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Three ways City Bridge Trust approached flexible funding during the pandemic

City Bridge Trust (CBT) have signed up to our eight commitments for open and trusting grant-making. They join us as one of our 70 #FlexibleFunders to share their experience of responding flexibly.

 

I recently joined 10 funders at one of the first Community of Practice meetings to discuss Commitment Six – “We will enable them (funded organisations) to respond flexibly to changing priorities and needs“. It was a stimulating and enlightening discussion, which I look forward to building on as the community grows over the coming year. Inevitably, we discussed how the pandemic has catalysed funders to enable flexible and responsive work more than ever before. At the Trust, we approached this in several ways:

 


  1. Collaboration 

By joining London Funders’ ‘London Community Response’ (LCR) funder collaboration, administering the “pooled” funding element, we were able to direct more than £30m of funding to organisations that were pivoting their work to respond flexibly to the needs of London’s communities. We know from listening to our own funded organisations that much of London’s voluntary sector was involved in response work; at points, over 70% adapted their work in some way. By working together, funders were able to draw on each other’s skills. We also utilised the knowledge and expertise of voluntary and community organisations, including the LCR Equity and Inclusion partners, Ubele Initiative, Inclusion London, Women’s Resource CentreLGBT+ Consortium, Council of Somali Organisations and London Gypsies and Travellers, more efficiently as a collective.

 


  1. Core funding 

At the beginning of the crisis, we contacted our funded organisations to confirm our commitment to support them at such a crucial time. We had signed up to the London Funders “We Stand with the Sector” statement and wanted to back this up with tangible action.

We offered organisations that were holding project grants the opportunity to convert their funding to a core grant until March 2021. This allowed partners the freedom to quickly make decisions on expenditure changes using their knowledge and expertise of how best to run their organisation.

As the impact of the crisis became clear, we renewed the offer for a further 12 months. 36% of those offered the initial conversion took up the offer. Some organisations couldn’t utilise core funding, so we were open to other ways of supporting them, for example, pausing funding until projects could get up and running again.

We also offered many of our funded organisations with an annual income of under £0.5m a one-off payment equivalent to one-quarter of our usual yearly support. This was not tied to the project that we usually funded – organisations were free to apply the money to any of their costs, as they saw fit[1]. We heard from our own funded organisations and learnt from research, such as the Greater London Authority’s London Community Response survey, that smaller organisations could be much more flexible (and were less likely to have furloughed staff). They were uniquely placed to quickly respond to the emergency and to be trusted in their communities.

 

In Wave 5 of the London Community Response, recognising overwhelming feedback from the sector regarding the lack of longer-term non-project-related funding, we decided not to restrict grants to Covid-related work or specific projects. Instead, we invited organisations to apply for core funding towards any element of their work, including developmental costs.

 


  1. Minimising bureaucracy

We explored ways to free up more of our funded organisations’ resources, allowing them more space and time to reimagine services in light of the crisis. Our Impact and Learning team considered what we could do to reduce the administrative burden of our reporting systems; we drastically cut down the number of questions and amount of detail in monitoring forms. Funded organisations were still able to tell us about the impact of their work, but with a more focused lens. This approach was well-received, particularly in tandem with a relational approach to monitoring deadlines, extending where necessary. For emergency response grants, we offered a choice between completing a short form or participating in a phone conversation. Our Funding Managers reached out personally to organisations in their portfolio; to offer a listening ear and explore whether there were other ways we could ease the burden.

 

What next?

 

Over the year, these actions felt like authentic and realistic commitments to the spirit of the sixth principle. We’ve repeatedly heard how helpful a flexible and open approach was, particularly the early contact to check in with organisations.

 

Our funded organisations report that core support enabled them to adapt speedily, with the most significant shift being to online delivery. Many organisations had to make multiple adaptations – core funding was crucial to respond in this way. Grantees have told us that they’ve developed their partnership working, increasing referrals and signposting to reach more people and providing enhanced support for staff and volunteers. They’ve also integrated peer-learning and co-production approaches, improved “keeping-in-touch” activity and enhanced the level of tailored support on offer.

 

There’s more work to do; we want to integrate learning from the LCR collaboration into our practice in the future. We awarded almost 2,000 LCR grants, and quickly found that an even more flexible approach than we were used to was necessary. We amended our grant offer letters to reflect that we trusted organisations to change how projects were delivered.

Monitoring data collected so far demonstrates that organisations consistently delivered on the aims they initially set out (even if the delivery itself was tweaked along the way). Almost 90% of grant recipients spent the funds on what they had anticipated – organisations were able to accurately predict the support their communities needed, even in a time of unprecedented crisis.

 

We are reviewing our approach to core funding, having interviewed funded organisations (those who both accepted and declined the offer) and our Funding Managers and using other data from the last year. This will feed into the design of what core funding will look like for us in the future.

 

Our funded organisations have access to a Funding Manager with authority to approve reasonable adjustments; we will continue to ensure this built into our culture.

 

These steps have been taken alongside a wider journey towards become a values-led funder, which is still a work in progress.  Alongside continuing to fund, read and listen to, act on, and value the work of the voluntary and community sector, including infrastructure organisations like the LCR equity and inclusion partners, this approach will facilitate our partnership work with funded organisations to ensure that projects we support can be flexible across the lifetime of our funding.


How to get involved


You can find out more about open and trusting grant-making at our Flexible Funders webpage, including how to sign up to our Community of Practice. For more details or to share your own Flexible Funders story with us, please contact enquiries@ivar.org.uk


 
Footnotes

[1] We are limited by our own charitable objects to funding work that benefits Londoners. Therefore, all funding referenced in this article was restricted in this way. This is one of the reasons that we refer to “core” funding, rather than “unrestricted” funding.

Having meaningful conversations about your funding approach

The Shears Foundation have signed up to our eight commitments for open and trusting grant–making. They join us as one of our #FlexibleFunders to share their experience of our first Community of Practice and their key takeaways:

 

The Shears Foundation Approach

 

The Shears Foundation is a family foundation, set up in 1994, which makes grants of around £600,000 to £700,000 each year, mostly in the North East of England.

 

When I first heard about IVAR’s #FlexibleFunders call to action for open and trusting grant-making, there was an immediate appeal. The Shears Foundation is founded on principles of trust and mutual understanding between us and those we are helping to support. As a family foundation with a board of committed trustees, we are in an ideal position to be flexible, agile and take a degree of risk. Our philosophy is that we can be an effective funder through:

 

HAVING MEANINGFUL CONVERSATIONS > BUILDING RELATIONSHIPS > ESTABLISHING TRUST

In fact, the reaction from some of our trustees when I proposed that we should take the pledge and sign up can be illustrated with this one response:

“I think we are already doing everything we can, in the best possible way”.

After some discussion, we agreed that joining IVAR’s Community of Practice would give us a great opportunity to further develop what we do, hear about others’ best practice, and also share our own experiences in a cooperative and collaborative forum.

This ties in with my own philosophy and that of the Shears Foundation’s founders: it is vital for any organisation to adapt and improve through self-evaluation and continuous improvement. Hearing and learning from what others do is a key component of this.

 

In this blog, I’d like to share my experience of attending the first Community of Practice online event in April 2021.

 

 

The Community of Practice

 

I wasn’t sure what to expect from the first online meeting, apart from a warm welcome. What struck me straight away was the range of attendees: large and medium-sized family trusts and foundations; place-based funders; national funders; funders with interest in a particular field or theme; CVS’s and Community Foundations were all in attendance. The beauty of this was a diverse range of perspectives and challenges that were discussed in moving closer to the eight commitments.

 

What was particularly interesting were the lessons learnt by funders from the Coronavirus pandemic. Many of the participants recognised that the groups that they supported had to adapt, change and think on their feet, almost overnight in March 2020. Funders overwhelmingly recognised that they had a responsibility to match the adaptability, resourcefulness and agility of their grantees.

 

Funders had employed several important strategies in response, proving that we can work more flexibly. Strategies included automatically unrestricting grants, allowing delays and repurposing of grants for project funding, and accelerating and simplifying application processes.

 

Most importantly, there seemed to be a common thread: as funders we needed to value what a charity/beneficiary achieves, not how they achieve it.

 

Another key takeaway was to recognise the need for unrestricted funding and trust our grantees to know the best way to spend funds to achieve their goals. We currently offer core funding for funding a particular role / paid position or perhaps a specific non-project aspect of running costs. However, this isn’t truly ‘unrestricted’, and this is a discussion I’d like the trustees to have at our Annual General Meeting (AGM).

 

It was clear that the organisations attending were at different stages of their learning journey to being more open and trusting in their grant-making.

 

The session provided the ideal introduction, with open and honest discussion, respect for differing viewpoints and a positive and optimistic atmosphere.

 

I’m looking forward to being part of this as time goes on and incorporating insights into our practice.

Word cloud of what grantees says about the Shears Foundation.

 

 

 


Beneficiary feedback

 

One thing we could improve is getting feedback from the groups and charities we support on how we work. It’s something that we will be building into our processes in future.

 

However, I was asked to make a presentation recently on how we had responded to the Coronavirus pandemic. I wanted to get some “quick and dirty” feedback and asked 25 of our recent grant recipients (a mix of groups we’ve known for years and some new to us) to honestly describe our relationship in just three words.

 

The word cloud above shows we have the basis we need to build even more open and trusting grant-making in the future.

 

The biggest challenge for The Shears Foundation

 

We are fortunate to have a strong board with different backgrounds and wide-ranging attitudes to risk. I think balancing this range of perspectives and settling on an agreed attitude to risk is our next step, but it could be a challenge going forward.

In the words of one of our trustees:

“My only query would be in relation to commitment 3: accepting risk. I was just wondering how this squares with our duties as trustees and in relation to what the Charity Commission expects from us. I know that every grant we approve comes with a degree of risk, and I’m sure in practice, we would continue to assess each application with the same degree of rigour. But if this initiative is successful, I wouldn’t want it to evolve into something binding that might clash with our own due diligence processes.”

What is clear is that sharing experience, practice and solutions with others through this group will really inform how we approach this challenge and others in the future.


How to get involved


You can find out more about open and trusting grant-making at our Flexible Funders webpage, including how to sign up to our Community of Practice. For more details or to share your own Flexible Funders story with us, please contact enquiries@ivar.org.uk


 

Two practical ideas to increase unrestricted funding

The William Grant Foundation have signed up to our eight commitments for open and trusting grantmaking. They join us as one of our #FlexibleFunders to share some practical ideas to developing practices from their experiences and ideas:

One of the eight commitments IVAR is calling for funders to adopt as part of its #FlexibleFunders initiative is to ‘enable flexibility’. Unrestricted funding, in particular, is highlighted as the best way to allow grantees to respond flexibly to changing priorities and needs.

I’d like to share two practical ideas to increase the unrestricted funding flowing from funders to the third sector. The first describes an approach we’ve adopted at the William Grant Foundation. The second is something we don’t (yet) do, but which I think could have a meaningful impact if widely adopted.

1 – Turn restricted project grants into ‘designated’ unrestricted grants

One might assume that shifting to unrestricted funding means making radical changes to a funder’s application and grant reporting processes. But it doesn’t have to.

Many of us will make a grant for a project or activity that an organisation has applied for help with or that we are particularly interested in – and the grant size and duration will probably reflect the cost of it. In such instances, it’s common practice to make a restricted grant that can only be used for that purpose.

But do we need to formally restrict those grant offers? The answer depends on the degree to which your grant programme is specialist and targeted. If your strategy is focused on funding only a specific category of additional intervention or activity the grantee will undertake – and that’s the only reason you’re funding them – then you probably will. But if – like our foundation – you aim to find dynamic, effective or important organisations in your field or community of interest and are prepared to fund a range of costs and activities depending on what they tell you they need, then I’d suggest you don’t if the following conditions apply:

  • Is the grantee an asset-locked organisation whose objects are in line with your programme focus, and which you’ve assessed as competent and well run?
  • If the organisation had happened to apply for another aspect of its activities, would you have been just as interested in helping them?

If so, could you ask them to report back on the project or activity you’ve mutually identified, but make the grant unrestricted?

The benefits will be:

  • a reduction in resources spent on bureaucracy and compliance on both sides – not least the accounting gymnastics that restricted funding streams necessitate
  • freedom for the grantee to get the most value from your funding by having flexibility to adjust delivery or even reallocate the funding, for instance if it obtains another grant that can fund the project you’d discussed with them
  • a more open and trusting relationship from the outset.

At the William Grant Foundation, we call this – internally – ‘designated unrestricted’ funding. It’s important to note that for the grantee a grant is either unrestricted or it isn’t, so we’re at pains to make clear in our grant letter there are no strings attached. This means we’re trusting the organisation to follow-through on the plans we’ve discussed with them, or explain to us if their plans changed (though – importantly – without having to ask our permission first) and share what they learned along the way.

I’ve written more about how we choose when to use restricted or unrestricted funding here.

 

2 – Add general operating support to project support

My second suggestion is perhaps more radical but I think could be transformative. (I should be clear that although we often ‘round up’ project grants, the William Grant Foundation doesn’t currently implement this systematically.)

Here’s the idea: What if we added an unrestricted general donation on top of every project grant we made? (I’m already assuming the grant includes an appropriate contribution to the organisation’s central overheads on a full cost recovery basis.) There’s no yardstick here, but I’m going to suggest 10% of the value of the project grant might be a start.

Outside work, I chair a small charity with an income of about £200k per year, probably 50% of which is from restricted grants. So, a 10% top up to all those grants would give us another £10k unrestricted per year. Not a game changer but it could support a pilot project, upgrade our IT, or build reserves.

And if you’re interested in shifting power in your grant-making, not only would you be strengthening the organisations you support, you would be putting a percentage of your grants budget directly into the hands of people working in the fields or communities you support to allocate as they see fit.

We are comfortable with the private sector pricing-in a profit margin when we buy its goods and services – profit that can be reinvested in growth, innovation, technology, communications, workforce development, loan repayments etc. Or even extracted for private benefit. Yet we consistently fund the not-for-(private)-profit sector on the basis of break-even budgets, clawing-back underspends and reducing future payments to reflect previous accruals.

The pandemic has shone a light on the importance of charity reserves – how little some have, and how surprisingly reluctant others have been to use them. But for there to be reserves (and for trustees to have the confidence to spend them) there must first be surplus.

Funders have to think about how we help organisations generate a surplus in unrestricted funds if we want them to build and deploy reserves and maintain working capital. By working capital here, I mean funds that can be used at the organisation’s own discretion on its own priorities when it needs to. Without this kind of flexible buffer, organisations have less ability to adapt, innovate, learn and improve or ride out challenging times without first having to successfully apply to a funder (or more often, multiple funders!) in order to get a grant to do anything.

If we want to receive applications in future from an agile, creative and resilient third sector, learning and innovating its way towards ever more effective solutions to stubborn social and environmental problems, then we need to see contributing to core costs, working capital and reserves as part of the cost of doing business with it, just like paying the profit margin priced-in by the private sector.

I guess both these ideas could be seen as a significant departure from conventional practice. But I believe they are practical choices many funders could choose to make to address the ‘starvation cycle’ that characterises third sector funding.


Funders’ traditional ways of working are not set in stone. We should be prepared to review them, especially when the organisations we aim to support are consistently and clearly telling us they undermine the benefits our funding could achieve.


How to get involved


You can find out more about open and trusting grant-making at our Flexible Funders webpage, including how to sign up to our Community of Practice. For more details or to share your own Flexible Funders story with us, please contact enquiries@ivar.org.uk