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Four principles to shape your grant-making today

With months of local restrictions now extended to a national lockdown, it is clear that ‘Covid-recovery’ is far from us – even with the glimmer of hope in recent news about a new vaccine. And eight months on from the first national lockdown, we all desperately want to move out of emergency response mode. We need to find the confidence, skills and ways of working to operate effectively in our current environment, accepting that changing restrictions will feature in our lives for the foreseeable future. Let’s embrace this ‘new normal’ as best we can.

 

Although ‘paddling furiously’, VCSE leaders are increasingly assured in the face of the certainty of uncertainty: ‘We’re open, but it’s on my mind that we may need to close again.  But we know how to do this, and we will be able to do this more quickly’. And they are finding ways to combine planning with flexibility, enabling them to ‘move with the fluidity of the situation, in a pragmatic way’.

 

Some funders are finding it harder to make this leap. Used to a relatively structured environment of strategies, programmes, funding cycles, grant management and reporting, the constantly changing external context can be highly destabilising: We responded with the speed and agility that was required. But this placed strains on systems which were not developed to respond to such a scenario’. Meeting the requirements of the foreseeable future will be equally challenging. Adaptations introduced during the early stages of the pandemic need to be sustained and further developed. And other elements of the tried, tested, traditional, familiar ways of doing things will also need to change if funders are to make good the heartfelt commitment of so many to stand by the sector – and stand by it still.

 

Many funders felt freed by the imperative of the immediate emergency: ‘There was a lot of licence in the early months to respond generously’. But looking to the longer term calls for hard choices in the face of overwhelming need, a highly complex and changing environment and the imperative to act quickly: ‘The challenges before us are immense. And funders need to make decisions and contribute now’. Whatever strategic decisions individual funders make about their priorities, all have the opportunity to ensure these decisions are underpinned by day-to-day grant-making practices that best support applicants and grantees at the sharp end of delivery.

 

‘Become more of a partner and less of an auditor’

From very early in this crisis, we have heard a drumbeat of consistent and emphatic messages from VCSE leaders – ‘be brave’, ‘be flexible’, ‘trust us’, ‘be clear and open’, ‘understand the pressure we are under and reflect this in how you work’, ‘become more of a partner and less of an auditor’.  Looking back across the learning that has been generated from IVAR’s work with both VCSE leaders and foundation learning and evaluation staff, we would highlight four principles to guide funders in shaping the nuts and bolts of their grant-making and grant management practices now and for the future:  

 

  1. Express priorities, requirements and exclusions with absolute clarity. Funding criteria and guidelines do not always help VCSE organisations to make cost-benefit judgements about potential applications – whether because they have been put together too quickly, not rigorously reviewed from an applicant’s viewpoint, or deliberately written to allow funders to keep their options open. Ambiguity in guidelines is costly and frustrating for applicants at the best of times. In the current circumstances, the obligation not to waste time is paramount – for both applicants and funders.

 

  1. Scrutinise and simplify application and decision-making processes. ‘Pre-Covid expectations’ (about adequate reserve levels, robust forward plans and value for money, for example) may well be unrealistic in this new environment. And small changes make a big difference to applicants – such as testing every question for clarity and removing any that are not essential; relaxing word limits on online forms; or requiring less supporting information. There is much experience to draw on: 85% of funders who responded to IVAR’s recent survey have streamlined their application processes during coronavirus.

 

  1. Give the organisations you support the freedom to act. Make funding decisions based on ‘the spine of an organisation’: its mission, values, aims and track record. Trust these organisations to make good operational judgements about volume of activities, delivery mechanisms and managing risk day-to-day: ‘Funders need to trust us to know what we can do and achieve in our communities. We know how disproportionately some are going to be impacted, so funders need to give us a more blank paper rather than being too prescriptive with too many targets’. Now is the time to have real confidence in your funding judgements – by making longer grants; by giving unrestricted funding; by making reporting as light touch as possible.

 

  1. Act, learn and improve. Everyone is trying to make their best contribution in a context of huge uncertainty: ‘Some of the best solutions come from having some courage – saying “I can live with that risk”’. So, learning is critical: balancing data with intuition; combining evidence with instinct; and turning inevitable problems into better practice: ‘The question is “what can we do better”, not “what is the right answer”. Then we can try out multiple ‘better’ things quickly and back the ones that work’.

 

Read reflections from other funders on their evolving Covid-19 responses in our Learning from lockdown blog series.

 

Invite your grantees to take part in our peer support sessions – we are funded to deliver weekly drop-ins.

 

This blog is based on our work with over 390 VCSE leaders and over 100 trusts and foundations since March 2020.

Joined at the hip: Why you can’t make good grants without investing in learning

All the italicised quotes here are taken from members of the Evaluation Roundtable Community of Practice – staff with lead responsibility for evaluation and learning within Trusts and Foundations.

 

At IVAR, we have long championed learning as a driving force for foundation strategy and practice. By ‘learning’, we mean ‘not monitoring, not impact assessment, not log frames, not descriptive reports, but proper focused consideration of truly mission-critical questions – about both strategy and practice – which lead to action’.

 

This discipline has never been more essential. In the face of rising need and existential threat to many sectors and services, the decision that each foundation makes about how best to use its relative financial stability has never felt more important. And to be the best that they can be, foundations need to be thoughtful and reflective. Which is why learning is critical: balancing data with intuition; combining evidence with instinct.

 

So, when we hear of foundations talking about the ‘choice’ to be made between making a grant or investing in learning, the alarm bells ring. For, in our experience of working with evaluation and learning staff through the Evaluation Roundtable Community of Practice, they are providing deep and important insights. Their voices are essential.

 

Here are four things they have shared, that help make sense of what we are all facing: ‘an ongoing event with no clear exit point’.

 

  1. ‘“This is what we know now” is the most we can claim’

The pressure to find the right answer to ‘What next?’ is acute, not least because of the funding cliff edge facing many grantees. Set alongside this, though, is complexity and a series of unknowns. Although this is an extreme situation, social change interventions of all kinds are characterised by uncertain pathways within constantly changing contexts. Now and for the future, decision makers need to respect the complexity – to look, listen and pay attention – and avoid rushing to simple solutions too quickly: ‘the time for plans will come’.

 

Foundation leaders can support this iterative approach through the offer of spaces for thinking, reflection and sense-making, and opportunities to share ideas and insights so that they can be used to inform the complex choices and decisions we all face: ‘This is far from over. We need to allow time to step back, be patient and reflect’.

 


  1. ‘This is what we are picking up so far, so this is what we can do – what do you think?’

In the current crisis, evaluation and learning staff will offer best value if they are able to be agile and opportunistic, working with decision makers in a dynamic pattern of review cycles, making adjustments and improvements as they go, on a much shorter timeframe than would be normal within a three to five year strategy. Many foundations struggle to achieve the right balance between performance and accountability requirements, and the tolerance for flexibility and uncertainty that enables organisations to learn and change. Therefore, learning staff need explicit permission, encouragement and support if they are to present the kind of ‘work in progress’ intelligence that will enable foundations to retain the agility and responsiveness so many have shown in this crisis, for the longer term. Not least because there is no straight recovery line out of the current situation: as far as the eye can see, there is uncertainty and unpredictability.

 

  1. ‘Monitoring and evaluation information and other sources of data can only take us so far: it’s folly to expect to fully comprehend everything that is happening right now’

Covid-19 has exposed the fallacy of certainty. Like never before, it is apparent that we live in a complex and uncertain world. Our knowledge of it and our ability to predict it can only ever be partial. Evaluation and learning staff have a critical role to play in helping to steer their foundations away from the risk of becoming passive observers, content to gather and evaluate more data, and endlessly strategise, in the expectation that they will commit funding only once they can knowingly, with enough certainty, make a difference. Gathering and analysing information may provide some assurance that strategic and grant-making decisions are judicious, but these efforts are inevitably imperfect set against real-world complexity: ‘The challenges before us are immense. And funders need to make decisions and contribute now’.

 

  1. ‘Let go of impact’

Evaluation and learning staff have begun to reflect that fretting less about measuring or judging the impact of a grant has liberated grant-making: ‘We’ve just got to let it go on the impact front and talk about the importance of the work. Our questions need to be forward looking: “What’s being revealed?”, “What do we want to keep?”. And not “Did it work?” or “Was it value for money?”.’

 

And they are leading the way with framing powerful questions about how to deliver most value, both now and for the longer term: ‘The question is “what can we do better”, not “what is the right answer”. Then we can try out multiple ‘better’ things quickly and back the ones that work.’

 

Just like the organisations they support, funders are staring at an uncertain and volatile future. Some of the tools they conventionally use to support priority setting and decision-making feel slow, cumbersome and a poor fit to purpose. Whereas some of the behaviours and insights of learning staff are highly relevant, useful and usable. Making good grants and investing in learning are not alternatives – they go hand in hand. Learning is not an add on, it’s integral and essential.

Our next Evaluation Roundtable convening will be online on 1 December, with the theme of learning through complexity and uncertainty. If you are interested in joining this, or our more informal Community of Practice meetings, please get in touch with vanessa@ivar.org.uk

Seeing with an applicant’s eye

15 weeks ago, we proposed five principles to guide funders in rising to the challenge of the unfolding Covid-19 crisis: be bold, be generous, be genuinely flexible, be available, be reassuring

 

Since then, we have seen genuinely progressive practice. Some have transformed their relationship with grantees, dismantling onerous reporting structures and proactively offering a range of financial and technical support. Others have overhauled their application processes, streamlining application forms, and radically speeding up decision making. More are testing the waters of unrestricted funding. Some have even publicised their willingness to meet fundraising costs in support of the effort to keep going. This new mood of agility, trust and common endeavour points the way to a healthier and more collaborative relationship between funders and the VCSE sector. We have seen what is possible in an emergency.

 

The challenge now – to both funders and the sector – is to nurture and grow these new behaviours into the future. A future that, as far as the eye can see, is likely to be characterised by uncertainty and unpredictability. A future that will require, therefore, sustained commitment to flexibility and creative adaptation. So, it is worrying that some VCSE organisations report signs of wobble and strain, even in the most open and agile of funders. Many of these concerns sit in the detail of application processes, not in the big strategic questions around ‘who we want to fund and why’.

 

Too much risk is still being delegated: VCSE organisations are dealing with very short application windows for emergency funds, undeclared opening and closing dates, and funds closing early: ‘It’s incredibly undermining. It’s like they think we don’t have to plan because we have nothing else to do’; ‘Honestly, it would be as helpful to ask us to write poem or a short story at the moment as it is to ask us to give a three-year projection’.

 

Application processes do not reflect the times we are facing: Application forms are losing their internal coherence and slipping out of proportion to the sums of money or the duration of grant:

‘I’ve just finished an application to a major national funder for 18 months funding. There were 18 substantive questions on top of all the usual organisational stuff. That’s a lot in itself. But most questions contained two or three sub-questions. I think I had to answer more than 50 questions in all’.

Many grants remain at least semi-restricted: Many short-term grant offers do look and feel more ‘general’. But not enough funders are offering complete flexibility to adjust in response to changing circumstances without coming back for permission:

 

‘Everything is changing so fast, the only way to survive and keep our services running is to be flexible. If funders believe we are ethical and competent, why wouldn’t they trust us to spend the money well?’.

Some grants staff are struggling: Even the best of published policies rely on how they are interpreted and implemented by grants staff:

‘All over their website, they talked about trust and flexibility – but the grants officer behaved just like they always do, asking for loads of addition information and insisting that we justify every detail, then not getting back to us when they said they would’.

Criteria don’t seem to be changing and continue not to be shared: Especially in the context of longer-term funding bids, VCSE organisations don’t know how they will be judged. What will be done with their answers to questions about their Covid-19 response: ‘Whatever we write now will be out of date long before any decision is made’. What do funders think a ‘good reserves level’ or ‘sound financial management’ is, in the wake of Covid-19? What are they expecting in terms of forward plans and projections?

 

Application processes are unwittingly restrictive and unhelpful. Application information is unwieldy or dispersed: ‘I often have to sign up for an account, copy and paste all the application questions into a Word document, then copy in information from several different guidance documents before I can start thinking about whether we can make a strong application’. Online forms are full of fiddly detail that is slow to complete: ‘I get it – funders need to be able to analyse application data. But are they really using all these individual boxes we’re filling in?’  And word limits are too tight: ‘Funders can’t realise how much time is wasted shaving words – we don’t have that time right now’.

Perfection is impossible right now. Like everyone, funders are learning how to live with uncertainty and working hard to adjust day-to-day practices to make the best contribution they can. But, for the foreseeable future, responding better doesn’t call for major strategic reviews or complex analysis and consultation. All it takes is a commitment to see with an applicant’s eye and a willingness to shoulder more of the burden of responding to the current crisis and getting funds out to those who need them most and can use them best. Even the trail blazers amongst foundations can hone their practice. And for those who have struggled to adapt, a few simple changes could make all the difference.

 

We would suggest five simple and practical ways to help lighten the burden. These actions can help to ensure that the progress made at a moment of crisis is sustained, and that practice doesn’t slip back as we enter an extended period of recovery and renewal.

 

  1. Drill down into your funding offer so that it is crystal clear. Ask only the questions you need to ask – and test them rigorously for clarity and overlap.
  2. Set achievable timetables – and stick to them. VCSE organisations need to plan too. And speed up your response time. Take the pressure off hard-pressed organisations by taking more on your own shoulders – by, for example, convening additional committee meetings, bringing in more assessment capacity, giving proper feedback to those you turn down.
  3. Think about how to ease the application process – corral your guidance, prune out rarely used data fields from your online forms, test and build in 20% leeway on your word limits, and introduce new, easier ways of hearing from applicants who are already under pressure.
  4. Be open about how applications will be judged. Show your workings and explain why. Invite challenge and consider new ways of making hard choices.
  5. Support your staff well. New behaviours will not take root unless they are properly encouraged and rewarded.

 

While it may be too soon for definitive answers on longer-term strategy, there is a real opportunity for a more collaborative approach to rethinking the future and, in particular, funding practices, many of which may no longer be fit for purpose. Over the coming months, we’ll be working on a new project with London Funders, a group of eight foundations, and VCSE organisations across the UK to identify opportunities for sustainable adaptations and innovations to funding processes and practices.

 

We’ve been producing regular briefings on the challenges faced by VCSE leaders, and the questions and opportunities this presents for funders. Read more at www.ivar.org.uk/covid-19-briefings

Thinking about merger in 2020

This blog is complemented by the perspectives of four practitioners who have led merger processes.

IVAR has learned much over the last two decades about what makes a merger successful. How much of this can applied in the current circumstances?

23 years ago, as chair of an alliance of regional HIV charities, I asked colleagues a simple question about our futures: “If we were to design a voluntary sector response to the challenge of HIV and AIDS from scratch, how would we organise ourselves?” The answer was a single, national organisation. A vehicle with the potential to achieve two essential public benefits: enhanced equity and quality of services; and a louder and more powerful voice with policy-makers and funders. 18 months later, four of our organisations merged into Terrence Higgins Trust, followed a year later by London Lighthouse and, over time, others.

This approach was rooted in a belief that organisations are a means to an end, and that there might be a better way of meeting charitable objects.  We know that mergers entered into out of strategic choice seem most likely to yield benefits to beneficiaries (e.g. more and better services) and organisations (e.g. greater influence). However, even this ideal kind of merger requires time, money and an element of risk-taking: after all, mergers are an inexact science. For all the due diligence in the world, they always require a leap of faith.

Through the work that we have been carrying out over the course of the last few months, tracking and supporting the response of smaller VCSE organisations to the Covid-19 crisis, we have observed their extraordinary resilience, creativity and integrity. This is a precious resource and needs to be understood, valued and nurtured. At the same time, we recognise that, for a myriad of reasons, the possibility of merger is beginning to loom large for many of these organisations. Leaders are feeling frustrated, worried, and unsure about how to shift gear out of crisis and into recovery. Faced with daunting challenges – funding cliff edges and sky-high demand for services – some are beginning to look at merger as a way of continuing to deliver for their beneficiaries.  The challenge is that the conditions and resources for careful, constructive mergers are less likely to be in place at the moment: organisations are feeling anxious, and the space for thinking creatively about the future is squeezed.

So, when thoughts turn to merger, how can leaders respond in ways that feel authentic and useful?

If we strip the insights and guidance of Thinking about Merger  down to their bare bones, five things stand out:

 

  1. After the 2008 financial crisis, we found that organisations were more likely to survive and, over time, thrive if they were open to asking themselves fundamental questions such as: Who are we? What are we trying to achieve? What is the best vehicle to make that happen? At a moment of crisis, there may also be an opportunity to focus minds and bring the possibility of merger into discussions about the future. 
  2. For organisations with their backs against the wall, the proposition may be: the preservation of something versus the gradual disappearance of everything. But even if you enter merger explorations on the back foot – preoccupied, say, by survival rather than growth – it’s still important to identify and then pursue a positive agenda about change. Keeping a service going might not feel like the most compelling vision, but that may be the vision that is possible right now.
  3. However bleak your prospects, merger may not be the answer. In addition to a shared vision, you need a feel for the fit with your potential partner(s). Do you have enough in common, enough shared values, to trust in the potential of a merger to work? There is no shame in concluding not. We have written before about the importance of having an ‘awareness of mortality’. For organisations whose aims are no longer appropriate, or for whom sources of public funding on which they were overwhelmingly dependent no longer exist, or who have not been able to make a transition to a new environment or find a sustainable alternative business model, it may be more responsible to close down rather than compete with others or struggle on, hand to mouth. Or there may be steps short of merger that can at least preserve some of what has been achieved – such as hiving off a non-loss-making service, or simply much closer collaboration.
  4. Under normal circumstances, we would encourage possible merger partners to think about possible deal breakers upstream. These might include questions of identity (including name and brand), location, service model, and staffing. Without the luxury of time, or resources to support a staged process, it will still be important to articulate and be mindful of what each partner is not prepared to give up or take on. Without, at best, addressing these ‘red lines’ or, at worst, putting in place plans to do so, the risk of failure will increase.
  5. Finally, there is one key deal breaker which will need to be resolved as early as possible in the process: leadership. Here, as with all design considerations in a merger, form needs to follow function. In other words, what kind of leadership will the new, merged entity require to give it the best chance of succeeding?

IVAR and Bates Wells are working on a new edition of Thinking about Merger to support charities navigating the particular challenges presented by Covid-19. Sign up to our newsletter and be the first to know when this is released.

The key features and stages of merger are outlined in Thinking about Merger, and described in more detail in the Locality and TACT case studies.