Trustees producing and implementing a strategic review

For me, the best way of discussing how to turn a charity around by injecting new strategies and directions is to write about how this was achieved in the Royal Merchant Navy Education Foundation since 2007. This is our story and demonstrates the effectiveness of the charity's trustees despite considerable challenges.

The Royal Merchant Navy Education Foundation (RMNEF) offers support to the disadvantaged children, in full-time education or training, of current and former Merchant Navy seafarers, and of professional sea-going fishermen and RNLI crew members.

Abiding by the mantra “Education is the Foundation”, since 1827 the RMNEF has helped thousands of "Foundationers" achieve their educational and career-led goals. The RMNEF offers support including contributions towards school or university fees, living expenses while in full-time education, educational books, visits or equipment, school uniform costs and a great deal more.

Background before the strategic review

The foundation was started in 1827 as the Merchants’ Seamen’s Orphan Asylum in the London Docks area. Since then, the foundation changed its name a number of times. The original name was retained until 1902 when the Orphan Asylum became the Royal Merchant Seamen's Orphanage, before becoming the Royal Merchant Navy School in 1935. The charitable and educational activities were separated with the latter, in 1977, becoming Bearwood College and the former, in 1981, becoming unincorporated as the Royal Merchant Navy School Foundation.

Finally, in 2013 and after the sale of the school, the Royal Merchant Navy School Foundation became a CIO (Charitable Incorporated Organisation) called the Royal Merchant Navy Education Foundation.

Also since 1827, the asylum/orphanage/school moved from Bow Road (1827 – 1862) to a purpose-built orphanage in Snaresbrook (1862 – 1921) to the Bearwood Estate near Wokingham (1921 to date). The move to Snaresbrook was specifically intended to remove the orphans from the foul air of London into fresh, clean, country air but, as London overtook Snaresbrook, the then chairman of governors bought the Victorian, 500 acre, Bearwood Estate in 1919 and gave it to the foundation, again to enable the orphans to be educated in the country air.

The costs or overheads for the foundation of owning and managing this Grade II* listed estate arose from there being:

  • A letting agency managing residential and commercial tenants and maintaining buildings.
  • A maintenance company responsible for maintaining the estate.
  • A utilities company providing and maintaining the supplies of water, sewerage, gas and electricity to the tenants, 365 days per annum.
  • Legal responsibility under the Reservoirs Act 1976 for the maintenance and safety of a 43 acre lake and London Clay dam.
  • Addressing the task of having to move off illegal occupiers who settled on the estate.

Also and very important to note is that the foundation has been in the Monarch’s patronage since 1836 and, currently, our patron is Her Majesty The Queen and our president is HRH The Duke of Edinburgh.

These rather complicated affairs are mentioned simply to demonstrate that the charity had a considerable amount of historical and cost baggage that had to be dealt with by the strategic review which had to be undertaken.

Key issues for strategic reviews

There are two crucial issues governing the potential success of any strategic review:

  1. All trustees must agree the need for and engage in a review.
  2. Discussions regarding the strategic aims must very specifically exclude constraints such as finance, time or human. Constraints only enter the discussion when working out how the charity is going to implement the agreed strategy.

Specific issues according to the trustees

There were of course specific issues which had to be addressed in the review and key to identifying the foundation’s strategy were the trustees’ clear directions on these issues:

  1. To retain the charity’s beneficiary class which comprised and still comprises the needy children of Merchant Navy seafarers with preference being given to those with British nationality.
  2. To help more beneficiaries.
  3. To identify the educational needs of today’s beneficiaries.
  4. To remember the foundation’s original remit in 1827 which may be summed up as providing board and lodging, and sufficient education to enable the orphans (beneficiaries) to gain employment.
  5. To enable funding to meet today’s educational needs. This not only meant the disposal of some or all the Bearwood Estate but also meant a reduction in operating costs.

Nationally, the trustees concluded that two issues would affect their beneficiaries: first the economy and, second, youth unemployment. The foundation could do nothing about the former but could do something to reduce the latter which, conveniently, would allow the foundation to hark back to providing education for employment. And so the strategy evolved of assisting with the education of the foundation’s beneficiaries so as to give them the edge over their peers when seeking employment.

It was also essential that the charity’s patron, president and all other benefactors and interested parties such as the Charity Commission were kept informed of progress and decisions.

Implementation of the strategic review

Having agreed the strategy, implementation was next addressed and the key to this was to dispose of the Bearwood Estate.

Owning 500 acres in Berkshire and with very few cash resources made the Foundation “brick-rich and cash-poor”. Also, the trustees recognised that owning (a) a school that was becoming increasingly difficult to keep going and (b) an estate that was under-performing and had very high maintenance costs were considerable millstones around the foundation’s neck so they agreed to dispose of the Bearwood Estate.

So although the trustees knew what they wanted to do, they could not do it because, in 2007 when the review began, the foundation found itself embroiled in a legal battle which prevented the disposal of any part of the estate. This battle lasted for five years and was not resolved until 2012 when the sale of about 106 acres of land and buildings to Bearwood College was completed. This sale provided the foundation for the first time in its existence with substantial cash reserves and allowed the trustees to begin the process of increasing the number of their beneficiaries.

Three months after the resolution of this legal battle, the Bearwood Estate was placed on the open market for sale which resulted, in September 2015, in completion of the sale of 120 acres to Reading Football Club, and in December 2015 the trustees moved the foundation’s offices off the estate.

Results of implementing the review

Today, the foundation is a Charitable Incorporated Organisation with a modern constitution, a modern website and a simple but clear strapline: "Education is the Foundation".

Today, the foundation can now help its beneficiary class at almost any educational stage, from the start of "day care" until the beneficiary has obtained their professional, career-entry, qualification. The trustees do not expect to have to help any one person for all that time; rather they expect to help them on and off according to their need.

Retained acreage

Today, the foundation still retains the freehold of some 265 acres of the Bearwood Estate; 60 acres comprise woodland and rather more than 200 acres are leased on a long term basis to one of the country’s top 30 golf courses and provide a sound income.

In brief then, the trustees have managed to dispose of those parts of their land assets that were the most expensive to maintain while still retaining substantial acreage.

Capital and income

The disposal of these two parcels of land and buildings and the closure of Bearwood College in September 2014 have generated substantial funds, and the trustees agreed that the consequential investment income, but not the capital, would be used to meet the needs of the beneficiaries. The longer term plan is to operate the foundation using the rental income from the golf course and to use all the investment income to help the beneficiaries.

Having settled in its new offices in Hungerford, the foundation is now a tenant, for the first time since 1830, and it’s a joy not to have to be concerned about the possibility of someone falling into the lake, or having to mend a leaking roof or freeing up a blocked sewer.

The downside has been the need to make about 86% of the staff, excluding those employed by Bearwood College, redundant, and this aspect has needed to be very carefully handled. The trustees are pleased to learn though that each of these former employees has obtained new employment

Just one example of reduced costs will suffice: this is where the foundation’s insurance premiums have reduced by around 98%.

Beneficiaries of the strategic change

Most importantly of all, the trustees have multiplied the number of their beneficiaries by a factor of three and we are well on our way towards our target which requires a multiplication factor of ten!

I must end by saying that this foundation has been extremely fortunate in having a board of very capable and dedicated trustees without whom I do not like to think where the foundation would otherwise be.


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