The Wellcome Trust's expenditure is linked to the size of its investment base. It has a long-term target rate of return for its investments of 6 per cent a year in real terms, and aims to distribute, on average, about 4 per cent of its assets each year. To smooth annual fluctuations, expenditure is based on a weighted rolling average spanning several years. With its investments performing strongly, it has been able to increase significantly the funding it plans to make available over the next five years.

Charitable expenditure in 2005/06 was £484 million. The total expenditure budget available for 2006/07 has been increased to £540m. Levels of funding are anticipated to increase in future years, dependent on continuing good performance of the investment portfolio.

The additional funds will be used to support major new initiatives, and are unlikely to impact on funding rates for existing grant schemes.

Image: DNA unravelling; Oliver Burston