Granting maintained despite challenging year

Media Release

Reporting its annual results last Tuesday, Otago Community Trust noted that it had felt confident in maintaining its budgeted granting activity despite the period to March 31, 2022 having been a challenging time for markets, and for the Trust’s investment portfolio.

The conflict in Eastern Europe, volatile exchange rates, rising inflation, and share markets weakening notably in the last quarter of the financial year resulted in a lower-than-expected level of growth in the value of the Trust’s investment portfolio.

The Trust’s investment return for the year was 0.3% - down from 21.8% in 2021.  Granting of $10.3m saw net assets reduced to $308.6m, down from $319.2m in 2021.

A significant proportion of the Trust’s global equities investments were also moved into a sustainable shares fund in December 2021, reducing exposure to carbon emissions and divestment from fossil fuel reserves within the Trust’s global equities investments.

This move has further improved the Trust’s overall Environmental, Social, and Governance (ESG) investment profile.

Trust senior investment consultant David Kandziora from Russell Investments said whilst there continued to be uncertainty in investment markets, the Trust was focused on a long-term approach.

“With the current asset allocation, we expect to see a negative return one year in every five, on average. The Trust has achieved an annual investment return of approximately 7.3% over the past 10 years, beating its benchmark” Kandziora said.

Trust chief executive Barbara Bridger said despite the challenging environment grants approved for the year totalled $10.3m, up from $8.6m in 2021.

“Over the past year we have continued to work with our communities to support significant capital projects, social service and welfare programmes, and community response activities.

The Trust was pleased to have approved $4.6m into several capital projects across the region including a $2.2m grant to the new Clutha Community Hub / Te Pou ō Mata- Au, Bridger said.

The financial results were formally presented at Otago Community Trust’s Annual Public Meeting last Tuesday. Around 50 people attended the meeting which was held in Alexandra.

Otago Community Trust chair Diccon Sim noted as a community owned charitable trust, we are reminded of the important role we must continue to play in supporting all our communities.

“Otago Community Trust operates a careful reserving policy to account for market volatility, and even should the difficult market conditions continue we remain hopeful that the Trust will be able to continue at around current granting levels into the future.  We remain confident in the appropriateness of our grants budget of $10m allocated for the year ending March 31, 2023,” Sim said.

Prior to the Annual Public Meeting, Otago Community Trust trustees held their regular September board meeting where over $500,000 in community grants were approved.