The profit vs purpose paradox: Balancing investment returns and social impact

Nicola Toyer: Good afternoon everyone and welcome to our webinar, "The Profit vs Purpose Paradox", which is part of Investec's charity expert series webinars, all of which are free and available on our Trustee Academy, including this one, which has been recorded. My name is Nicola Toyer and I'm Head of Charities at Investec Wealth & Investment (UK).

It's an absolute pleasure to have you all join us as we delve into a topic that lies at the very heart of charitable organisations, balancing profit and purpose. In the complex and ever-evolving landscape of the charity sector, striking the right balance between financial sustainability and fulfilling a charity's core mission is more critical than ever.

Today we're very fortunate to have two distinguished experts who will share their insights and experiences on this topic. First, we have Suruchi Saraf, the Director of Finance and Corporate Services at Dementia UK. Suruchi brings a wealth of knowledge in strategic financial management and organising organisational development within the charity sector.

I'm also pleased to welcome George Crockford, the Chief Operating Officer of the Teenage Cancer Trust. George has extensive experience in operational leadership. And has been instrumental in driving the trust's mission to support young people with cancer. Suruchi and George are also both trustees of different charities, and so have experience of sitting on both sides of the table.

We encourage you to engage with our speakers through the questions and comments via the submit a question facility on your screen, and we'll ensure to address them throughout the discussion, as well as making time for Q&A throughout the webinar. So thank you once again for joining us and let us welcome our speakers.

Suruchi, would you like to go first? 

Suruchi Saraf: Hi, Nicola. Thank you for the wonderful introductions. I am absolutely thrilled and pleased to be joining this event. I am the Director of Finance and Corporate Services at Dementia UK, and also a treasurer of an international charity called Overcoming Multiple Sclerosis.

Now a little bit about Dementia UK for our listeners. Dementia UK is the only national charity which supports families through its Admiral Nurse Service. We have specialist nurses called Admiral Nurses who provide free advice support and understanding to help families care for their loved ones affected by dementia.

And I'm absolutely looking forward to the questions we want to take on board as part of this seminar. Thank you, Nicola. And George.

George Crockford: Thank you for having me here today. My name is George Crockford. I'm the Chief Operating Officer for Teenage Cancer Trust. I only recently took up that role after formerly being the finance director for Teenage Cancer Trust.

I'm also a trustee and the treasurer for National Deaf Children's Society. So that's a national and international, even though it says national, international charity looking at supporting deaf children worldwide. Teenage Cancer Trust obviously does what it says on the tin, so you can work out what it does, which is quite useful for a brand perspective, that we are there to support teenagers and young adults through their cancer journey.

We're the only charity that provides clinical support aimed at that cohort, and I suppose thanks to us, we created the teenage and young adult cancer specialisms before we existed. If you were a teenager with cancer, you would either be with babies and small children or you'd be with 50, 60, 70 year olds undergoing cancer treatment.

And it was recognised there was a real need there for teenagers and adults to be supported in the right sort of setting. And that has helped drive up life expectancy and quality of care. But obviously working with the NHS has been more challenging than ever. Because I think anybody will know where they're at, the state of the NHS at the moment. So working with them is a real challenge.

Nicola Toyer: Great, thank you George. So I'm going to open with the first question. When we talk a lot about profit and purpose, one of the themes that is going to come through, I think quite strongly in, in this webinar is social impact and how we think about that.

So I suppose I'll start with you Suruchi, but it's a question for both of you. What does social impact mean for your organisation?

Suruchi Saraf: It's a very interesting question, Nicola. It's from my perspective, a challenging health and social care environment. And our Living with Dementia campaign makes a pertinent point that if you love someone with dementia, living with dementia, you're living with it too.

And therefore the social impact for Dementia UK is families facing the future with more confidence by improving the quality of life for families, improving the personal-centred care for families, and enabling the inclusion of families in decisions about care. avoiding crisis points and making sure that the families affected by dementia are fully supported in the journey.

George Crockford: Yeah, I think similarly, we've got that real focus, on our beneficiary, which is the young person themselves, but around that is their family, their support network. For example, the units that we build and support have got for even friends and family to come over and spend time with. The young person that they're working with or the family that they're supporting, and it gives them an opportunity to not just be around the young person, but think about that wider impact you can have.

And we do quite a lot of work with our funded partners, get very involved in that support with the young person so that even though they're there to raise money for us, we've got quite good partnerships with Aldi and Dominos, like Aldi provide food vouchers to the families because often People have to give up work to support, they might be driving a long way to take the person that's undergoing the cancer treatment to hospital.

There's obviously staying with them for parts of their treatment. So like often Aldi will provide free food vouchers to them, Dominos provide free pizzas to every one of our units every Wednesday. And they do that at a franchise level, not because headquarters tells them to do it, because they can see the impact and it helps the store feel like they're contributing something back to society.

So I think that's for us, building what you said around the kind of actual patient and the family. Sometimes you can bring the partners into that as well, so they feel like they're contributing not just money, but also something that helps people through that journey.

Nicola Toyer: Great, thank you. And in terms of balancing social impact with financial returns, what are the challenges that you see when doing this? And how do you address them?

George Crockford: For us, it's a tricky thing, trying to balance the different stakeholders. Because we're a young person's charity, young people have always got very high expectations about how we use that money, where we spend our money, who's in our supply chain, which partners we pick to work with, are they ethical partners.

So our beneficiaries come at it because they are a younger group of people with some very high expectations, whereas, say, some of the staff who work there, such as the nurses that we fund, they've got their own kind of expectations about what we should be doing. They don't think we should invest any money.

Some of them, they think all of that money surely could be used for services now. Why are you putting it away in the bank? Why do you have reserves? Why are you working with these partners? Couldn't that money be used for something else or elsewhere? And then we have the trustees, where we have a real mix of kind of investment bankers, people with that kind of real commercial experience.

Somebody who was once the chief exec of Superdrug, for example, comes at it from very commercial, let's get the return in. I'm not as bothered about some of this other stuff because the core thing is the service we provide to those that have got more clinical background as trustees. And again, struggle to see why we do this stuff.

Why are we investing money? Shouldn't we be using this just straight into services today? So it can make for some quite tricky conversations to navigate. I don't know if you find the same thing with your kind of different stakeholders, Suruchi.

Suruchi Saraf: Yeah, I think it's a kind of a similar kind of debate. I think obviously traditional investing is focused solely on financial returns.

But the very fact that we as a charity exist for public benefit. And therefore, the challenges I think we grapple with is around measurement. So while you have financial metrics like, revenue and profit, which are quite easy to measure, social impact is often quite difficult to quantify. And therefore, it's about aligning the financial goals with our impact.

And then I suppose the challenge is, of course, is about expectations. It's also about the changing environmental, social and governance considerations. And it's about what matters most to us as an organisation and what is our mission and without kind of compromising any of our ethics or our values and taking decisions on investments based on this.

Nicola Toyer: A lot to unpack there. George, you look like you're about to respond.

George Crockford: I think that values piece is really cool because it's how we try and deal sometimes with the mismatch of expectations of stakeholders is to use those values to help try and guide people back to this is why we've taken a particular decision.

Why do we have reserves full stop? Some stuff just needs some stuff and stakeholders need that explained. Why do we invest it in that way? Lots of communication. I think it's really important to help manage those stakeholder expectations, particularly when resources are really squeezed and. You're looking at exactly what services you invest in.

People obviously look at things where they think why are you doing that? Why couldn't you do something else? So I think lots and lots of open communication about why you've done that. Like you said, what measurement you've used, what criteria you've used, being really transparent around that, can really help move the conversation forward.

And sometimes throw up new ideas you didn't think of, because you're being really clear about why you've made a decision. So that people are like, oh, have you thought about this then? And they will throw up things you haven't thought of.

Nicola Toyer: Yeah, absolutely. I'm going to pick up on something both of you have mentioned around balancing the views of different stakeholders, but also around that aligning to what you're doing to your values.

I think when we're talking about investment returns in particular, one of the things that really comes up a lot is ESG or ethical investment and how you incorporate that. Into your charity and focus on that values alignment. But I suppose there's that question of what does ethical really mean?

Suruchi Saraf: Who wants to go first?

I don't mind, George, if you're okay with that. So I think obviously ethics for us as Dementia UK means we are having beneficiaries at the core of whatever decisions we make. Now on top of that, of course, we recognise that we are a health charity and therefore ethics for us could mean lots of things.

So it could mean things like quality standards. It could mean things like, making sure we are living and demonstrating the right values for the organisation and externally as well. It's about health maximisation. It's about understanding areas of data confidentiality, data privacy even. When we talk about today's day and age, we have to also make sure that, we address some of the concerns around gender equality.

And around balancing the benefits and risks and risk is such a broad area because it's very different depending upon, the appetite and, the culture which is existing in the organisations.

George Crockford: Yeah, I think probably I wouldn't agree with everything you just said there. And I think for us, it's about working with the younger people in particular. We, our value is actually based on what young people told us they wanted us to be. So our values were very much driven by beneficiaries. For us, it comes back to what was the guiding principle that they want us to follow.

So we look at things like who's in the supply chain. Are they being treated in a kind way? I suppose the way we tried to simplify it for staff. Obviously, we try and put some more details around that. Try and as much as possible, make sure all our policies reflect that principle, like you've been kind to the environment, you've been kind to people in the supply chain, you've been kind to the partners that you're working with, and then try and set out some behaviours that sit underneath that because that was something that the young people we were there for really wanted us to think about.

So using that as our guiding principle to make sure that it might be that some people might not agree exactly with that, but at least you're doing it in the kindest way possible because that is the best way to deliver the return.

Nicola Toyer: Yeah, I think that's a really good way of thinking about it.

I'd be very interested, George, and this might be another question for you to say how does being kind translate into how you align what you're doing with your investment managers and how do you work with them to align your investments to those principles? I

George Crockford: I think for us, it's really just having that conversation with them about that when we set it up, that's one of our kind of guiding principles.

And obviously they do their very standard kind of thing is the ESG type return. Here's some of the stuff that because it's an ethical portfolio is ruled out automatically. So there's some sensible things in that we won't invest in anything that may or contribute to the to cancer. For example, that's quite a self-evident thing.

We wouldn't want any money invested in, but it's that, which businesses are you working with? How are those businesses working? We just try and do a little bit of due diligence in house around some of them because it's not something I think they. By default report on and for us to ask for that additional reporting, probably push up the fees.

So we do some of that in-house ourselves to just look at what's in the portfolio. What do you know about those people we're working with? And like our media team just adds basically from the list of companies that are in the portfolio, they just add that to their monitoring to see what's going out in the wider world.

Are there any negative stories around like some of those partners? And we're not directly working with, but through our investments, we have some sort of stake in. So we try and use that to keep an eye on what's going on and whether we need to react anyway.

Nicola Toyer: Great. And what about you, Suruchi?

Suruchi Saraf: I think we obviously pay a lot of attention to our investment policy, which is our guiding principle around investments. So from an internal perspective, of course, understanding the restrictions, given we are a health charity, the specific objectives which we want to achieve out of the investments, understanding, and defining the purpose of our investments, and also understanding what is our stance on the ESG, or the environmental, social, and governance considerations.

Now this is of course the work we do within the charity and therefore likewise understanding the investment manager's approach and understanding if there are any discretionary portfolios to reflect, the organisation's specific requirements. But all of this can only come into fusion when we are talking about, regular reviews and having these regular discussions with investment managers to ensure that we are aligned at all times.

Nicola Toyer: Fantastic. And I'm actually going to go to our first audience question because it's along the same subject that we might go somewhere else. When you're selecting your investment managers, do you use your organisation's principles and values in selecting that process? And I'm specifically thinking going beyond the investment process itself.

Does that factor in?

Suruchi Saraf: Absolutely, yes, for Dementia UK.

George Crockford: And I wasn't here when we did Teenage Cancer Trust, but I think that definitely was a key part of the process, and is a key part of when we evaluate their performance, it's not just that financial performance and return, but how we think they're living up to some of those expectations we set around how we expect them to be working.

Nicola Toyer: Okay. Good. I would ask if there's anything specific you'd look for when doing that. I don't know if that's a fair question.

George Crockford: So things like EDI, we would look at, like I recently, it's a different subject, but recently appointed new auditors. And that was a key part of our selection criteria for a new auditor, in fact, was around like, yes, some of their environmental approach.

How would they keep the audit? As green and carbon neutral as possible, how do they deal with things like equality, diversity, inclusion? So actually, what are the stats around their business? Are they delivering progression for different groups up to a senior level? Not just they've got a nice strategy and I can say they've got a strategy but actually can we see that they've done an improvement?

So we take the same thing with our investment managers when we go to reappraise them. We'll be looking at are they delivering those things? Are they improving the diversity in the workforce? How are they trying to reduce the carbon impact? And actually look at their metrics that they're reporting on. To give us that assurance there's really tangibly something happening, not just a, they've got a strategy somewhere, but that's just sits in a box till it comes to refresh it.

Suruchi Saraf: Yeah, I think everything which George has said is something we review as well. But in, we also look at if there are investments which are towards advancement of health. Or are they investments, which probably in the future is not something we are comfortable in terms of our missions and objectives. So we make sure these criteria are carefully evaluated.

Nicola Toyer: Great. And last question on investments, and then we'll move on to something else, but have you found there has been a, is there a penalty to be paid when you take ethical investment considerations into account?

Suruchi Saraf: I wouldn't necessarily call it a penalty, but I think sometimes the choices we make could drive the costs accordingly. And therefore it's about managing expectations in terms of. Investing, which is probably in the benefit for, for the benefit of the charity, really.

George Crockford: Yeah, I think it's one of the live conversations we always have with trustees, because like you said, some things you're trying to make sure you're actively investing in things that could benefit society and therefore, hopefully, lead to better health outcomes.

and therefore less demand for your charity in the future. Hopefully, I think all charities ultimately would like to not exist because the need isn't there anymore. So if you can use an investment, even in that long term, it might be a short-term financial penalty, potentially. I think in particular, a lot of charities felt that over the last year, where because of the energy crisis, petrochemical shares really shot up.

It's up because most charities do not invest in that area. We, that I suppose is a financial penalty. We didn't see that gain in our portfolio, but hopefully over the longer term, we'll see the gain because we're hopefully improving how things are going to go and with better environmental impacts, hopefully will lead to better health outcomes and therefore less demand.

Nicola Toyer: Yeah, I think that energy example is a really good one. I'm actually going to give the investment manager response to this question as well, because I feel staying silent would be wrong. I don't think there's necessarily a penalty to be paid, but usually what happens when you do introduce ethical restrictions is it increases the volatility of your investments and that tracking error away from the benchmark.

So the outcome, if you're a long-term investor over. 5, 10, 15 years, you should get to the same place as if you didn't have those restrictions. It's just you may end up having a little bit more divergence from the benchmark as you go through. So we would always encourage our clients to be looking at having that mission.

Based and values-based investment so that you can align with your own purpose and be comfortable with the investments in your portfolio So that's the investment manager hat off again And I'm going to move on to the complex world of reporting so have you how have you approached both that social impact element of reporting, You And how have you navigated that?

George Crockford: I think for us it's a really new area. I started last January and it's been something the charity hasn't done lots on, to be honest. So lots of reporting very much on our core. What we do, so how many young people we've supported, what sort of health outcomes we've helped achieve, all those sorts of areas.

We've improved some of our reporting around things like our own diversity inclusion, so improved some of that reporting way beyond the kind of statutory requirements. But there's still much more to do in terms of what's our wider impact, because we just haven't had the processes in place until recently to start to measure.

How are we using our supply chain? How are we using our investments? I think for us, it's still quite early days, but definitely something we want, will want to do, requirements or not, would want to do more on, to really show to our kind of beneficiaries and stakeholders. And really signal that is something that we take really seriously and are actually actively measuring.

For us, it's an early start to that process. And I think for us, it's really about what those metrics are we want to report on, to think particularly around our supply chain, how we're working with suppliers to have that wider social impact, but also with a very relationship fundraising-based organisation, to how we work with all those different partners we have relationships with, be they trusts, philanthropic people that give us lots of money, or we get a lot of money through music and entertainment.

So how we work with the music and entertainment industry to help that industry actually have a wider impact. So I think there's more we can do to bring some of that out in our reporting, because it's something that hasn't, we haven't done that much on in the past. It's very focused on cause and showing, this money, the money you give us goes to doing these things, which is a great thing in terms of it being a fundraising kind of Proof of the money comes in and this is what we use it on, but we need to do something more, I think, and I think a lot of fundraisers and people that donate expect more now, they expect to see more of that in their reporting, they expect to see more clarity on that wider impact that we're having beyond just the cause.

So it's definitely something we're working on more, and it's up to us to build the infrastructure underneath to capture the information. Before trying to report more of that in the public domain.

Suruchi Saraf: Yeah, I think where we are in terms of Dementia UK and the social impact reporting, of course, we've got kind of some measures in place.

So we do have quantitative and qualitative methods to collect data, understand the care experience, the quality and, the reasons why people want to contact our helpline. Thank you. But because we have seen a rapid expansion of our activities in, the past few years, there's a lot more we need to do in terms of, having an overarching understanding of our social impact.

I think it's also about, a very tricky measurement criteria. So whereas in a fundraising world, you can have Returns on investments and you can have kind of key measurables, but measuring social impact in terms of the financial investment with the charities making is something we are very keen to develop as we continue to grow in progress.

Nicola Toyer: It's interesting you touch just on how challenging it is to measure that impact. Are there any particular metrics that you use and do you use them on a regular basis?

Suruchi Saraf: We obviously want to try and understand how admiral nurses are making a difference to families living with dementia.

We want to understand how we promote. best practice in dementia care. And we believe in taking feedback on experiences of families using the admiral nurse services, which will obviously help us to improve our service as well towards, the beneficiaries. So there's lots of things we currently do, but then we equally understand that dementia is, a growing concern in the society and therefore the areas where probably the impact needs to be greater and where can we make sure the outreach is available.

So I'll give an example. So around 10 years ago, the charity had 80, around 80 plus nurses. We are now coming close to 500 nurses, but there are still belts of concentrations. And we want to make sure, there's uniformity in terms of the availability of our service. And how do we therefore, balance that?

How do we therefore take care of impact, which is, equally spread across the four nations? So there are lots of things we need to do, but certain things we already have in place.

George Crockford: Yeah, we use a sort of similar kind of approach of trying to get things like patient data. So we ask for weeks in a monthly and then a quarterly more detailed.

kind of thing out to each of our units and to the lead nurses that we have looking after a region. So it gives us some quantitative data of like how many people, how long they've been in for, what sort of treatments and cancers, anonymized at a high level to give us that. But we also have an app that we developed for young people that are in the units called IAM that allows them to rate how they're doing.

And we use that in part to direct the services because we can see that there's some people struggling might need additional support, but also it gives us hopefully those trends around that. So you can see that from the start of their cancer journey, coming into treatment, how they've gone through that journey.

And hopefully it might be a bit rocky on the way because you might perceive news you weren't hoping to hear through that journey, but you can generally see that trend of improvement in terms of the impacts, not just to suppose in their health, but that kind of. mental being, their relationships with their families, etc.

So it can, you can really use that to give you a sense of what's going on, as well as asking for kind of data from the NHS Trust. So as part of our funding agreement, so we're giving you money for these roles. So in return, we expect a certain level of data around what the impact is. So that helps us with, Those sorts of aspects of things, and I think because it's a young group we work with an app was the way to go because they liked interacting with that.

And we provide like why the number one need that young people have in hospital is Wi-Fi. Good Wi-Fi is what they wanted. The other stuff was further down the list. Wi-Fi and a fridge were the top two things they wanted while they were in hospital. So we use the Wi-Fi data again to get a sense of how long people are staying in hospital for, because you can see that person, so we can see that young people are staying in hospital for a long time.

They're sicker for longer, essentially, so more and more treatment is happening at home for certain types of cancer. But when young people are coming to hospital, they're staying for longer. So we've really had to pivot our services around. You're not just in as a day patient as much anymore, you're coming in for long periods of time, and actually the services, the shape of the units, like how the units are actually set out needs to change to adapt to those changing needs.

As to some of the workforce that we need. And a bit like you said, Suruchi, one of the problems we've got is inequality of service, where there are some areas of the country where we've got more staff, some we've got far less. And it's interesting how ring-fenced fundraising often drives some of that where it's easier to get fundraising to happen in the south of England.

That's just how it is. And often they want to ring-fence that fundraising only to their particular local hospital or particular region. That means we end up with, say, five staff in the northeast of England covering 5, 000 square kilometres. Whereas in London, we've got the largest proton beam specialist unit in the entire world, which is great, but means that there's a real inequality, therefore, in the treatment and offer we can provide.

And we're aware of that, but it's a real challenging issue about how we convince funders to not restrict it to a region, because actually they're driving health inequality by doing that. And that's in terms of social impact. That's a real issue that we know across all of society. There is those big health inequalities, and it does worry us that in some respects we end up contributing to that.

So improving the health in some areas. But the areas that really need it the most, the areas that are often most difficult to raise money.

Nicola Toyer: You've given us a lot to unpack there George. I actually think it leads nicely into a question we've had from the audience. So there is value in measuring the impact of what you're delivering, but alternative choices could have an even greater impact.

How do you assess if you're making the right choices on how to allocate funds and resources? Go for it George.

George Crockford: So what I've just said, I think hopefully picks up on that. I think we really try and look at. What are the outcomes in different areas, based on what young people are telling us through that app data. We look at the volumes of patients coming through, talking to our lead nurses, and using the data they provide, and the NHS provides, and I suppose what we can see is a health inequality.

What we can't do. It's addressed that very easily because basically what we end up doing is using our restricted funds in the south of England in very broad terms and our unrestricted funds as much as possible to the north of England, but over time fundraising has become more and more restricted. So donors want to restrict that fundraising.

They feel like that's the right thing to do and I get that. So they feel like they're making sure it's going to what I want it to go to, but they're probably inadvertently restricting it. therefore contributing to some of those inequalities. So we try and work quite hard with our funders, particularly people like Aldi and Domino's, to not restrict their funding.

They might restrict it to nurses, which is fair enough, or to funded staff, but they don't restrict it to regions, which I think is really great because that's really worked for us showing them that data, showing them the inequalities has helped us take off restrictions and make sure there aren't restrictions.

There's still more work to do with funders to show them like that's an unintended consequence. That they're having, and what we don't want to be doing is, we're, fundraising is a very tough environment. If you're just chasing where the money is, that could lead you to not necessarily delivering the right service for your beneficiaries.

Because some things, unfortunately, are easier to fund. If I wanted to rebuild all the units, I could quite easily, that's quite an easy thing to fundraise for, it's a nice tangible thing that you can have built, have a picture taken next to it, it's great. But if there's no nurses in it, it's not really very helpful at all, but it can be more difficult to raise money for those kinds of ongoing costs that people perceive the NHS should be funding, or perceive somebody should be funding.

And so they don't want to donate money for those sorts of things that can be, we don't want to follow the money, otherwise that could take us down a very different route, and not necessarily meet the needs of beneficiaries.

Suruchi Saraf: I think obviously, I would like to add we can have restricted funds which the charity has established in terms of kind of the helpline and the clinics, which are very long-established strands of our charitable activities.

But I think we are constantly thinking about expansion and increasing our outreach and how we can even support our beneficiaries more than what we can, what we are currently doing. So we are looking at investment in, specialist consultant admiral nurse services. Like for frailty, looking at end of life, for instance, looking at LGBTQ for instance, also thinking about sports and dementia and how they are interlinked, because there's a lot of research which kind of provides evidence about strong linkages in that area.

So it's really about how the impact is not only evolved, but it's also deepened within our passion to make sure we support the beneficiaries.

Nicola Toyer: Thank you. So just again, picking up on some of the things that have been said. I'm hearing a lot about the importance of educating funders and donors around both restricted and unrestricted funding, but how do we, how do you do that? How do you educate your donors and supporters? And then I'm going to add to it around the importance and benefits of balancing social impact and financial returns.

George Crockford: I think for us, it depends if we've got a longstanding relationship. It's easier with those funders that we've worked with for a long time to talk them through. Some of that, those, we've had corporate partnerships for many years. We've been very lucky to have corporate partnerships for many years.

It's actually been quite easy to have those conversations because you've built up that relationship with them. You can take them through the information and those partnerships go beyond, just money. like they provide us advice on how to run your procurement function. Essentially our NHS model is a franchise model, Domino's is a franchise business, so they often lend lots of support around, how do you manage a franchise?

They've learned stuff from us as well that they can apply to their franchises, so it's worked quite well as a kind of mutually beneficial kind of project to look at that stuff. Where it gets more challenging is with those new funders, because obviously you want to secure their support, You don't want to put them off.

If other charities aren't asking those questions, you don't want to be the awkward charity that's trying to put them off. So sometimes you need to get them in the door and then start that education piece to help them understand, this is the unintended consequences maybe of funding in that way.

So it can be You know, it can be tricky, but once you've got that relationship established, it's fine. We've got a lot of support for the music industry, and we're quite lucky the music industry doesn't tend to restrict things because, how should I put this, they're quite an informal bunch, the music industry, it's, they're not as worried about restricting things, they're like, oh yeah, here's some money, cheers they're not, because that's the way they operate as a business, which is great in some respects, but also very difficult when you need to have bits of paperwork filled out, Yeah.

Yeah. And you need them to record things like gifting kind and they've not kept any records of anything. So it's a lot of hassle for our end, but it's nice that they're easier to work with. So we take care to tailor it really for each funder and how they like to work and really need to get them in the door.

Get them bought into the cause, and then you can explain how they can have an even greater impact than they're probably already having.

Suruchi Saraf: I think from, our perspective, obviously donors and supporters always want to know how we manage our finances and they're really interested in our cause and they are You know, it's a long-standing relationship as George has mentioned around, not just looking at short-termism, but looking at the long range of opportunities which these partnerships can give us.

And corporate partners and funders in particular who are really interested to know, how we balance our social impact, how we make sure, our financial returns are aligned with our mission and vision is. Now we have obviously regular conversations with them.

We have progress meetings. I mean we communicate that via our funding applications for any new bids, etc. And of course we take the opportunity of the trustee annual report and accounts for our, general supporters to make sure we are disclosing transparently our position on kinds of investments. So we make sure all of these measures are in place.

Great.

Nicola Toyer: Just having a couple more questions come through on investments. Just going to go back to that. How do you measure the social impact on your investment portfolios? And is that an area where you are well served by your investment manager or advisor?

Suruchi Saraf: So I think it's about articulating your investment needs and priorities very clearly, which is what we have done. And then, making sure that, the engagement with the investment manager is really clear in terms of our expectations. And therefore, the managers are then better able to meet our objectives.

So that's how, what we found really useful.

George Crockford: Yeah, we take a similar approach. It's just that regular communication. You get your regular updates, but that kind of having time with them, at least on a quarterly basis to go through how things are looking, how that works and trustees at least annually sitting down with them.

Actually, one of our trustees likes to have a more regular dialogue with the investment manager, which I think is quite useful to help keep the wider trustee board assured. that this stuff is being looked at and is under control.

Nicola Toyer: Okay. Yeah that's exactly what we would expect as well sitting on the other side of the table.

We've, I've also had a question about if either of you have had conversations with your boards around going direct, putting your investments directly into an impact-first portfolio. So not just thinking about negative screening, but really looking to deliver impact that's aligned to your mission. Is that a conversation that's happened or been thought about at any point?

Suruchi Saraf: I think we are at probably the early days in terms of our kind of investment strategy. The board are really very knowledgeable, very experienced, and we are also fortunate to have a board member who specializes in investments, but that's not something we need.

currently are considering because of the instability of the markets and managing some of the expectations in terms of the returns, again, aligned with the whole social purpose conversation we are having. So that's where we are in our journey.

George Crockford: Yeah, and I think we've never done it through investments, but we have invested money.

In a fundraising capacity in that way to around our cause in particular, so like we have, we've had a young person who was trying to be designer had to pull out of university to go to their cancer treatments. And actually we supported them working with Aldi for them to design a range of bags for life that then Aldi sold.

And it helped them get their career back on track. So it relates to cause, help them get their career back on track, help them do, they did some lots of social media around it, raise awareness around cancer, how they probably left the diagnosis too long, because they written it off for something else.

So it was a way of linking it back to Cause. We put obviously put some money behind it to get those bags made, etc. If we wouldn't, we'd never considered, doing direct investment. In a kind of more portfolio-based approach. It's been more taking particular examples like that one I just said there.

Again, let's put some money behind that because that is related to cause but also will generate a return.

Nicola Toyer: Now that's really helpful. And has there been any discussions in either of your organisations about looking at a B Corp certification as a way of demonstrating social impact?

Suruchi Saraf: No, not yet.

George Crockford: No. I think it's only come up very tangentially and it's around is that market actually big enough would you really even more as you said like peaks and troughs of exposure that's really narrowing down what you might be exposed to at this stage.

Nicola Toyer: Okay, good. And then just moving on to. Something else, what role do partnerships and collaborations play in enhancing the social impact and financial sustainability of the charity? I

George Crockford: think for us they're because we're a very relationship based organisation in terms of fundraising and working with partners as I've said so I think for us it's like absolutely central like the reason why Teenage Cancer Trust has had partnerships with Aldi going for over seven years where they've raised 10 million pounds in that seven years.

It's because it is very much that, how do we work together to achieve our common aims? Like they first got into it as a way of creating morale and motivation in stores. But actually over time that's turned into like new product lines. It's Kevin the Carrot, which we're very sought after and end up on eBay.

They've got the Teenage Cancer Trust logo on them, they were sold on our behalf. That was from staff working with our staff, thinking creatively about new ways of making money and for the charity and how can we encourage things like healthy eating, because we know that poor diet contributes towards cancer or can.

So like how can we work with them? So we did a very healthy cookbook that came out at Christmas in partnership with them. So that for us is really healthy. important about how we work together. Yes, they've got their own aims as Aldi. We've got our own aims, but actually there are some overlaps there.

So let's work together on those in terms of the wider impact we want to have on society.

Suruchi Saraf: I think we had Leeds Building Society as our partner for many years. And, We are fortunate we are now partnering with Nationwide and we've got a three year partnership with them currently and, it's all about, creating that support for dementia particularly understanding the healthcare and the pressures we are seeing from the economy and therefore how this partnership can really make sure the organisation can have a wider outreach.

Leeds Building Society was quite crucial for us in terms of planting the seeds for our clinical programs. And of course, with the partnership with Nationwide, we are now really hopeful that we can give it an expansion at a mega scale. than what we previously have done.

Nicola Toyer: Great and I'm going to go back to something that was touched on earlier something both, I think both of you related to. How do you balance the different opinions of trustee boards and the different backgrounds that everyone has when considering both maximizing the value from a charitable perspective, but also the impact that you're having.

Suruchi Saraf: I think I have been very fortunate, shall I say, because the dementia UK trustee board are, very supportive, which makes a significant difference in terms of decision-making. Of course they do constructively challenge us as executive team, but that's only to bring the best out of us.

Now given we have such a diverse board, we make sure decisions are taken in quite a rounded way and we make sure investments are not just considered purely from a financial return perspective, but we make sure all the other aspects are equally understood and catered to before proceeding with anything, which kind of gives us, a sense of comfort, that we are heading in the right direction.

Now we have started with Tolerance on, how much we want to set aside as long-term investments, that's bearing in mind the requirements of cash for the charity for the future, given all the expansion plans coming up as well. And it's really useful to have You know, board's view in terms of, whether we are getting it right, whether it's still appropriate, whether we need to make suitable amendments as we continue to proceed and go forward, but it's also about recognising and getting the right balance because we are here for the beneficiaries.

Investment obviously doesn't become the primary purpose objective then.

George Crockford: Yeah, I think similar to what you've just laid out there, I think, sometimes I'll have to do one to one sessions with some of the trustees to help them understand like some of the issues, help them navigate some of this, like we've got Great trustees that have obviously got a clinical background, but just maybe talking them through before you get to a trustee board meeting.

This is why we're bringing this is how this fits into the bigger picture, giving them that chance to ask me what they might feel are stupid questions. There probably aren't any other trustees that have got the same question because of that chance to raise those with them.

And recently I did a video with one of our trustees who was formerly one of our nurses. I did a video with her talking about finance where she could ask all the questions that nurses would probably ask. We sent that out to all the nurses just to give them that chance to see it and say "oh, okay. Now I understand why you do it that way".

But it's a good way of just engaging some of those broader stakeholders outside of the boardroom. But they will write into the board if they feel like their views aren't being heard or picked up, but help them understand some of this stuff. So I think everything you said, and I think for us, it's like that communication and chance for trustees to explore things sometimes in a one-to-one or smaller group setting can be quite helpful as well.

Nicola Toyer: What an interesting way of getting access or getting that message across. So I'm just going to finish with a final question. How do you foresee the future of charity investing involving in terms of balancing social impact with financial returns? And what trends or challenges in the market are you most concerned about?

Suruchi Saraf: Wow, that is such an interesting question, Nicola. So I think it's the way I would put it is it's interesting times ahead. Obviously, we've just got a new government in place in the UK. There are upcoming elections in US, which obviously Play a very heavy weightage in terms of the stock market movements, the financial returns from a global perspective.

We are then also from an external perspective looking at, the challenges with fundraising, particularly with the inflation, which we have seen recently and, the other political uncertainties looming upon us. And therefore, I think it's a delicate balance to align impact and returns and, probably diversification strategies in companies, which kind of may create ethical dilemmas inherent in kind of charity investments.

So lots to look out for lots of challenges. Of course there are trends, but there are lots of, unforeseen to come our way as well and making sure you know that we recognise them and make sure that we take decisions which therefore are suitably aligned under the circumstances given it's an evolving landscape.

So that's my view.

George Crockford: Yeah I think that's I've got the same I think in terms of that investment kind of wider economic situation. I think Similar, I think that's some of my kind of concerns and how things are going forward. And I think the opposite investment was on that fundraising side, I think. The more and more pressure there is on charities, I think there's been a clear steer from the Charity Commission recently that you shouldn't be turning down funds, but that often leaves charities in a difficult situation where there are some organisations that think yes, you might have done some stuff that has contributed to cancer, so we'll give some money to a cancer charity.

It's now more difficult to say no to that. And you could, yes, you could turn that money into something good, but it does put you in a difficult situation where fundraising is tight. It's a very tight market. So when you're going out to raise money, there's less and less of that kind of charity of the year type of model out there now than there was before, and so it can put you in a difficult situation where you get offered money, and you can't really say no to it.

It could be at odds with your partner ethics, and I think we will see more and more charities, even struggling to make investments, where they're dipping into their cash and their reserves to try and maintain services, whilst also not seeing fundraising recover as quickly as maybe some charities had hoped.

I think a lot of restructures happen across the sector, and I think that will probably continue through 2024 into 2025. And that may impact how charities do invest or don't invest and might want to dip into those reserves that could make charities much more short-term focused across the whole sector.

Nicola Toyer: Yeah, some really good point points there. So on that note, I'm going to say, are there any final thoughts, anything to if you want to leave the audience with?

George Crockford: No, I think it's just been good to talk to these issues. When you get invited along to these things to think about these things yourself again and reassess separately, just to anyone listening along, I think it's that it's a good chance to just take a step back, isn't it? And go, actually, how are we doing on this?

Have you thought about all these different things? Gets you thinking about your approach. And I think I know that we're going to stay in touch, aren't we, and talk about some of the stuff that we do, so hopefully other attendees will do that and use their networks to have these conversations with others, because I think that's always a good way to go, is to just have a chat with somebody else and see how they approach it.

Suruchi Saraf: Absolutely. I think very similar views. I think it's about networking and having the peer group support to understand and discuss some of the topics, which I think we all are absolutely having, a similarity in many ways being in the charity sector. It's about recognising that, the investments of course are important because we want to make sure we are managing, the beneficiaries' funds carefully until the time, they are put towards, the utilisation of our kind of charitable activities, but it's about also making sure that we get the balance right.

We are not pursuing kind of returns aggressively. And I think it's been useful to have this chat and there's so much to think about and reflect upon even while I was talking, which obviously I want to make sure, I continue deep, diving deep as we talk.

Nicola Toyer: Thank you. And thanks very much to both of you.

It's been a really insightful conversation. To our audience, thank you very much to those who submitted questions. If we didn't get to them I'm very sorry, but I think we're just about out of time. So thank you very much for joining us and we will see you next time. Thank you