Dramatic investment rebound  

The Trust’s investments staged a dramatic rebound in the first half of the 2010 financial year, climbing in value by $129 million to $918.6 million.

As a result, we have been able to set a grants budget of $23.7 million for the year through to March 31, 2010.

The Trust relies on investment income to fund the grants budget and late in 2008 the investment fund was hit by the world financial crisis. It fell by $200 million and grants had to be put on hold until September 2009.  

Since April, investment markets have performed strongly and the Trust is on the road to recovering the value lost during the crisis.

However, important lessons have been learned and we are determined to ensure the Trust is not forced to make short-term funding cuts again.
Traditionally the Trust has distributed a percentage of investment returns as community grants, setting the budget at the end of the financial year, based  on the previous year’s returns.

In the good times the annual grants budget has been as high as $65 million, but when returns fell, so too did the grants budget.

The global market meltdown has shown that there is a weakness in that funding model. Community groups need continuity of funding, even when times are bad.

With markets still unstable and unpredictable, we have set up a mechanism which will take a percentage of returns each month and commit them to the following year’s grants budget.

Already this year we have put aside $27 million for the 2010/11 grants budget. If markets continue to improve, we will be able to put aside more.
When the Trust was forced to halt grants it did so to protect the long-term value of the community assets we hold in trust. We have achieved that, but we also know that community organisations have struggled to find funds during tough economic times.

The Trust is committed to the long term support of communities in Auckland and Northland and the new structure will ensure that we can continue that support in good times and in bad.