscape.

Think back to the 1980s in New Zealand. It is often remembered as a decade of excess, shoulder pads, Rogernomics and the stock market crash. But one legacy from that era has made a tangible difference to New Zealand – the Combined Community Trusts of New Zealand.

The 12 Community Trusts that make up this group cover the length and breadth of New Zealand, operating autonomously, and often co-operating when the right projects are presented. Collectively they’re in command of assets worth approximately $3.7 billion and give grants to their local communities of over $100 million each year.

 

The early days

The early trustee savings banks originated in Scotland in 1810, enabling anyone – not just the rich – to open a bank account and save. The deposits were owned by the depositors as a co-operative, with any surplus funds used for long-term savings schemes and community charitable projects. New Zealand’s first trustee savings bank opened in Wellington in 1846, followed by another a year later in Auckland.

Over the next 150 years, more trustee banks were established across New Zealand, and they were highly regulated – the banks were only permitted to operate within defined regional boundaries, and they had to provide services to everyone within those boundaries who wanted them. The banks’ profits could only be given to specific Government-approved institutions, like hospitals, libraries and museums or particular social service providers.


Government deregulation

In 1988, the New Zealand Government deregulated the banking industry, opening the way for the regional Trust Banks to compete with bigger trading banks and enable international investment. Ownership of the 12 banks was given to the communities that had built up the asset bases by placing them into Community Trusts. The operational area of the Community Trusts mirrored that of the banks’ original territories. In addition, the Government reserved the right to appoint and approve directors and trustees for the Community Trusts.

Deregulation meant the banks could now operate anywhere, and the 12 banks began to talk about amalgamating.

In June 1986, Taranaki Savings Bank withdrew from the negotiations, and today, as TSB, they are the only bank that has remained under the ownership of its Community Trust.

The ASB Bank also withdrew six months later, and the ASB Bank Community Trust was formed in May 1988, which would go on to own 100% of ASB Bank. Westland Savings Bank also pulled out of the deal and was later absorbed by ASB Bank. In 1986 the ASB Bank Community Trust sold 75% of its shareholding to Commonwealth Bank of Australia (CBA), and the balance in October 2000. ASB Bank Community Trust was renamed Foundation North in 2015.

The remaining nine banks became Trust Bank New Zealand Limited and would go through a number of name changes before being sold to Westpac Banking Corporation in April 1996. This allowed the asset base of investment for each of these Community Trusts to grow and enabled grants to be returned to the community on a regular basis from the returns on those investments.


Governance and operations

The Trusts operate under individual Trust Deeds, and each Trust is governed by a Board of Trustees appointed by the Minister of Finance. Trustees must reside in the specified area of the Trust and are appointed for the contribution they can make with skills and community knowledge. They are tasked with providing good governance, and each Board meets regularly to discuss grants, investments, finance, audit and risk management and any other governance issues that may arise. Board members also regularly attend community events on behalf of the Trust.

Each Community Trust has a Chief Executive or General Manager, and staff with expertise in philanthropy, grantmaking, research, finance, communications and marketing, and administration.  The number of staff varies with the size of the Trust.

With an aggregate investment portfolio of over $3.7 billion, the Community Trusts are a significant investment presence. While TSB Community Trust’s initial book value of its asset investments was $10 million, this has grown over 30 years to a market value of its assets in excess of $1 billion. Foundation North’s total investments to date are in excess of $1.4 billion. Each Trust has an independent investment advisor helping guide the Trust’s investment processes, and the Trusts share investment information and experience with each other.

The Trusts were set up to run in perpetuity, so Trustees keep an eye on their investments to balance the needs of communities in the short and long term. Enabling growth today, and for future generations, takes research, and the occasional leap of faith, to enable a consistent flow of grants to the community.


Giving back to the community

Over the last 30 years, the Community Trusts have given back approximately $2 billion to New Zealand communities. These grants range in size including small one-off grants, regular annual operating grants for community organisations, and large capital grants for one-off major community projects.

Each Trust works closely with their communities to fund projects that make a difference. In 2016 Foundation North established the $5 million Gulf Innovation Fund Together (G.I.F.T.) to fund environmental organisations actively working on conservation of the Hauraki Gulf environment. Otago Community Trust made its largest contribution of $7 million in 2009 towards Forsyth Barr Stadium.

Grant Hui in 2018 for the Gulf Innovation Fund Together, established by Foundation North

 

Otago Community Trust’s largest contribution supported the construction of the Forsyth Barr Stadium

From time to time the Community Trusts also collaborate on funding organisations that have a nationwide impact or projects that can be used by people all across New Zealand.

In 2017, the Trusts provided $146,000 in funding to help create Coastguard’s new app, and in 2018 Outward Bound’s Project Refresh Anakiwa received $148,300 from seven Community Trusts.


The changing face of giving

In the early days, most of the granting was transactional and reactive – it was up to community organisations to apply and see if they got funding. There was very little research or planning around what a good grant or a strong organisation looked like. Relationships weren’t always strong.

Gradually, as philanthropy research evolved, so did the Community Trusts. Now focussed on doing more than just giving, each of the Community Trusts has developed a strategic plan, in consultation with their communities, to help move the dial on a range of issues. They still fund the grassroots organisations that keep communities thriving, but now the Community Trusts are also looking at different ways to contribute.

For example, BayTrust now offers low or no-interest loans to community organisations whose projects align with their strategic outcomes and provide both an economic return and social impact.

Twenty-four years ago Community Trust of Mid & South Canterbury set up an annual grant to schools, kindergartens and community-led early learning centres in its region for disadvantaged students, where funds help with stationery, school camps, uniforms and other items. In 2018, over $186,000 was granted for this purpose.

Supporting its regions through the Canterbury and Kaikōura earthquakes, Rātā Foundation learnt some valuable lessons about responding to disasters and the need to stay agile and responsive in the future.

“We know from experience the recovery period after a major disaster can be long and difficult. It is essential for the long-term welfare of affected people that they get as much financial support as possible to rebuild lives and infrastructure as they need it,” says Leighton Evans, Chief Executive of Rātā Foundation. “As funders, we need to let our communities define their needs, listen and be ready to respond accordingly.”


Becoming a community hub

Community House Timaru, funded by the Community Trust of Mid & South Canterbury

For many Community Trusts, becoming a community hub is another way of providing support. In 2006, Community Trust of Mid & South Canterbury purchased a heritage building which has become Community House, and is now the home for over 20 different non-profit organisations, including health, education, welfare and advisory services. It also hosts a Farmers’ Market every Saturday.

In 2018, Trust Waikato opened its new building to better meet the needs of the communities it serves. It features purpose-built meeting rooms and flexible spaces on the ground floor, which can be booked online by community groups, and used free of charge. Since July over 140 groups have booked the meeting rooms and thousands of people have been through the new building. Events held at the site included a children’s art exhibition, a fashion show, meetings and training sessions.

“Inviting people in to use these state-of-the-art meeting rooms has provided what our community really need, as well as giving us a greater connection with the communities we serve,” says Dennis Turton, Chief Executive of Trust Waikato.


The future is bright

Collaborating with each other, and working in partnership with other funders in their regions, the Community Trusts are aware of the unique position they hold within New Zealand’s grantmaking community.

“We are fortunate to have a solid asset base behind us, which gives us the opportunity to try new things that may be difficult for others. We can fail and make mistakes, and then share the lessons we learn with others,” says Jonathan Bell, General Manager of Eastern & Central Community Trust. “As a group, we can work together on projects or services that have an impact on all our regions, and we continue to learn and grow alongside our communities.

“If you look at the vision statement for each of the Community Trusts, our communities are at the heart of what we do. I’m positive that will still be the same in another 30 years.”

 

 

The Combined Community Trusts of New Zealand

 

Article by Sonia Yoshioka Braid, Eastern & Central Community Trust, with input from the 12 Community Trusts.

Article originally published in Philanthropy News Issue #75