Ocean Kinetics - The Engineering Experts

Community / Charitable trust reserves grow by over £70 million

Shetland Charitable Trust headquarters at Lerwick's North Road. Photo: Shetland News

SHETLAND Charitable Trust made a gain of £76.7 million on its investments between April and the end of June as financial markets recovered from the impact of the coronavirus pandemic.

The trust’s latest management accounts show that its reserves at the end of June totalled £389 million.

The figures were presented at a meeting of the trust on Thursday.

Chairman Dr Andrew Cooper said it has been a “positive three months and good to see the funds climbing in the right direction again”.

“But we are essentially just back to where we were pre-Covid-19,” he added.

“The markets are particularly prone to volatility in these challenging times and we can see the value of investments drop significantly in the space of a few days.

“The trust takes the long view on its investments, gauging their success over years rather than months.

“Our aim is to grow the funds for the future of all islanders while providing sufficient returns each year to spend in a sustainable way in the community.”

The gain on investments, meanwhile, in the 2019/20 financial year stood at a more modest £11.1 million, with coronavirus affecting returns compared to the previous year.

In contrast, the gain on investments in the 2018/19 financial year was £26.9 million.

A report presented to trustees said that until the last week of February there had been a “significant growth” in the value of the trust’s investments.

“The onset of the Covid-19 health crisis in February and March caused markets to drop dramatically, with falls of around 30 per cent in equity markets around the world,” it said.

“Despite this dramatic fall, the trust achieved a positive return on its external investments over the year.”

After a period of cost-cutting, Shetland Charitable Trust – which funds the isles’ main trusts, part of rural community care and a number of groups and charities – has begun to increase its expenditure.

The main grant scheme for the year is up from £7.3 million to £8.4 million, while over £500,000 was disbursed to local charities, groups and organisations earlier this year from a new fund designed to tackle social isolation and inequality.

On top of that the trust has agreed to give a one-off £500,000 grant to the Shetland MRI scanner appeal.

An annual report presented at Thursday’s meeting highlighted that the policy of the board is to invest the reserves to generate income to support charitable expenditure “and to maintain the real value of the reserves in the long term”.

The trust relies in the gains on its investment for its income.

The trust began life in the 1970s to receive and disburse money paid by the oil industry to the local community as compensation for Sullom Voe Terminal operating in Shetland.