Following the money – origins of our investments

How does a charity chart their historical investments?

Smallwood Trust helps women become financially resilient and works with many racially minoritised organisations. Could money that helps them originate from a source that once created injustice? Smallwood Trust’s CEO Paul Carbury shares the Smallwood Trust’s insight into their past.

What role does our own financial past play in creating the present-day socio-economic situations we seek to address? That was the central question at the heart of our research into the source of The Smallwood Trust’s historic funds.

At the Smallwood Trust, we’re deeply committed to justice and equity. The Smallwood Trust’s mission is to enable women to be financially resilient. We help women to overcome financial difficulties and improve their social and emotional well-being. All our funding is directed at meeting this mission. The Smallwood Trust aims to achieve its outcomes through grant-making, working in partnership with and learning from our grant partners, influencing their work and the wider social landscape as it relates to our mission.

Informed by EDI policy

In 2020 we made a commitment to put anti-racism at the heart of our work. It’s important to do so, that it was the events of 2020 following the murder of George Floyd by racist police officers in the US that sharpened our thinking on the impact of structural racism on our mission.

We’re now in the process of deepening our understanding of the root causes of poverty that are both gendered and intersectional. Inherent to this, is an understanding of the mechanisms and levels of structural racism and imbalances of power that are rooted in violent and harmful colonial history, and how they impact our work in redistributing wealth and with it the means of self-determination to communities of women in need.

As a grant-giving foundation, money is central to what we do. Exploring our own financial past became increasingly important. As a result, discovering the origins of our investments was one of the four key areas of focus on the EDI strategy the board approved in 2021/22.

We were inspired by the growing number of foundations that are looking into where their money comes from. Many have shared that their funds come from unjust practices like the transatlantic slave trade. Alongside our ongoing work on anti-racism and DEI, we knew we had to find out where the Smallwood Trust’s funds come from. So we began to research our history.

Mining the archives

The Trust engaged Anj Handa, founder of Inspiring Women Changemakers, and an independent private ancestry research agency to do the initial investigative work. Lead researcher Paul Hurley led the process and delved into Smallwood’s handwritten historical records held at our headquarters in Malvern.  

Mining information from hundreds of historical documents including financial ledgers, applications from beneficiaries, letters, publicity material, photographs, objects and more from as early as the 1890s, and conducting deep dives into the organisations into which the funds were invested Hurley constructed a clear narrative of financial origins. Hurley used a financial forecast and modelling system to convert initial investments into modern day money.

Paul Hurley and his team together with Anj Handa collated their initial findings. Then the Trust engaged Ettie Bailey-King, founder of Fighting Talk Communications to write our report. Much of this article is based upon Ettie’s work with additional material created by communications consultant Fiona McAuslan.

Small beginnings, reduced circumstances

We already knew something about our founder. Most of our money dates to the 1880s, when Edith Smallwood started to collect donations. Edith Smallwood was born in 1859. Her father was a Yorkshire banker, who died and left her with an income for life. Her financial security was in sharp contrast to the experiences of many women at that time. Many women who couldn’t work, because of disability, societal norms, illness or old age, experienced poverty, exploitation, and homelessness.

She began collecting money to support women who were less privileged than her. In 1886, she founded the Smallwood Trust. At that time, it was called the Society for the Assistance of Ladies in Reduced Circumstances. From small beginnings, it grew into a large endowment.

Where the Trust’s money came from

Edith Smallwood urged wealthy Britons to give funds to help support less privileged women. These funds came from wealthy and powerful people in Britain. In the late nineteenth century, Britain’s power and influence was closely connected with colonialism. Edith Smallwood had this money she collected invested. Fund managers chose investments that would give a stable return.

The Smallwood Trust’s money isn’t directly connected to the transatlantic slave trade. This is what we’d expect, since slavery was almost totally outlawed in Britain by 1886, when Edith Smallwood first took up collections to support “ladies in reduced circumstances.”

However, some of our money is connected to the East India Railway Company (EIRC).

We found that:

• Approximately 0.03% of our money comes from investments – stocks – in the East India Railway Company
• The total of these funds in today’s money is around £318,000
• Some funds are also linked to John Buchan, first Baron Tweedsmuir
• Buchan had links with the British empire in colonised countries including Uganda and Canada
• It’s likely there are indirect links to other harmful practices. Other early donors will have had connections to the British empire. Many wealthy Britons made their money directly or indirectly through colonialism. For example, in 1932, L. E. C. Jennings-Bramley died and left a legacy of £109,825 to the charity. She herself had purchased £50,0026 worth of EIRC stock, and the proceeds from its sale were part of her estate when she died.

Exploitive practice

The East India Railway Company was run as a profit-making company and staffed almost entirely by white British people. Skilled jobs in engineering and management went to white British people while the lowest-paid people were the Indian labourers who built the railways. They were paid little and endured racism and discrimination.

The trust’s investment in the EIRC helped to finance, and then made profit from, the exploitation of people in India. The railways helped to extract resources more quickly and efficiently. The company also undercut and replaced thriving local industries (for example, cotton). It also gave white British people well-paid professional jobs, at the expense of local people in India who were denied access to resources and opportunities. 

Money and power

The Smallwood Trust exists to create more justice and equity in the world. It would contradict our values if we invested in practices that fuelled racist discrimination. We wouldn’t do it today, and it’s important for us to reflect on our involvement in this in the past.

0.01 to 0.03% of our endowment can be connected with the EIRC, and with individuals who benefited from colonialism. 

We recognise that money is political. Many fortunes have been created through violence and exploitation. This includes exploitation of workers inhumane conditions, and the extraction of natural resources with damaging consequences for the environment.

We commit to using our funds to centre the needs of the most affected people. This includes racially minoritised women, who live with the ongoing harms of colonialism, racism and sexism.

This doesn’t erase the past or justify the harms of colonialism. It puts resources where they are most needed. And it helps us move towards a UK where racially minoritised women, and all women, can thrive. 

Why does this history matter?

As a grant-making trust, it’s important for us to understand and acknowledge where our wealth comes from. We recognise that past harms continue in the present. We recognise that the British empire was violent and harmful, and that it has harms which continue to the present day (for example, some historians estimate that the British extracted $45 trillion in wealth from India and the countries which comprised India at that time, which affects their economies to this day).

So, where do our findings take us? We have used the historical investigations into our investments as a further impetus for our racial justice work which is rooted in shifting power to racial minoritised women. This is core to our mission to enable all women to be financially resilient. Evidence indicates that proportionally, racially minoritised women experience financial difficulties to a greater degree than non-racially minoritised women and that this disparity is linked to structural inequality. We estimate we have awarded approximately c.£5 million to community groups led by and for racially minoritised women, out of just over £15 million in total since 2020.

We are deeply committed to tackling racialised and gendered poverty. We do this through direct grant-giving, and also through embodying anti-racism in our ways of working. We want to model transparency and openness about the origin of our wealth to help the charity sector more widely reflect on where funds come from.

Our anti-racism work is not restricted to examining our past. It also informs our strategy, mission and culture. We fund organisations that are led by and for racially minoritised women. We also address structural racism in governance particularly through our shadow board programme. We are also shaping an inclusive culture, which involves leading with EDI.

We are not afraid to connect past violence with ongoing injustice. We know that past injustice has helped to perpetuate ongoing structural violence (such as racism, sexism, gender-based violence and other forms of discrimination). Historically, the key barriers preventing genuine and lasting social change from happening include a lack of political will.

Our current work doesn’t erase the past or justify historic harm. It puts resources where they are most needed. And it helps us move towards a UK where racially minoritised women, and all women, can thrive.

The more we as a sector understand about the economic sources of power the more, we are able to dismantle oppressive systems that are the barriers to a more equitable society so much of our work is geared towards.

To find out more about the research behind this project click on the link here

Paul Carbury is Chief Executive at the Smallwood Trust

This article first appeared in the Governance and Leadership publication – September 2024.

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