GFC beginning of the end for WACF

THE GFC proved to be a tipping point for the Western Australian Community Foundation, which went into voluntary liquidation in August amid changing corporate sector and government priorities in supporting grass-roots community work, due to the belt-tightening during the economic crisis.

Established in 2004, WACF acted as a trustee of philanthropic donations, which were funnelled to mostly regional communities across WA.

But in August the $7 million in community funds held in trust by the WACF were placed in the hands of liquidators after the foundation’s directors were unable to secure adequate funding to cover administrative costs for the next three years.

With increasing philanthropy in regional WA, the demand for WACF’s governance and support increased, as did the administrative costs.

According to the foundation’s chairman, Michael Anderson, WACF had two main functions.

“Our role was twofold; as trustee we were managing the funds for the communities under a conservative investment strategy, and secondly w were helping the communities build capacity and longer-term sustainability through projects identified by the community for the community,” Mr Anderson told WA Business News.

WACF’s funds had grown to $7 million in just six years, doubling in each of the past three years, a statistic Mr Anderson said reflected its strong support in WA, given most funds of its kind around the world accumulate less than $4 million in endowment funds in their first 10 years.

“We had a foundation covering the whole of WA’s enormous land area and WACF had more individual community funds under its umbrella than perhaps any other community foundation in the world has achieved in the same time frame.”

And while many would question why WACF had to go into liquidation if there was a seven-figure sum involved, the answer for Mr Anderson is simple – sticking to WACF’s ethical values was paramount.

“Our intention and focus to preserve and grow the funds that had been raised by communities, not to erode them” he said.

“We were the trustee of those funds, they weren’t our funds, they were held in trust for the communities, we didn’t want to diminish them at all.

“It is incredibly disappointing. What we were doing is true philanthropy, supporting communities to support themselves.”

It is fair to assume the disappointment Mr Anderson expresses runs through the 43 communities with which WACF had involvement.

“They are very unhappy, some of their comments to me were they felt government should have played a role,” Mr Anderson said.

“We were looking for a locked-in commitment for three years of funding from the corporate sector and yes, we would have been interested in money from Lotterywest, however Lotterywest advised us they were unable to fund ongoing administration costs.”

“Fundamentally it is about supporting the community at the grass roots and whilst there were many corporations who were involved in specific WACF projects and programs with communities, the funding of administration wasn’t on their agenda.”

There was no typical donor to WACF according to Mr Anderson, with state and local governments approaching the foundation with different proposals for land and asset management, individuals and different corporate entities wanting to contribute to WA communities for the long term, in a capacity that allowed them to be non-directorial.

With so many different supporters and stakeholders in the organisation, Mr Anderson said it was disappointing none moved to support it before it went under.

“People just didn’t understand the concept of true philanthropy. They couldn’t understand why we weren’t directing communities,” he said.

“It was perhaps ahead of its time; people didn’t fully grasp the power of community at the grass-roots level and its capacity to build sustainability and efficiency and effectiveness at the grass-roots level.”

At present, the funds held by WACF are held in trust by the official liquidator PwC, which is negotiating with potential trustees to take over the role of managing those funds.

“Our understanding is those funds will be preserved. There is no reason why they should be touched. We left sufficient funds in the administration bank account to cover the costs of the official liquidator’s costs. The community funds should be earning income for their communities at the moment and continue to grow for future generations.” Mr Anderson said.