Co-chair’s report for the period 1 July 2021 - 30 June 2022

Tēnā koutou katoa,

The Rule Foundation passed a significant milestone in the second half of 2022: the cumulative disbursement of $1 million in support of Rainbow communities in Aotearoa since the Foundation was launched in 2007. Half of these disbursements have occurred in the last three years, evidencing the significant impact of the Rainbow Wellbeing Legacy Fund on the Foundation’s work. The Trustees are immensely proud of this increase in direct funding to rainbow-led organisations. It has enabled the development and expansion of services for young people, collaboration between rainbow organisations, development of knowledge and understanding within ethnic rainbow communities, opportunities for rainbow artists, and much more. The Foundation has also increased its influence within the philanthropic sector, with a strengthened focus on promoting the work of rainbow communities to mainstream philanthropic organisations.

Like many others looking to the years ahead, we are considering the ongoing impacts of COVID-19 and what recovery for our communities looks like. In particular, this involves the development of a new strategy for the Foundation - to be released in the first half of 2023 - and tweaks to the application process and criteria of our two funds. Key initiatives are: expanding the resources we have within the organisation to support applicants, increasing the size of our pūtea (funding), and deepening our engagement with others who make grants to rainbow communities in Aotearoa.

Another exciting development is the move to a co-chair model. Toni Duder has joined Duncan Matthews to lead the Rule Foundation as Co-Chairs through until the next AGM in September 2023.

The Peter Rule Fund

The Peter Rule Fund (PRF) operates year round with no specific application deadlines and applications are reviewed continuously. Grants awarded are generally up to $5,000. COVID-19 restrictions that were in place from August 2021 through until April 2022 saw - for the first time - a need to delay payment of some grants for activities that could not occur under the alert level or traffic light systems. The PRF continues to award funding to over 70% of applications received.

Reviewing the opportunities and challenges ahead, the Trustees have decided to consider reducing distributions from the PRF for 12 months from 1 April 2023. This is for two reasons: first, the reduced performance of our investments over the last financial year, and the second, the need to focus on other activities of the Foundation that have the potential to positively impact rainbow communities at a far greater level than the PRF can provide through direct giving. Details of this change are to be finalised and will be communicated in early 2023, however the Trustees are committed to this reduction being both temporary and to maintain some level of giving from the fund, no matter the underlying financial performance of investments.

The Rainbow Wellbeing Legacy Fund 

$200,000 was again required to be distributed from the 2021 top up to the Rainbow Wellbeing Legacy Fund (RWLF). In addition, a further $99,999 was secured from Foundation North to contribute to the 2022 round. The additional funding allowed for an increased number of applications to be funded. A total of 29 applications were received, with 15 being funded and a further 1 application moved into the PRF.

The 29 applications received for 2022 represent a significant reduction in the total number of applications received compared to previous years (48 applications were submitted in 2021 and 54 applications in 2020). Early in 2022 we surveyed previous RWLF applicants to identify ways to simplify the application process and provide better guidance on the applications likely to be successful. This resulted in updated criteria being published on the fund’s webpage, and trustees holding several engagement hui with potential applicants to answer questions in an open forum. Overall, we considered the smaller number of applications to be a success given the much closer alignment to the funds’ purpose evident in those applications; indicating that less people had spent time on submitting an application that was unlikely to be funded.

Initial indications are that the top up from Foundation North is likely to be repeated and expanded for the 2023 round of the RWLF. Our aim is to have the top up secured and announced prior to the opening of the RWLF 2023 round on 1 June, and to review some of the existing limitations on the fund - such as the $20,000 per year limit on funding awarded - in light of the increased funding available to distribute.

Finances

Grants awarded in the 12 months to 31 March 2022 totaled $260,563 - another record giving year for the Foundation. Increased granting, COVID restrictions, and multi-year funding has necessitated a move from cash-based to accrual accounting, with $67,334 in awarded grants being carried forward into the current financial year. 

Given the level of volatility and uncertainty present in the financial markets in 2021 when the $800,000 top up to the RWLF was received, a portion was put into a term deposit as a hedge against a drop in markets during the years when the $800,000 was required to be paid out. This term deposit is reflected in the Foundations financial statements for March 2022. Given the negative performance of markets in the 12 months preceding distribution of the 2022 round of the RWLF, this term deposit was liquidated to fund disbursements in October 2022, avoiding the outsized impact that drawing down on a managed fund would have had at the time.

Despite a turbulent few years in the financial markets, the annualised return on our investments with Milford Asset Management remains competitive and we continue to have confidence in their management of our funds.

Partnerships

The Rule Foundation’s profile within the philanthropic sector in Aotearoa has grown significantly in recent years. As a member of the Philanthropy New Zealand (PNZ) network, our Trustees and funding activities have been profiled several times in the PNZ weekly newsletter. Further, we are a core organising member of the Rainbow Funders Rōpū alongside the Tindall Foundation, Foundation North, J R MacKenzie Trust and the Wayne Francis Charitable Trust. 

The Rainbow Funders Rōpū meets regularly to share knowledge and opportunities related to the funding of rainbow communities in Aotearoa. In the preceding two years a total of $190,000 has been raised across ten funders - including $5,000 from the PRF - to support the Rainbow Support Collective (RSC*). We are encouraged by this model, allowing greater funding to community initiatives than would be possible through direct giving from the Rule Foundation.

As alluded to above, our partnership with Foundation North (FN) continues to strengthen. Current co-chair, Duncan, works day-to-day with the FN team in a capability development role. Former chair of the Rule Foundation, Stephen Park, was appointed to the Board of Foundation North in 2021. Foundation North distributes over $45 million per year in Tāmaki Makaurau (Auckland) and Te Tai Tokerau (Northland) annually. The Rule Foundation’s strong connection with FN, combined with a strategy at FN that names rainbow communities as a priority, has enabled a productive working relationship that has significantly lifted the levels of funding to rainbow organisations in recent years.

*The RSC is a collective of the key rainbow-led organisations across Aotearoa, working together to share operational knowledge and present a stronger advocacy voice at the national level.

Trustees

At time of writing the current makeup of Trustees of the Foundation has been in place since June 2019. All trustee terms - except for Joy Liddicoat whose term was renewed in 2021 - come up for renewal in 2023. Additionally, the three year terms of the two sub-fund advisors appointed to the RWLF expire in May 2023. Trustees are engaging in ongoing discussions regarding the evolving needs from Trustees and sub-fund advisors to ensure that appointments and reappointments continue to meet the needs of the Foundation for the years ahead.

Operational Update

Michael Sousa joined the Foundation in July of 2021 in the role of Administrator. Michael is the first paid member of staff for the Rule Foundation, and has served to significantly ease the burden of weekly administrative tasks on our volunteer Trustees. Further, the Foundation engaged the Accounting Hub to maintain our books and prepare year end statements. These changes have continued to support the rapid evolution and growth of the Foundation that began with the adoption of SmartyGrants in 2020. 

As alluded to earlier, the Foundation has determined to invest more heavily in operational resources and capacity in the years ahead. We have identified the significant role that the Rule Foundation can play in working with and advising others in the philanthropic sector on their granting to Rainbow communities. Further, there is a small but increasing interest from individuals in operating new funds through the Foundation. Our intention is to invest in the staff, resources, networking, and knowledge retention necessary to maximise on the opportunities presented in the years to come.

Closing

2022 presented a tough but rewarding year for the Rule Foundation. We are particularly proud of surpassing the $1 million in distributions milestone, our ongoing partnerships in the philanthropic sector, and the work of those organisations our funding has supported. 2023 holds a number of opportunities, and we look forward to sharing details of our new strategy and other decisions to take advantage of these opportunities in coming months.

Ngā mihi nui,

Duncan Matthews and Toni Duder

On behalf of the Trustees of the Rule Foundation