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The Nuffield Foundation ANNUAL REVIEW 2002/3

Management, Administration & Investment fees £592k

Social Research & Innovation £3,020kChild Protection & Family Law £1,061kSocial Science Small Grants £481kNew Career Development Fellowships £476kOlder people & their families £423kAccess to Justice £319kPhoenix £260k

Science £1,188kNewly Appointed Lecturers £466kUndergraduate Research Bursaries £362kSchool Science Bursaries £279kRheumatism £81k

Education £2,156kNuffield Curriculum Centre £795kEducation Grants £785kEducation for women £576k

Open Door £948k

Other Activities £1,750kNuffield Council on Bioethics £779kCommonwealth Programme £583kNuffield Languages Programme £237kMental Health £151k

2002 total £9.654m

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THE NUFFIELD FOUNDATION ANNUAL REVIEW 2002 1

TrusteesThe Baroness O’Neill of Bengarve (Chairman)Sir Tony AtkinsonDr Peter DoyleProfessor Lord May of OxfordProfessor Genevra RichardsonProfessor Sir Michael RutterMrs Anne Sofer

Senior StaffMr Anthony Tomei (Director)Ms Sharon Witherspoon (Deputy Director)Mr James Brooke Turner (Assistant Director – Finance)Dr Catrin Roberts (Assistant Director – Education)Mr Andrew Hunt (Director Nuffield Curriculum Centre)Ms Alwena Lamping (Co-ordinator Nuffield Language Programme)Dr Sandy Thomas (Director Nuffield Council on Bioethics)

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Sixty years of Nuffield 2

Review of 2002 3

Research informing policy and practice 6

Innovation 10

Individuals and institutions 14

Supporting young people 18

Financial and investment strategy 22

Financial review 2002 24

Major grant expenditure 26

Grants programmes 2003 inside backcover

William Morris,Viscount Nuffield1877-1963

The Foundation’s Trust deed was signedsixty years ago, on 9th June 1943. Thetiming is significant. The outcome of the warwas still uncertain but Lord Nuffield and hisfounding Trustees established theFoundation in a spirit of optimism, with theireyes firmly on the role it could play in post-war reconstruction.

Lord Nuffield gave his Foundation wideobjects. He did not give firm directionsabout the themes or areas of interest hewanted his Foundation to pursue andseems to have been content, on the whole,to leave those decisions to the body ofTrustees he appointed. It is not surprising,therefore, that the Foundation has followedmany different paths over the years, andthat its current activities are very differentfrom those of sixty years ago. Nevertheless,there are underlying principles which havestayed constant and which still guide whatwe do. In this, our 60th anniversary year, wehave set out to describe our current activitiesin the light of some of these guiding themes.

From the beginning the Foundation hassupported three kinds of activities. Firstly itsupports research. In the early days this wasmainly in science and medicine. Now weconcentrate on education and variousaspects of social welfare and social policy.What has remained constant is that theresearch is intended, in the words of theTrust Deed, to “advance social well-being“,meaning that the research evidence shouldadvance policy and practice over areasonable time scale. In the first article inthis review we describe how this works inpractice, drawing on examples of work inprogress or recently completed, withreference to examples from theFoundation’s earlier history.

The second area of activity is innovation. By this we mean developing new ideas andways of doing things, trying them out inpractice, usually in a controlled way, anddisseminating the outcomes. This too has along history: – the first Annual Report refersto the Trustees’ intention to engage in‘prudent pioneering’. The second articledescribes some of our present work in thisarea, again with reference to examples fromthe past.

Behind both these areas of work is the ideathat whether studying or seeking to bringabout improvements in the social world it isimportant to consider not just individuals orinstitutions, but the relations between them.In the third article in this Review we explorehow this idea underpins many of theprojects the Foundation is supporting.

The third area of activity is support for youngpeople. From its early days the Foundationhas run schemes that provide support atcritical points in the careers of young peoplefrom a wide variety of backgrounds andprofessions. At the moment theFoundation’s support is concentratedmainly on young scientists and socialscientists, and in our fourth article wedescribe these schemes.

The Foundation’s aim is always to belooking forward, anticipating new challengesand exploring new ground. At the sametime we are conscious of the need to build on the present, and to draw guidanceand inspiration from our history. We hopewe have demonstrated in this review how these differing imperatives can bereconciled, and how the results continue to contribute to the advancement of socialwell-being.

20021943

Lord Nuffield andhis Trustees.From left to right:Sir John Stopford,The Hon. GeoffreyGibbs, Dr (Dame)Janet Vaughan,Lord Nuffield, Sir WilliamGoodenough, Sir FrankEngledow, Sir HectorHetherington andSir Henry Tizard

The Trustees. Back row fromleft to right:Professor SirMichael Rutter, Sir Tony Atkinson,Mrs Anne Sofer,Professor Lord May. Seated: Dr Peter Doyle,The BaronessO’Neill and The Rt. Hon. LadyJustice Hale

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2 THE NUFFIELD FOUNDATION ANNUAL REVIEW 2002

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The Foundation’soffices inBedford square,London

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Publication of Policing forLondon; a largescale study ofLondoners’expectations of the police

For endowed foundations 2002 was ananxious year. Grant giving foundations likeNuffield tend to have few continuingliabilities. They invest for the long term andcan in principle ride out fluctuations of theinvestment market. But that principle hasbeen put under pressure by a bear marketthat has lasted three years and a year thatsaw market values fall by a quarter.

In 2001 the Foundation began afundamental review of its financial aims andinvestment strategy. That is now complete.A description of the process and theoutcomes appears on pp22-23. Animportant element of the review was athorough examination of the Foundation’sfinancial objectives and of the levels of riskassociated with different strategies. Thefundamental financial aim remains, as it hasbeen for many years, to provide a steadyand sustainable level of expenditure whilepreserving the real value of the endowment.That aim will be severely tested by thecurrent financial climate.

In-house projects

The Nuffield Council on Bioethics producedthree major reports; on Clinical Research inDeveloping Countries, on Pharmacogeneticsand on Genes and Behaviour. The Councilalso said farewell to its Chairman, Sir IanKennedy. Sir Ian was a founding member ofthe Council and had been its Chairman since1998. Under his leadership the Council grewsubstantially in size, and has developed astrong and growing international reputation asone of the leading voices in this complex andimportant field. The Foundation and thoseconcerned with bioethics are immensely in his debt.

His successor as Chairman of the Council is Professor Bob Hepple QC, Master of Clare College Cambridge. Professor Hepplechaired the Council’s Working Party onGenes and Behaviour, and recently led amajor project, funded by the Foundation, on the development of a single equalityframework.

The Curriculum Centre began work on amajor new project, 21st Century Science, todevelop a new science curriculum for GCSE.The principle of the new course is that itshould attend to the needs of all futurecitizens as well as to those who will go on towork in the sciences. It combines two of theFoundation’s enduring interests – thetraining of future scientists and theinteractions between science and society.

The Languages Programme has also had aneventful year. The Nuffield Language Inquirypublished its report in May 2000. One of itskey recommendations was that thegovernment should publish a nationalstrategy for languages. The strategydocument was published in December2002 to a mixed reception. The fact of itsexistence was widely welcomed, as were itsaspirations. However there was widespreadcriticism, shared by the Nuffieldprogramme, of the lack of firm detail and inparticular of the proposal to make languagesoptional in schools at 14: – a decision thatseemed to many to undermine the overallobjective. The Languages Programme willcontinue until the end of 2003.

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Grants

Each year the Foundation spends around athird of its money on grant schemes whosepurpose is to provide support for youngpeople at critical points of their careers (see pp 18-21) In the sciences there arethree schemes. 565 awards were madeunder the scheme for Science Bursaries forSchools and Colleges. These grants enablefirst year A level students to take part inscience-based projects in industry,universities or research institutes duringtheir summer holidays. Holders of theseawards feature regularly in national andinternational competitions; this yearNuffield Bursary students took 10 of the 23 prizes at the British Association’s CRESTScience Fair.

There were 239 awards made under theUndergraduate Research Bursary scheme(which gives undergraduates experience ofresearch) and 89 awards under the schemefor Newly Appointed Science Lecturers(which gives starter grants to young scienceand mathematics lecturers).

In the social sciences there are two awardschemes. 83 awards were made throughthe Social Science Small Grants scheme,which funds small scale projects in thesocial sciences. These projects are suited forresearchers at early stages of their careers,but also for preliminary or pilot work and forsmall self-contained projects in our areas ofinterest. 2002 saw the third round of ourSocial Science New Career DevelopmentFellowship scheme, aimed specifically bothat increasing capacity in the social sciencesand at fostering inter-disciplinary research;the Committee made four awards.

Finally 202 awards were made through theElizabeth Nuffield Educational Fund (ENEF),which gives grants to women who arestudying to improve their employmentprospects. The Fund has been playing anincreasingly active role in debates about therole of child care in women’s educationaland career development. 2002 saw theintroduction of a new Government childcarestrategy, providing childcare support towomen in higher education, and thepublication of a significant Inter-Departmental Childcare Review. The Fundplayed its part in both and continues topromote informed discussion of the issues.

There were significant changes to the shapeof the Foundation’s project grantprogramme. All our programmes arereviewed on a five year basis and in 2002 itwas the turn of the Phoenix Fund, an annualgrant competition that provided grants tosupport practical projects run for olderpeople. Since it was established in 1993 theFund had provided over £2m, in support ofover 100 projects. In the view of outsideassessors the quality of the projects wasimpressive and our funds had beenproductively spent. But the external fundingclimate has changed and more funding isnow available for this sort of work. Trusteestherefore decided that it would be sensibleif the Phoenix Fund were no longer to berun as a freestanding scheme and thatinstead we should actively seek ways ofdeveloping our programme on OlderPeople and their Families to encouragemore practical projects.

A second change was the decision to closeMental Health as a freestanding grant area.This does not denote a lack of interest in the

area, but rather a wish to concentrate anddevelop the Foundation’s support formental health in specific areas, particularlywithin our other programmes.

The largest single area of grant makingduring the year was the Child Protection andFamily Law programme, under which 14grants with a total value of over £950,000were made. Spending was in fact nearly onethird over the amount originally budgeted,reflecting not only the number of strongapplications but also the fact that a numberof relatively large grants were made. 2002also saw the completion of the five yearreview of our activities in this area, ending inTrustees’ enthusiastic endorsement that theprogramme should continue for anotherfive. A report written as part of the review,Family Matters: work in child protection andfamily law at the Nuffield Foundation, waslaunched in May 2002 to help a wideraudience appreciate the breadth of ourinterests in this area.

The Foundation’s new Commonwealthprogramme was run for the second time.The programme makes grants of up to£250,000 over five years to supportprojects in Southern and Eastern Africa thatinvolve collaboration between the UK andthose countries. A key aim of the projects isthe development of the expertise andexperience of practitioners and policymakers. The response was less good thanwhen the programme was run for the firsttime, in 2000. Nevertheless the Trusteeshave agreed to make three grants.

Within Education two new themes wereintroduced: Curriculum Innovation andEducational Provision and Children’s Needs.

APRIL

Launch of revisedCurriculum Centrewebsite. Duringthe year 80,000copies of PrimaryDesign andTechnologyresources weredownloaded

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Publication ofFamily Matters, a report on thework of the ChildProtection andFamily Law andJustice committee


These replaced the rather broaderdescription that had been in placed for theprevious few years. Like all changes to thefocus of grant-giving, we expect a time-lagbefore their full effect is felt and will keepprogress under review.

Other activities

The Foundation occupies an elegant listedbuilding in central London. It is an idealsetting for meetings and we host a largenumber of seminars and conferences,mostly arising from the projects we fund.Over the summer the meeting rooms wererefurbished and re-equipped and the newarrangements seem to have been wellappreciated. Among the seminars was thecompletion of a series on issues in AgeDiscrimination. They are described on p14.

A new series of monthly seminars oneducational themes was started inSeptember. They bring togetherresearchers, policy makers and practitionersand have been lively events. Our aim is tocontinue the seminars throughout thecoming year. An earlier series of fiveseminars on the theme of 14-19 education,involving over fifty participants, yieldedpapers published as a Nuffield pamphletand were instrumental in the Trustees’decision during the year to commission a Review of 14-19 Education (see p8).

In addition to the launch of Family Matters,the Child Protection and Family JusticeCommittee has convened two groups ofseminars. The first was on co-habitationoutside marriage. A second set of meetingshas been convened by Professor June

Thoburn of the University of East Anglia,who heads a team reviewing the researchevidence about ethnic minority children andfamilies in the child protection system.

The Foundation’s redesigned website waslaunched early in 2002. The site is large andheavily used. It contains over 10,000 pages,divided between the Curriculum Centre, the Bioethics Council, the LanguagesProgramme and the Foundation proper. Thefigures for the use of the site are impressive.Altogether there were over 270,000 visitorsduring the year. There were over 35,000downloads of the Bioethics Council’s reporton Genes and Behaviour and over 80,000downloads of Primary Technology activities.We are at the early stages of finding out howto use websites as a communication tool,but figures like these leave us in no doubtthat they have an important part to play.

Trustees

During the yearDame Brenda Haleretired as a Trustee,after fifteen years inpost. An Appeal courtjudge, Dame BrendaHale was a drivingforce behind our

work in child protection and family law, andshe re-invigorated our socio-legal work,especially in civil justice. She was alsocommitted to work that benefited olderpeople. She had a shrewd appreciation of work that took advantage of theFoundation’s strengths; its ability toinfluence policy and practice from the

outside and to take the long view. Butperhaps her most outstanding contributionwas her ability to influence our work notonly through her precise understanding oflaw, but also through her commitment tousing social research evidence about socialand legal institutions and their effects onordinary people. We shall miss her.

Her successor isGenevra Richardson,who is Professor ofPublic Law at QueenMary, University ofLondon. Herteaching andresearch interestscentre mainly on

administrative law, prison law and health lawand she has published widely in these areas.She was a member of the Mental Health ActCommission for six years and in 1998chaired an expert committee established toadvise the government on the reform ofmental health law. She is currently amember of the Council on Tribunals, theAnimal Procedures Committee and theMedical Research Council.

Finally congratulations are due to otherTrustees. This year, Lord May was appointedto the Order of Merit and Sir Tony Atkinsonwas appointed Chevalier of the LegionD’Honneur. Our Chairman, BaronessO’Neill, gave the 2002 Reith lectures, onthe theme of Trust. They were widelyacclaimed, both for their timeliness and forthe elegant precision of the argument.

Anthony Tomei, Director May 2003

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Trials begin in 50schools of newSalters/NuffieldAdvancedBiology course

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During the yearover 1,000 youngscientists andsocial scientistsare supported byNuffield schemes


The Nuffield Foundation has always been a substantial research funder. In the earlydays most of its support was for scientificand medical research. Today most is forsocial and educational research. What hasbeen consistent over the years has been the attempt to fund research which is goingto make a difference: research which is not merely interesting in its own right butwhich also has the potential to influencepolicy and practice. Broader than a simpleinsistence on applied research, this entailssupport for research which meets the test of quality, which carries with it a relevance to issues of the day – whether they aregeneral or specific – and which is also self-conscious about its audiences and how to reach them.

Different paths to influence

There is a range of different ways in whichwe try to make sure that the research wesupport is going to have the impact that weseek. In the first place, we insist thatresearch proposals justify their relevance to policy and/or practice, that they are clearabout their intended outputs and that theyhave well specified plans for dissemination.One such project which has had asignificant influence on recent policydebates about the education of 14-19 yearolds has been Broadening the AdvancedLevel Curriculum, a research study of thefirst cohort of young people taking therevised curriculum as they moved throughAS levels, A levels and on to highereducation. As the only independentlyfunded researchers looking at theimplications of the changes, Dr. AnnHodgson and Dr. Ken Spours of the LondonInstitute of Education were guaranteed areceptive policy audience for their findings,with some of their recommendations about

how broadening the curriculum might be more effectively achieved through a baccalaureate type model finding a voice in the recent education white paper 14-19: opportunity and excellence.

Projects can have considerable impact onpractice as well as policy. In 1999, ProfessorTony Holland and his colleagues at theUniversity of Cambridge were given a grantto do research on capacity in relation tomental health. The concept of capacity(broadly speaking, the ability of people tomake and communicate decisions affectingtheir welfare) has been central to recentdebates and policy developments in thefield of mental health law. Usingmethodologies developed in an earlierNuffield funded study, they have beenassessing the capacity of patients withvarious kinds of mental disorders to makedecisions affecting admission to hospitaland subsequent treatment. Studies like thisare important both in assessing thepracticalities of capacity-based approachesand in providing the underpinning for thetraining of clinicians and others in the use of such approaches.

Sometimes, the Foundation is able to fundclusters of projects on related issues,lending an influence to the findings which is greater than the sum of the individualprojects. In a few cases, our ability to stickwith an area over time has meant a directrelationship between projects within acluster, as questions posed by one projecthave led to further work. More commonly, a set of themes is explored in different waysin different projects. An example is thecluster of projects on adoption and fosteringthat has developed over the years throughthe Foundation’s child protection and familyjustice work (see box p8).

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Support for Sir Cyril Clarke.Drawing on hisresearch inbutterfly geneticshe helped lay thegroundwork forthe applicationof genetics tomedicine

First of severalgrants to theJodrell Banktelescope. Completed in the mid 50s, thetelescope is usedto this day

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HildeHimmelweit’sTelevision andthe Child. The first majorstudy of thesocial effects oftelevision


1963

Citizenship and Multi-ethnic Britain

In 1963, Nuffield made a substantial grantto the Institute of Race Relations toundertake a large scale survey, under thedirection of E.J.B. Rose, to explore ‘racerelations’ in the newly diversified Britain.Published in 1969 as Colour andCitizenship, the work was soonsupplemented by other grants.

The projects contributed significantly to the thinking which led to the RaceRelations Act in 1976.

The Foundation continues to fund work in this area. Recent grants include supportfor the Runnymede Trust’s Commission on the future of Multi-Ethnic Britain, whichset out to re-visit and update the issues in Colour and Citizenship.


Bringing People Together

Dissemination meetings to stimulate thediscussion of findings as research projectsconclude are a tried and tested vehicle.Sometimes, however, bringing peopletogether is most effectively done at theoutset of research, as a way of securingconsensus that the research agenda to be pursued is credible and relevant across a broad range of interests, or as a way ofstimulating and encouraging research effort in particular areas. Thus we preparedthe ground for a major new initiative, theNuffield Review of 14-19 Education, with a series of research-based seminars. TheReview, to be launched in the autumn of2003, will be a long-term research-ledcommitment for the Foundation, analysingand monitoring trends in 14-19 educationover time and place and promoting the useof evidence to inform policy proposals forlong-term reform.

Sometimes interests will be broughttogether in an advisory committee, opening up more enduring channels ofcommunication between the research and its potential users. The Paths to Justicestudy carried out by Professor Hazel Gennof University College London is one of thelargest funded by the Foundation in the lastten years and its advisory committee waswide ranging. The committee played animportant role both in shaping the researchand in developing ways in whichinformation on how people handled civiljustice disputes could be used in policy and practice debates. The Foundation hasconvened a similarly high-poweredcommittee, chaired by Elizabeth Filkin,former Parliamentary Commissioner forStandards, for a study of administrativejustice being carried out by ProfessorMichael Adler of Edinburgh University,exploring how citizens handle cases wherethey feel they may have an administrativegrievance against public bodies.

Adoption, Placement and Post-adoption Support

In 1997, a grant was made to AlanRushton and his colleagues at theMaudsley Family Studies Centre for afollow-up study of a sample of childrenplaced from care into permanentsubstitute families in middle childhood.This showed that post-adoption supportwas often needed for families of late-adopted children, especially as many ofthem have a range of difficultiesconnected with their early lives. In 2001,as Parliament debated the Adoptionand Children Bill, a small grant followedto map the type and range of existingprogrammes of help. In 2002 both theDepartment of Health and theFoundation supported the team toassess the value of a promisingintervention based on cognitivebehavioural family therapy.

Another study of outcomes in adoptionand fostering is Dr Elizabeth Monck‘sresearch at the Thomas Coram Instituteinto ‘concurrent planning’ in adoptionfor looked-after children. Concurrentplanning is a way of working jointly withbirth families and prospective adoptersin cases where children have beenremoved from their birth familiesbecause of child protection concerns.The research showed that while thisway of working could have positiveeffects, it was not suitable for all cases,and it could itself introduce delay insome circumstances. Issues to do withthe circumstances in which contactbetween adopted children and theirbirth families are good for the child arefurther explored by Dr. Elsbeth Neil andProfessor June Thoburn of the Universityof East Anglia in a longitudinal study ofcontact with birth relatives followingadoption of children aged four andunder at the time of their adoption.

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The SPACEproject was astudy of the way youngchildren come to understandscientificconcepts. It leddirectly to thedevelopment of a new course,Nuffield PrimaryScience

Paths to Justicewas the largestever study ofwhat people do when they try to access their rights under civil law


Assessing Impact

There was a time when doing good bystealth was the accepted modus operandiof foundations. But that time is past andincreasingly foundations have to account for themselves by showing how they havemade a difference through the work theysupport. Like other modern organisations,Nuffield is concerned with outcomes andimpact and likewise struggles withquestions about research impact: how toassess the relationship between findingsand change and, crucially, when to assessthe relationship. Occasionally a project willhave an immediate effect. An example is avery small grant given in 2001 to MegRussell at the Constitution Unit, UniversityCollege London, to examine the law relatedto whether political parties could take‘positive action’ in order to select womencandidates for election. The resulting paper,addressing the contradiction betweenemployment law and human rights law, waswidely drawn upon in the debates leadingto the Sex Discrimination (ElectionCandidates) Act passed in 2002.

Research which makes its impact over anextended period can be equally effective. In 1989, the Foundation made the first of a series of grants to a group of educationalresearchers to address the reform ofassessment. Successive small grants to theAssessment Reform Group have allowedthe Group’s work over the years topermeate policy debates at home andabroad. In a series of well targetedpamphlets the case has been made for thelearning gains which result from extendingthe definition of assessment to include a formative dimension. This strand ofresearch has also had a profound effect on professional practice.

Reforming Parliament

Occasionally projects not only have animmediate impact but also demonstrate aremarkably close relationship betweenconclusions and subsequent actions. In1999, a grant was given to the HansardSociety to support a Commission ofInquiry on the scrutiny role of Parliament.The Commission’s report, published inJune 2001, made a strong and coherentargument that Parliament needed tochange, and put forward a number ofrecommendations. The Commission’swork had significant media coverage andstimulated debate both during and afterthe publication of its report. Many of

those involved played a part in briefingand advising parliamentarians on how thereform proposals could be taken forward.Shortly after the report was published thereformers’ agenda was given a significantboost by the appointment of Rt. Hon.Robin Cook M.P, a long time advocate ofreform, as Leader of the House.

Many of the changes proposed by theCommission have now beenimplemented and Mr Cook has publiclyacknowledged the influence of thereport. The Hansard study is a rareexample of a direct path fromrecommendations to action.

2002

Grants of £2mmade to supportresearch that willinform policy andpractice in theFoundation’sareas of specialinterest


Support for innovation has been acornerstone of the Foundation’s work sinceits earliest days. The early reports talk ofsupporting ‘prudent pioneering‘ and the‘new, hopeful but unproven venture.’ Someinnovative projects grow from research andthe Foundation can provide funds to enablethose new ideas to be put into practice. But‘new, hopeful but unproven’ ventures areequally likely to come directly from thevision and enthusiasm of thoughtfulpractitioners. In the following pages wedescribe some current examples, withpassing reference to some cases from the past.

Trying out new things implies risk and theFoundation’s first Annual Report remarkedon the duty ‘to accept risks which cannot beproper to those accountable for the tax-payers’ money.’ What kinds of risks are ‘notproper’? It may be that the initial risks aresimply too high and that a case needs to bemade before the state can assume longterm responsibility. That, in a nutshell, is theclassic ‘pump priming’ argument. TheFoundation has over the years supportedmany projects of this kind and it continuesto do so. These days the state seems moreand more inclined to reverse the traditionalroles: to see itself as the source of start upfunds and to look to others to take over therole of long term funder. That is not a rolethat this or indeed any private foundation islikely to accept willingly.

There are those who argue that this impliedreversal of roles means that there is nolonger a place for foundations as ‘pumpprimers’. We do not see it that way and inany case there are reasons other than riskwhy new ventures might be better fundedfrom private sources. They might, forexample, require an objectivity or distancefrom government that would becompromised by state funding. The NuffieldCouncil on Bioethics (see box p13) is sucha case. They might also be set up topromote actions that are politically difficult

for the state itself to encourage. A text bookexample of this is the Foundation’s supportfor integrated education in Northern Ireland.

Integrated Education in Northern Ireland

For most of the 20th century children inNorthern Ireland were educated in schoolsthat were, in effect, Protestant or Catholic. Inthe 1980s groups of parents began toestablish integrated schools. While thegovernment was not opposed to theschools, it was not able to fund them denovo. The parents were obliged to find fundsfrom private sources to run their schoolsuntil they had established viability. It washere that the Foundation, with other UKfoundations, played a major role.

There are now some fifty integrated schoolsand the Foundation is no longer involved infunding the schools themselves. We retaingood contacts with the movement, however,and recently funded a study by ProfessorAlan Smith of the University of Ulster andProfessor Tony Gallagher of Queen’sUniversity to investigate outcomes for theschools and to the pupils. What has beenhappening in Northern Ireland also hasparticular relevance to the debate about faithschools in England. During the year wetherefore organised a seminar in which theresearchers’ findings were discussed bypolicy makers and others.

Curriculum development

One of the advantages of a privatefoundation is its capacity to stay with anissue for an extended period, building onthe growing expertise and networks that areso important to the development anddissemination of innovative practice. In theFoundation’s case the longest standing andbest known example is its work incurriculum development, which began in

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Establishment of in-house Legal ActionResearch Unit. Start ofinvolvement in socio-legalwork

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First of several grants to the BristolExploratory, the first hands-on science centrein the UK

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Beginning of NuffieldCurriculumprojects inscience,mathematics and languages


2002

21st Century Science

Most of the young people who do science in schoolwon’t end up as scientists – but all too often the kindof science to which they are exposed is based on thatassumption. The major Twenty First Century Scienceproject, being undertaken by the Nuffield CurriculumCentre and the University of York, with co-fundingfrom the Wellcome Trust and the Salters Company,involves a radical redesign of the core science

curriculum for 14-16 year olds. This new course takes account of the need of most young people foran understanding of science that will serve them wellin life rather than in the laboratory. The course willalso address the needs of budding scientists bymeans of additional specialist modules. Materials and resources are now being developed for teachersand students to trials during the substantial pilotphase starting in September 2003.


the 1960s. In an extraordinary feat ofcreativity and organisation, Nuffield projectsreshaped the curriculum in science,mathematics and languages, at all levelsfrom primary through to A level. While todaythe scale is smaller, the tradition continuesthrough the work of the Nuffield CurriculumCentre, an in-house unit that leads andcoordinates school-based curriculumprojects. Its current projects at secondarylevel include Science for PublicUnderstanding (an AS level course),Advanced Chemistry, a new advancedBiology course (run jointly with the Salter’sInstitute), post-16 mathematics, andEconomics and Business courses at bothGCSE and A level. At primary level there areprojects in Design and Technology, Scienceand Mathematics.

Science and the Citizen

The Foundation has always had strongconnections with the world of science, initiallyas a funder of research, subsequently inscience education and more recently throughinvolvement in public engagement in science.In the past few years these strands havecome together and the Foundation is nowactively involved in the contemporarydevelopment of what is coming to be called‘scientific citizenship’. This includes theanalysis of the kind of science that the citizenneeds to know and understand, and also ofthe ethical dilemmas and problems that arisefrom modern science. The former is theobject of the Curriculum Centre’s newest, and largest project, the development of a newscience curriculum for GCSE; (see box p11).The latter is the focus of work of the NuffieldCouncil on Bioethics (see box opposite).

Law, advice and the citizen

The Foundation’s interest in the law and its effects on the citizen is almost as long

standing as our curriculum work. In 1971the Foundation established its own in-house operation, the Legal Advice ResearchUnit, and in the next few years was involvedin supporting many innovative practicalprojects. These included support for the firstlaw centres in North Kensington andNewham; the first Small Claims Courts, inWestminster and Manchester; and the firstexperiments in family mediation. TheFoundation was also involved in the veryearly days of the Legal Action Group (LAG)supporting its work on improving access tojustice for all sections of the community.

For over thirty years the Foundation’s interestin socio-legal matters has manifested itselfboth through research and through a streamof projects that aim to develop new ways ofproviding advice to citizens about their rightsand about access to the law and services.Some, like the grant to Maurice Frankel ofFreedom of Information, are intended toprovide help to those dealing with theimplications of new legislation.

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Grant to FoI to supportimplementationof Freedom ofInformation Act2002. A further£2m of grants aremade to supportinnovation in theFoundation’sareas of specialinterest

Freedom of Information

The Freedom of Information Act 2000 wasintended to lead to a change of culture ofpublic authorities, towards much greateropenness. However experience suggeststhat this change may be difficult to achieve.The Act is complex, the appeals process isdemanding and no additional funds havebeen made available for implementation.Our funds will support the publication ofpractical materials to assist the public, thedevelopment of training materials andcourses for professionals, and the provisionof direct assistance to users in cases ofparticular public interest. The project beganin autumn 2002.

Tax advice for elderly people

Other projects are aimed at helpingparticularly needy groups deal with publicagencies. The Low Income Tax Reform Grouphas for some years been campaigning tohighlight the problems faced by poorer olderpeople in coping with a tax system that manyfind intimidating, bureaucratic andunresponsive to their needs.

With the help of grants from the Foundation it has established two pilot projects, inWolverhampton and in Dorset, under whichvolunteer tax professionals give their time and expertise to help older people file their tax returns, and advise them on simple taxproblems. The pilots have been successfuland the LITRG is now lobbying for supportfrom government to support theestablishment of similar schemes in other areas.

Elder abuse

Action on Elder Abuse is a relatively newcharity that seeks to promote practicalprojects to prevent elder abuse. Respondingto a need for training in an area where muchabuse might be either inadvertent oruncontrolled responses to frustration, theyhave developed a training pack, using bothvideo and written materials, for domiciliarycare workers, community nurses andcommunity nurse aids. A follow-up granthas provided two years support for adevelopment worker at a critical time when new national guidelines on abuse in residential care are being implemented.

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Nuffield Council on Bioethics

The Nuffield Council on Bioethicsaims to improve the quality of publicpolicy debates on issues at theinterface of the biosciences andpublic interest. The Council, co-funded by the Medical ResearchCouncil and the Wellcome Trust, is the only body of its kind in the UK. It publishes reports on specific topicsbased on extensive consultation and has become highly respected for the quality of its expert andimpartial advice.

Last year, three reports werepublished: Genetics and humanbehaviour: the ethical context; The ethics of patenting DNA; andThe ethics of research related tohealthcare in developing countries. It is now consulting on the ethicalissues raised by the development of personalized medicines, orpharmacogenetics, and is beginning a new study of the ethics of researchinvolving non-human animals.


In its work in the social sciences theFoundation has from its beginnings beeninterested in the relations betweenindividuals and institutions. This has cometo encompass a belief that projects need to consider not only the effect of institutionson individuals but also the complexinteractions between individuals andinstitutions. Sometimes projects areundertaken to ensure that the interests ofservice providers are not allowed to ‘trump’the interests of others. In other cases,institutions have to balance the interests of one party – say, birth families – withanother – children.

Age equality in an ageing society

Nearly sixty years ago, as one of its first major projects, the Foundation set up a commission headed by BenjaminSeebohm Rowntree, the social reformingson of Joseph Rowntree, to examine ‘the various problems – individual, social and medical – associated with ageing and old age’.

Nowadays we are still some way fromensuring that institutions – notably thelabour market but also the health caresystem, pensions and so on – meet theneeds both of older people and of anageing society in general. So in 2002 theFoundation commissioned Sarah Spencerof the Institute for Public Policy Research(IPPR) to convene a series of seminars,based on specially-prepared workingpapers, to examine how ‘age equality’ might be further advanced. The timing wasoccasioned partly by a European directivethat will require governments to introducelegislation banning age discrimination inemployment by 2006. But the aims were

broader. The Foundation hoped toencourage a wide range of participants –from government, the voluntary sector,academia, and the law – to consider theissues involved in legislating about agediscrimination and equality, and to considerthese not just in employment but in health,education, pensions and the like. A specialseminar was held to look at comparisonswith the US and other European countries.Working papers were commissioned fromexperts and these were made widelyavailable through the IPPR’s web-site.

This work has undoubtedly been influentialbeyond the audience who attended. It hashelped to clarify some of the conceptualissues – like how to balance the rights ofolder people with needs or problems thatmay arise as a result of getting older. It hasexposed issues on which there is consensusand those on which there is less agreement,either because there is little evidence orbecause the interpretation of the existingevidence varies.

The seminars have also influenced thinkingabout how to respond to governmentconsultations. This applies not only to agediscrimination legislation but also to thequestion of whether there might beadvantages in having a single equalitycommission, and how these issues mightrelate to human rights concerns. Indeed, theFoundation has made a further small grantavailable to a group of charities and otherNGOs convened by Patrick Grattan of theThird Age Employment Network to discusshow the various new issues in the Europeananti-discrimination directive – on sexualorientation, religion and age – can bebrought together with the existing bodiesenforcing race, sex and disability legislation.

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Publication of SeebohmRowntree’s Old People (see box p16)

The first grant on Familymediation andlaw: for a study of the BristolCourts FamilyConciliationService. Thebeginning of a major theme(see p17).


2001

Age Equality

DIY stores B&Q have successfullyadopted a policy of recruiting older workers.


Citizens and the state

Actively seeking the advice of those withdifferent views and interests is particularlyimportant when the aim is not simply tofoster better understanding but to enquireinto how social institutions affecting citizens’everyday lives might be changed as a resultof that understanding. Other recent projectsinvolving socio-legal issues funded underour Access to Justice programme havetaken this approach. These include:

■ two grants given to Liberty (a civil libertiesNGO). The first, an examination of howindependent investigation of complaintsagainst the police might work, influenced themodel of the new Police ComplaintsAuthority. The second was for anexamination of how privacy versus freedomof information interests might be reconciled;

■ a grant given to INQUEST, a charity whichworks with the families of those who havedied in public custody, to compileinformation that might inform the review ofcoroner’s procedures currently underway;

■ a grant given to Professor Adam Crawfordof the University of Leeds to consider howvarious forms of ‘private policing’ – securityguards and the like – interact with policeand the new Community Support Officers,and how this affects both accountability andthe experiences of citizens being policed;

■ a grant given to Professor Mike Hough ofSouth Bank University, who is reviewing theevidence from the USA and the UK on howthe policing of ‘incivilities’ – low level socialdisorder – affects crime rates and localcitizens.

The Foundation has also funded workinvolving the larger political institutions thataffect relations between the citizen and thestate. When Robert Hazell stepped down asDirector of the Foundation in 1995, he didso to head the Constitution Unit atUniversity College London. This hasbecome Britain’s foremost independentresearch body on constitutional change. TheFoundation supported the core work in itsearly days – after establishing that the Unitwould be hew to no party line, and wouldbe rigorous and impartial in its work. Sincethen, it has made a number of grants to theUnit, most recently on the workings andrules of coalition governments.

1994

Start of ChildProtection andFamily Law and Justiceprogramme ofgrant-making.Between 1994and 2002, morethan £5 millionpounds are spenton research anddevelopment inthe broad area ofchild protection

1995

Support forConstitution Unitat UniversityCollege, London.This has becomeBritain’s foremostindependentresearch body on constitutionalchange

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People: report of a survey committee on the problems of ageing and the careof old people, was published in 1947. It documented – often in movingphotographic form – the conditions inwhich many older people lived andworked, and was particularly concernedwith the ‘public assistance institutions’ in which the poorest non-working poorwere consigned. These workhouses – for that is what they were – were still all too common and were oftenpositively Dickensian. Rowntree wantedsmaller, less institutional homes with agreater stress on the quality of care. Healso made practical recommendationsabout how more ‘independent living’might be encouraged. He made furtherrecommendations about how otherareas, especially health care, could take more account of the needs of older people, and suggested the needfor continuing research and policy co-ordination if matters were to improve.


Specific language impairment and schools

The Foundation’s new education grantsprogramme ‘Educational Provision andChildren’s Needs, is designed to explorehow schools and other educationalinstitutions can better respond to thedistinctive needs of different groups ofchildren. A good illustration is the series ofresearch projects undertaken by ProfessorGina Conti-Ramsden, of the University ofManchester, into the educational transitionsof children with specific languageimpairment (SLI). SLI is a generic termdescribing communication disorders thataffect children’s learning. It is ‘specific’ tolanguage because it occurs where there isno obvious physical cause (like deafness)or cognitive deficit. Professor Conti-Ramsden has studied a sample of 242children from special language units as theygrow older. Successive waves of the studyhave focused on critical points to examinehow institutional provision is, or is not,meeting the needs of these children, forexample during the transition from primaryto secondary school. These projects areproducing findings that are helping parents,teachers and other professionals to improveeducational provision for these children, forexample by designing testing methods thattake account of their particular needs.

Family mediation and the law

From time to time the Foundation funds acluster of projects that move back and forthbetween research and practice. An exampleof this approach can be seen in our supportfor family mediation. Our first grant on thissubject, in 1978, was to Professor GwynnDavis, of Bristol University, for a study of the

Bristol Courts Family Conciliation Service.When that research showed that familymediation (as conciliation is now moreaccurately known) could help reduce theadversarial nature of divorce, we made aseries of grants in the 1980s and 1990s tothe organisation that became NationalFamily Mediation to support thedevelopment of its work.

Today, family mediation through a specialorganisation is not the path taken by themajority of those divorcing. Neverthless ithas affected mainstream provision. Much ofthe work done in those years has helped tocontribute to changes in the ways mostfamily lawyers now work to reduce ratherthan inflame family disputes.

Marriage and Divorce

In the last four years, the Foundation hasfunded two studies of relationships wherethe partners are cohabiting and not married.The first, by Mavis Maclean of the Universityof Oxford and Jane Lewis and Sue Arthur ofthe National Centre for Social Research,looked at how finances are split whenpartners who have been cohabiting arebreaking up. They found that though mostpartners started off with the idea ofachieving a 50/50 split, this was hard toachieve, and often unfair, when there werechildren.

Then in 2002, Anne Barlow of the Universityof Aberystwyth, Simon Duncan of theUniversity of Bradford, and Alison Park of theNational Centre for Social Researchpublished their findings from the BritishSocial Attitudes Survey. These showed that amajority of people thought, erroneously, thatsomething called ‘common law marriage’

existed and gave unmarried people rightsthat were similar to those of marriage. It alsoshowed that while existing co-habitants hadmixed views about what might be suitable,generally people felt sympathy forconsidering how to improve matters whenchildren were involved. Government will beintroducing new rights for some unmarriedfathers to grant them legal parentalresponsibility. But other issues – like whathappens when cohabitations break down, or when there is domestic violence, or whenone co-habiting partner dies unexpectedly –have so far not been addressed. This is anarea where further deliberation and researchis likely to be useful.

2002

Publication ofPolicing forLondon, a largestudy on policingcommunities inLondon, withspecial attentionpaid to minorityethnic groups.This leads toother projects on policing andsocial assent


People are at the heart of what theFoundation does and what it supports. Weset out to fund creative people with goodideas and an informed understanding ofhow best to test out those ideas. Whetherthey work in social policy, education orscience, we aim to provide people with theopportunity to pursue interesting andrelevant projects. Along with that comes adegree of responsibility to ensure that thereis a stream of people competent and able todo so. In this spirit, the Foundation tries tomake a serious contribution to allaying awidespread national concern about thesupply of scientists and social scientists withthe necessary skills and aptitudes. Our aimis to contribute to the development ofresearch and professional capacity bysupporting young people and newresearchers at critical points in their careers.

Supporting Capacity

The Foundation’s sense of responsibilitytowards capacity-building is not new. Therehave been legions of Nuffield scholars,bursars and fellows over the years. Sixtyyears ago, the Trustees’ commitment wasstated unambiguously in the Foundation’sfirst Annual Report:

‘... the trustees propose to develop, as aseparate major policy, a compositeprogramme of awards of various kinds –visiting lectureships, travellingfellowships, and the like – and to devoteto this programme a substantial portionof the Foundation’s income’

While the principle has endured remarkablyover the years the detail has evolvedcontinuously in relation to the fundingcontexts and needs of particular periods.Long gone are the particular schemesreported in that first Annual Report: theNuffield Medical Fellowships, the Nuffield

Dental Fellowships and Scholarships, theInterchange Scheme for Training of SocialWorkers, the Colonial Service Scholarships,the Sudan Government ServiceScholarships, the Dominion MedicalTravelling Fellowships, the MalteseDemonstratorships and the AlderneyTraining Bursaries. The schemes of todaylook very different, both in the groups thatthey target and in the kinds of opportunitiesthat are provided.

These days, we review our capacity-buildingschemes (like all the Foundation’sprogrammes) on a five year basis. We looksystematically at the relevance of ourapproaches in a rapidly changing contextand this discipline gives rise to significantchanges of direction. For example, thepractice under our former CommonwealthProgramme of bringing Commonwealthscholars and professionals to Britain hasgiven way to support for large projectsbased on collaboration between UK andCommonwealth organisations. The aim ofthe present Commonwealth Programme isto contribute to building capacity by carryingout long-term projects in situ, drawing onlocal expertise and resources.

The Foundation’s changed financialcircumstances have also had an effect. Welook increasingly for schemes with highleverage. We try to identify critical points inthe careers of young people, points at whichfar-reaching decisions about the future aremade, we then try to develop imaginativeinterventions to have an effect on thosedecisions. Our resources to do this do notcompare, of course, with those of theResearch Councils. Nevertheless, we areable to make our resources go further bycollaboration and co-funding and by ourability to target key groups – in schools, forinstance – which are outside the normalpurview.

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1945

First Fellowshipschemes started. These includeschemes formedicine,dentistry andsocial work, as well as avariety oftravellingfellowships for theCommonwealth

1966

Social ScienceSmall GrantsSchemeestablished

1989

UndergraduateResearch BursaryScheme started


First pilot of Science Bursaries forSchools and Colleges. The scheme grew quickly from theoriginal 40 students to the present level of nearly 600 students a year

1994


The Science Career

2002 saw the publication of Sir GarethRoberts’ Report: SET For Success. TheReport brought together and gave voice toprofound concerns about the UK’s capacityto support the science base at its presentlevel of activity. Its observations on thenumbers and aptitudes of young peoplegoing into professional careers in sciencemake disturbing reading. This is traced backthrough the insecurities and low levels ofremuneration for the early university-basedscience career all the way to students’increasing aversion in the later years ofschooling to subjects that are seen as‘difficult’ – primarily science subjects whichentail high levels of numeracy.

The emphasis given to science education indebates following the publication of theRoberts Report recognised the classroom asthe obvious starting point for attempts tokeep promising young people in science.

We describe elsewhere in this Review the wayin which the Foundation continues to developinnovative curricula to encourage youngpeople’s natural interest in science. Attemptsto harness this interest underlie the ScienceBursary Scheme for Schools and Colleges ,which gives many hundreds of young peopleeach year the chance to become Nuffieldscience bursars in the sixth form, supported intheir summer holidays to get a taste of doingreal research. This scheme, which is alsosupported by the Royal Society, the WellcomeTrust and four of the Research Councils, hasproved tremendously popular. In 2002, therewere some 600 bursars, with equal numbersof males and females, from more than 280schools and colleges across the UK,undertaking projects in 200 different settings(universities, hospitals, research laboratories,museums, commercial companies and ‘inthe field’). A mark of the promise of theseyoung scientists is that 25 of them went on todisplay their projects at the British AssociationYouth Science Fair earlier this year, winningten of the 23 prizes.

The approach of putting small amounts ofmoney to support large numbers of youngpeople at a critical point continues with theUndergraduate Research Bursaries. Withindividual grants in the range of £800 to£1,700, the Foundation is able to supportaround 250 undergraduates, drawn fromacross the sciences, to gain valuableexperience through undertaking a dedicatedresearch project. They are supported forbetween six and ten weeks during the longvacation before their final year to conduct anapproved piece of research under supervision.

For those who choose research careers inscience, engineering or mathematics, theopportunity for support continues with fundsavailable to support 80 or so newly appointedlecturers on the road to an independentresearch career. They are able to apply for upto £6,000 over two years to support thedevelopment of their research plans.

The Foundation is using the resources of one of its subsidiary funds to launch in 2003 a major new capacity buildinginitiative in the field of rheumatic diseaseresearch. The Oliver Bird Rheumatismprogramme will provide substantialfunding over the next five years to support25 new PhD scientists in rheumatologicalresearch. Their doctoral programmes willbe provided by five academic institutionshosting Oliver Bird Collaborative Centres,which will not only provide high qualityscientific and professional education tothe students but also – and distinctively –an overview of the field and their rolesand responsibilities as scientists. TheFoundation’s long-term aim is to develop through the programme a cohort of outstanding young scientistswho will enhance future research capacity in the field.

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2000

Launch of newCommonwealthprogramme

2002

The Foundationruns eightseparateschemes, making over1,000 separateawards eachyear, with acombinedexpenditure of over £3m


1956 - 2002

Supporting Social Scientists

A particular issue for Nuffield, with its strongtradition of funding social policy andeducation research, is the supply ofappropriately skilled social scientists. In this,we share in another area of nationalconcern about capacity. In particular, thegrowth of evidence-based approachesacross a wide range of social policy issueshas led to a concern about the number ofsocial scientists able to conceptualise andcarry out studies about social issues. And, inaddition to anxieties about supply, there areother concerns about the availability ofpeople with the skills necessary toundertake innovative research at theboundaries between different disciplines.

Many funders are exercised by theseconcerns and are meeting them in a varietyof different ways. The Economic and SocialResearch Council, for example, has set up amajor Research Methods programme andlaunched a Senior Fellowships scheme. TheFoundation has its own particularperspective on these issues. For many yearsthere was a Fellowship scheme for seniorscholars, but in 2000 the Foundation put inplace a new Fellowship scheme aimed atyounger social scientists who were at theearly stages of their post-doctoral careers.

The New Career Development FellowshipScheme gives to these exceptional youngsocial scientists a salary and researchexpenses, but also supports a partnershipwith a more experienced senior researcherwho will work with the Fellow as his or herideas develop. The aim is to provide‘additionality’ – access to some new skill ora new subject that the Fellow would havebeen unlikely to acquire in the increasinglyheavy press of other responsibilities thatnew staff must take on.

Social Science small grants

The Foundation’s other mechanism fordeveloping social science capacity is ascheme to provide small grants of up to£10,000 for research across all the socialsciences. The aim here is to supportcapacity by funding excellent small projectsthat may be developed by younger ornewer academics who are beginning theirindependent research careers. It also seeksto foster outstanding research that needs asmall sum of money – usually for travel orshort-term research assistance – of a sortthat universities themselves can no longereasily provide. Consistently popular withresearchers, the scheme is able to supportabout 100 small grants a year.

Two recent examples illustrate the ways inwhich the scheme supports social scienceresearch capacity. Dr Matthew Hilton, of theDepartment of Modern History, at theUniversity of Birmingham, has held twosmall grant awards – for a study of Britishsmoking habits and attitudes since 1945and The consumer and the state intwentieth century Britain. He was 26 whenhe held his first award, and in 2001 he wona £50k Philip Leverhulme Trust Prize as anoutstanding young scholar. Anotheryounger researcher who has recently wonan award is Dr Kirsten Schulze of theDepartment of International History at theLondon School of Economics. She wasawarded a Small Grant at the beginning of2003 for a study of Conflict in the SpiceIslands. She will explore the causes of inter-communal Christian-Muslim violence, itsdevelopment and attempts to resolve it.

Supporting Women’s Careers

In 1956, Lilian, Lady Nuffield establishedthe Elizabeth Nuffield Education Fundwith an endowment of £50,000. The Fundwas to be used for the advancement ofwomen’s opportunities “throughscholarships, grants or loans to womenand girls who desire to take a course ofinstruction or training…”

Over the years, the focus of grant-givinghas ranged widely within the general area

of support for women’s education. Since 1998, grants have taken the form ofcontributions to the childcare costs ofwomen in further and higher educationundertaking courses of study which willimprove their employment prospects.Subsidised these days by a significantcontribution from the Foundation, theFund is able to help about 200 womenevery year, including a small number ofrefugee women undertaking courses ofprofessional re-qualification.

Nuffield Farming Scholarships

In 1947 the Foundation launched theNuffield Farming Scholars scheme. By1956 eight scholars a year were beingsupported and the Foundationsuggested that as the scheme wasclearly successful it should be funded by the farming industry. A separate fundwas established and the Foundation’ssupport was gradually tapered down. In1968 a new Trust was formed, and in1978 it adopted its present name, theNuffield Faming Scholarships Trust.

Today the Trust operates in sevencountries and supports a network of some500 scholars in the UK and over 800world wide. There are no formal linksbetween the two organizations, but theTrust continues to hold its annual selectionmeetings in the Foundation’s offices.


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The Foundation’s endowment: 1943 to 2002

The Foundation was given an expendableendowment by Lord Nuffield of £10m in1943. This gift was of Morris Motor shareswhich performed well until the late 1960s.Between 1970 and 1974 the value of thisholding fell from £24.7m to £3.7m (beforeaccounting for inflation). However a muchsmaller diversified portfolio had beenestablished earlier which cushioned the loss(in 1974 the diversified portfolio was worth£5.2m). The failure to diversify fully,compounded by the ravages of the 1970’sbear market and high inflation destroyed asignificant amount of the Foundation’swealth permanently. For the next few yearsthe Trustees actively sought to rebuild thecapital base by restricting the annualexpenditure. (This would not now beallowed under Charity Commission rules.)

Endowment Values 1980 to 2002

Ten years ago the Foundation’s 50thanniversary report suggested that “anadequate restoration of the endowedcapital base was achieved in the 1980s,without returning anywhere near to theFoundation’s former relative size”. If theFoundation had chosen to protect 1980value of investments against retail inflation(RPI), it would now expect to haveinvestments worth £107m, but if the 1980value was inflated in line with earnings (AEI)we would expect to have £161m. At theend of the year the Foundation hadinvestments worth £170m, so in effect theFoundation has over the period maintainedits endowment in real terms despite thesignificant losses incurred during the bear market of the past three years.

Endowment values 1980-2002

The two lower areas show the 1980 value of the endowment,indexed against RPI and earnings respectively. The top line showsmarket values.

Financial Strategy

A foundation such as Nuffield has no newsources of income and thus differs frommost pension funds, or educational bodiesthat have endowments. However it alsodiffers in that it does not have any significantlong term liabilities. Its trust deed givespower to spend as little or as much of itsendowment as the Trustees wish. Over thelast two years the Trustees have conducteda thorough review of its financial objectivesand investment strategy. The financialobjectives they have agreed are:

a. to maintain (at least) the endowment in real terms

b. to produce a consistent andsustainable amount for expenditure

c. to deliver a) and b) within acceptablelevels of risk.

This is intended to ensure that theFoundation will continue in the future to be able to support a similar number of research projects and other activities as it does at present.

Capital Maintenance

In order to achieve this it is necessary for theendowment to increase in value in line withour experience of inflation. About 60% ofour expenditure is on wages, which havehigher inflation than general prices. Theremaining 40% will rise in line with generalprices. Given present expectations ofinflation we calculate that the foundationwill need its endowment to increase invalue by about 3.6% per annum in the longterm to enable the same amount of activityto be supported.

Market values fluctuate widely so it isnecessary to agree on some form of ‘base’to which our cost index can be applied. TheTrustees anticipate that an averaged marketvalue of the preceding twelve quarters on30th June 2004 will represent a ‘fair value’,to be inflated by the Foundation’s cost indexannually. (The reason for choosing this dateis to avoid locking in the inflated marketvalues of the late 1990s). If the marketvalue of the endowment becomessubstantially lower (or higher) than theindexed value (after allowing for marketvolatility), the rate of expenditure mayrequire adjustment to ensure that funds are not spent that should be saved, or saved that should be spent.

Expenditure

The second part of the financial objective isto generate consistent returns that willsupport a sustainable level of expenditure.Our expenditure is predicated on anassumption of a very long-term total return(income and capital returns) from theendowment of approximately 8%.

Total return 8.0%Investment management fees: 0.4%Inflation increase for endowment: 3.6%Annual expenditure on charitable activities: 4.0%

Thus it is the Foundation’s intention tospend 4% of its endowment value on itscharitable activities. In order to smooth shortterm volatility, this is based not on currentmarket values but an average of theprevious 12 quarter values.

Portfolio structure and risk

The third part of the financial objective is togenerate returns commensurate with anacceptable level of risk. The Foundation’sability to tolerate risk is different from that ofa pension fund. A foundation can tolerate‘shortfall’ risk. The Foundation could survivea permanent diminution in the value of itsendowment (indeed it has) – a pensionfund cannot.

Diversification has been important for theFoundation’s investment strategy for manyyears. Different asset classes behavedifferently under different economicconditions. The structure of theFoundation’s portfolio is shown below.

Similarly it is unlikely that one manager willalways be equally strong in every assetclass. A conclusion of the investment reviewwas therefore that the Foundation shouldmove away from having a single managerand should appoint specialist managers foreach of the main asset classes. This changetook place in March 2003.

Aver

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Risk % (as measured by volatility)

SOURCE: CAMBRIDGE ASSOCIATES


Portfolio structure

Higher returns imply higher risk. If the Foundation invested in a low riskasset such as cash, the long term return would be so low that afterpreserving the capital, the spending rate would be about 0.4%. Thechart shows predicted long terms returns and risk for the six assetclasses in the Foundation’s portfolio, and the weighting in each class.


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02 Analysis of Charitable Expenditure

During the year the Foundation madegrants worth £6.4m (2001: £5.2m); thegreatest value was awarded to universitiesand other charitable institutions; thegreatest volume was given to individuals.The diagram below illustrates this.

An important part of the Foundation’sactivities is the dissemination of theoutcomes of grants (often by seminar), and

the regular evaluation of grant programmes,together with the day to day managementof grant making. All these costs are identifiedin the diagram as ‘other costs’. As in the caseof the Language Programme, the grantmaking activity is an ancillary activity to the‘other costs’ of promotion and investigationof language issues.

These direct activities – as opposed to grantmaking itself – are a crucial part of our focuson practical outcomes.

Grants

Other costs

Statement of Trustees

The information on pages 24 and 25 is extracted from thefull Trustees’ Report and Financial Statements which havebeen audited by Horwath Clark Whitehill who gave anunqualified audit report on 9th May 2003. The auditorshave confirmed to the Trustees that the summarisedfinancial statements are consistent with the full financialstatements for the year ended 31st December 2002. TheTrustees’ Report and Financial Statements were approvedby the Trustees and signed on their behalf on 9th May2003. They will be submitted to the Charity Commission.

These summarised financial statements may not containsufficient information to give a complete understanding ofthe financial affairs of the charity. The full Trustees’ Report,Audit Report and Financial Statements may be obtainedfrom the Foundation at its usual address.

Signed on behalf of the TrusteesThe Baroness O’Neill2nd June 2003

The Nuffield Foundation28 Bedford SquareLondon WC1B 3JSTelephone 020 7631 0566Fax 020 7323 4877www.nuffieldfoundation.org

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