News & Insight
25th February 2019
Are charities buckling under the weight of complex grant making procedures?
Daily life for the voluntary sector is increasingly uncertain and complex. Volatility and instability, particularly for smaller charities has become a permanent feature. In a report published last week, grant makers were asked to ease off in cases where they may be impeding charities ability to deliver their work. The call to action of the Institute for Voluntary Action Research (IVAR) report is to urge grant makers to be flexible and adapt. By rethinking their approach funders can lighten the load for charities that are not able to keep pace with their demands.
In recent years voluntary organisations have made important changes to improve transparency and safeguarding procedures, to diversify revenue streams where they can and seek partnerships to ensure they are doing more with less. Even with these changes in place, the challenges of the current landscape remain.
It may come as no surprise that charities value unrestricted grants twice as much as restricted grants. Approximately £100m of staff time a year is spent by the sector on complicated grant making processes, which can be particularly complex for grants over £25,000. Respondents report that they would trade down around 50% for a smaller grant of unrestricted funding over restricted funding. This is particularly true of smaller charities and has been an observable trend since 2012.
There are examples of trusts and foundations that have been responsive to the changing needs of the sector. Examples of model grant makers most frequently cited are the Garfield Weston Foundation and the National Lottery Community Fund. Garfield Weston has publicly acknowledged the threat posed to small charities by the lack of core costs funding and the perceived impossibility of securing unrestricted grants that deters these organisations from even applying.
Less is more
A 2017 survey showed that when making applications success rates do not vary by size of charity but less does appear to be more when it comes to grant applications. Half of the organisations surveyed reported a 20-40% success rate, with the most successful of this 50% making fewer applications than the rest (see the full survey here). It seems that quality over quantity is the best approach, especially when faced with limited resources.
How grant makers can help (and not hinder!)
There are already some good examples of dynamic and flexible funders, who are ahead of the curve in responding to the changing needs of the sector but there remain many whose processes could be inadvertently hindering the charitable aims of organisations, by directing resources away from the delivery of the mission itself to dealing with grant application processes.
You can’t put a price on freedom
The lack of unrestricted grants is the most significant challenge charities identified in the grant making process – 69% of those surveyed strongly agree with the need to provide more unrestricted grants to cover core costs. In the case of smaller charities facing a great deal of change and uncertainty, the freedom to fund whatever it takes to keep the doors open is essential.
We need to talk …
Poor feedback is one of the most common complaints charities make of grant makers. Funders must listen to those they support, to get to know the challenges they face and encourage open and honest dialogue. Grant making bodies will have constraints of their own (a small workforce of volunteers or limited resources) but where possible the application and reporting process must be made less onerous on charities and better feedback given.
The majority of charities included in the IVAR report preferred some guidelines when applying for grants but some flexibility from grant makers is desired. Procedures employed in the case of emergency or disaster relief appeals allow for flexible and responsive grant making that adapts to accommodate urgent needs. It is the feeling of many voluntary organisations, faced with closure or a reduction in services, that they exist in a constant state of emergency and funders must adapt to give them a fighting chance.
Should you wish to talk about growing your unrestricted funding programmes or any aspect of your fundraising strategy please contact us.
 Full report published February 2019 by the Institute for Voluntary Action Research: Duty to Care? How to Ensure Grant-Making Helps and Doesn’t Hinder.