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Communities need flexible funders to influence the public sector

Over the last three weeks, I’ve met 32 leaders of small and medium voluntary organisations at four online peer support sessions. I have been inspired by their dedication and creativity: by hook or by crook, they have made it possible for services to reach people in dire need. Used to a turbulent environment and light on bureaucracy, their organisations moved remarkably quickly in response to the immediate crisis of lockdown, and have proved remarkably adaptable and resilient throughout the twists and turns that followed. Children with learning disabilities; undocumented young migrants; families of prisoners; housebound older people – all, and many more, have been supported by local organisations.

But the duration of the crisis, and the extreme levels of uncertainty, have stretched many close to their limits. And now, as we emerge out of an extended period of restrictions into a period of unpredictability, leaders are faced with harsh realities. On the one hand, demand for services is growing, from people with increasingly complex needs; on the other, staff are exhausted and funding is precarious.  

Our recent conversations – like with charity CEOs we met through our Leading in Uncertainty peer support sessions   echo much of what we heard in our 2012 study of social welfare voluntary organisations and their experiences of navigating their way through the recession. Then, as now, we heard stories of resilience and determination, as well as anxiety and despair.

‘I found the lack of recognition of our sector during the pandemic difficult… it was often forgotten that charities were still open and providing essential services too.’

At the same time, through both the recession and the pandemic, we have been reminded of the disproportionately important role that trusts and foundations play in supporting these organisations. Since March 2020, their flexibility has offered a lifeline, ensuring the continuation of essential services and activities.

In particular, the emergency has shown us that lighter, more flexible, more trusting funding practices are possible.  And hopes are now high that trusts and foundations will ‘keep the faith’ through the period of prolonged upheaval and uncertainty that lies ahead. This is the driver behind the open and trusting grant-making campaign , with its commitment to sustain and build on progressive practices for the future.

In 2012, we heard a plea for trusts and foundations to step into an advocacy role, using their influence to stimulate and facilitate debate and action about the adverse effect of public sector funding cuts and the decimation of public services. The response was, largely, to remain silent. For some, taking on this role felt like a step too far away from independence and into ‘campaigning’. For others, there was a concern that sweeping statements would ignore the constraints faced by public agencies, and might ‘tar everyone with the same brush and ignore the pockets of flexible public sector practice’.

However, almost ten years later – faced with similar difficulties around government funding, and in ‘the foothills of the economic shock’, the need for someone to speak out remains urgent:

‘We have put in a massive shift. Often unheralded, or taken for granted. Our work is vital, but it can’t just happen on a wing and a prayer. And it’s not just about one tweak here, and one tweak there. We need the whole system to change.’

‘If reporting deadlines on one grant shift, or processes for another become easier, that’s great. But unless that becomes standard practice across the board, the stress and the burden are still there.’

‘Our vital contribution isn’t really understood by statutory authorities. But without the support of these bigger players, we will not be here to make the system work: reaching minoritised communities, interpreting the benefits system, plugging gaps and mopping up mess.’

Trusts and foundations – with their prize assets of independence and leverage – are perfectly placed to step up and argue for greater consistency and flexibility in how the work of voluntary organisations is funded, both within their own sector, as well across all levels of government. This is not the moment to be bashful. For, without vocal and concerted effort, there is a genuine risk that vital organisations providing essential services will buckle under the strain.

This is what applying for funding feels like

IVAR_word cloud_Jun 2021_v11


Introduction from IVAR

 

Much has been written about how funders acted differently in the context of the pandemic. Funded organisations have celebrated lighter touch processes, faster turnaround of grant decisions, recognition of uncertainty and the need to adapt – even the topsy-turvy scenario of being offered funding without asking for it. There is a strong desire from all concerned to retain these practical changes. However, alongside this and with much less attention, grant applicants are still carrying the burden of rejection after rejection, often receiving little or no feedback, unable to connect with funders as they would like. The experience of applying for funding still has some way to go to ensure it’s a mutually respectful process operating on a more level playing field. 

 

This is what we heard when we asked 22 charities about their experiences of applying for funding, as part of our open and trusting grant-making initiative. Whilst almost everyone recognised the positive changes through Covid-19, many still talked about the emotional rollercoaster generated by unsuccessful applications: the stress and self-doubt, the fear and inability to understand what is really needed for success. This blog, in the words of grant applicants themselves, offers an insight into these feelings. We ended by asking ‘what would make it feel better’? Some of the answers are surprisingly simple and return to the concepts of respectful, open and trusting grant-making. 


‘Exciting’, ‘rewarding’, ‘creative’

 

As grant applicants, we are incredibly passionate about the work we do. Writing grant applications is part of the fun and challenge of our job; successfully applying for funding helps our organisations to fulfil their mission and support the communities we serve.

 

However, for every successful application we make, there are many more that have been rejected.

 


Dealing with rejection

 

We know funders receive large volumes of applications and have to make tough choices but dealing with rejection can be immensely disappointing. We feel that we’re letting our organisations down, as well as our team and colleagues. You can feel responsible for the success of the entire organisation. It’s embarrassing having to tell colleagues ‘we didn’t get it’ – people’s jobs and our work for beneficiaries is at stake.

 

One of the most frustrating things is that you rarely get any communication from funders. To put so much work into an application that you get really excited about, but not receive any feedback, is incredibly difficult. It makes you question your skills and whether that funder will ever be right for you.

 

 

Maintaining resilience and wellbeing

 

Learning how to manage rejection and build resilience is a key part of how we persevere. Having a stable team and support network is vital in helping you manage the emotions that come up when applying for funding.

 

It’s not always as simple as picking up the phone to ask why an application didn’t make it through. The power dynamics make that hard, and you don’t always know the rules. It’s like that feeling you get as a teenager, plucking up the courage to call someone you wanted to ask out. You’d dial the number but hang up at the last minute as you were scared they’d say no.

 

 

Things can change because things have changed during this pandemic

 

We have seen greater flexibility from funders, with offers of emergency or unrestricted funding, and relationships more likely to be characterised by trust and open communication.

 

Having more positive relationships has allowed us to be more honest about our struggles, and clearer about the support we need.

 

However, with things beginning to open up again and emergency funding coming to an end, we are still in a period of deep uncertainty. While we are grateful that funders showed so much compassion and flexibility during the pandemic, we are fearful that this behaviour won’t continue – things may be slowly going to back normal, but we’re not out of the woods yet!

 

 

What would make it feel better?

 

Applying for funding needs to be a mutually beneficial experience but at the moment it often feels one-sided. Current application and assessment processes can bring up feelings of dejection and failure, but in the best cases they can be incredibly rewarding. There will be no ‘one size fits all’ approach – what suits some organisations may not suit others – but we know that open and honest communication is crucial whatever the process looks like.

 

We’d like to see more of a balance between the needs of charities applying and the funders receiving applications – so that there is less of a burden on either.

 

Here are five things that funders can do to help:

 

  1. Continue the flexible, open and trusting funding practices that many adopted during the pandemic – clear criteria, core or unrestricted funding and light-touch forms all make a big difference.
  2. Be more transparent with eligibility criteria and share decision-making processes.
  3. Consider different requirements depending on the size of grant. For example, be open to different types of applications (e.g. video applications), use publicly held information (e.g. financial information from the charity commission) and only ask relevant questions.
  4. Ringfence funding to support specific groups or communities (e.g. small charities, community-led groups, ethnically diverse charities). Smaller organisations and those that support marginalised communities are often competing with larger organisations that have more resource and a paid fundraising team. Ringfencing funding could help.
  5. Create opportunities for open dialogue. Sometimes it feels like funders exist behind computers. Being able to talk honestly, even if we’re told that our application has been unsuccessful, is a sign of a good funder who we may want to develop a relationship with in the future.

A last word from IVAR

 

In the rush and sheer volume of applications received, it might be easy to forget there’s a person behind the application form and that how funders acknowledge, feedback and communicate decisions has a real impact on how applicants experience the process. Grant applicants are passionate people who care deeply about the work they do they and know that it’s not possible to develop in-depth relationships with all funders or be successful every time. But following through on some simple commitments to a more open process, where feedback is standard and relationships easier to navigate, would go a long way to level up the power imbalance. Our aim must surely be to remove words like ‘scary’, ‘frightening’ ‘stressful’ and ‘frustrating’ from people’s experience.  

 

The next stage of this research will explore how a small group of funders are trying to bring the principles of trust and respect to life in their applications and assessments processes.


 

This blog is based on the experiences of 22 charities based across the UK, including: 
Logos of charities who have co-signed the blog.

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


 

Four lessons for funders from a complex and uncertain year

One year ago, on 9th April 2020, we published The pressures of uncertainty – the first of fifteen Covid-19 briefings for funders, based on our peer support sessions for the leaders of small to medium VCSE organisations across the UK. Having heard from more than 500 leaders, we offer four reflections on what matters most in how funders go forward.

 

  1. Think and act strategically

The coronavirus emergency created the imperative – and the freedom – for funders to be responsive, flexible, and agile. But it has also shortened our horizons. And many of us are now looking at how we can retain the creativity of the emergency, in the urgently needed shift back to longer-term planning cycles.

 

VCSE organisations and funders alike face hard decisions about strategy and priorities. Extreme uncertainty is now a fact of life, and the challenges facing all social purpose organisations as the longer-term implications of Covid-19 take hold are immense. And yet, over the last twelve months, we have seen that you can achieve a lot when things are difficult and changeable: if you move beyond simply having a strategy, to thinking and acting strategically. 

 

This starts with being clear about your purpose, focus, and underlying values. The essential – and often neglected – next step is making sure that all of your systems and practices are aligned with these commitments, not working against them. Finally, it calls for a willingness throughout the organisation to live with complexity and uncertainty, and act anyway – to let go of the fallacy of certainty and give up the fruitless search for measures and metrics that prove impact, committing instead to an agile and iterative way of learning, that supports informed judgments about making a better contribution.

 

You can read more about how the idea of alignment can help to navigate uncertainty here.

 

  1. Recognise how much ‘how you do it’ matters

Without your support, good organisations doing work that you care about will be lost. This is what risk looks like now – not about knowing every detail about an organisation or exactly how every penny of your funds is being spent. There is a pressing need to bring day-to-day grant assessment and grant management practices in line with the new realities. And to ensure that they respect and build on the strengths of VCSE organisations that have been so evident over the last year.  

 

This emergency has shown us that lighter, more flexible, more trusting processes are possible. The powerful message from VCSE organisations is that it is time to make these changes widespread and permanent. And that doing so will enable better work – during an emergency and beyond. A growing movement of funders is responding to this call to action, determined to move beyond words – ‘trust’, ‘speed’, ‘light touch’ – and translate them into visible, tangible, durable changes to behaviour and practice. To find out more and be part of this effort, visit www.ivar.org.uk/flexible-funders.

 

  1. Support the voices of VCSE organisations

It is easy to feel overwhelmed by the social, economic, and environmental impact of Covid-19, and the deep structural and material inequalities it has exposed. But VCSE organisations are well-placed and eager to be part of the collective effort to tackle them. Close to the ground and to the individuals and communities that are at the sharp end of economic recession and accelerating social change, their voices – and the voices of the people they serve – must be part of the debate about what happens next. You can support their participation – by reserving some funds to support advocacy and campaigning work; creating spaces for hard pressed front-line organisations to get their heads above water and share what they know; and using your leverage and brokerage to provide a platform from which the sector’s contribution and voice can be amplified and championed.

 

  1. Make your thinking visible

Closer to home, you can open your policy and practice to the influence of others, by making your thinking more visible, and by seeking out and hearing diverse and dissenting voices, ready to say when practices are falling behind the curve of front-line experience. Making our own messy, imperfect thinking visible is what humility looks like in practice. It invites in people with alternative views on the world and with different interpretations of what’s happening, so that we can make meaning together about what we’re seeing and what it suggests we should do next. The more you can make your own thinking visible and invite others to do the same, the better we will all move towards transformational learning that helps us to understand what’s needed. And make our best contribution to delivering it.

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


 

Promoting equitable, inclusive and transparent grant making

At a recent Evaluation Roundtable Community of Practice session we asked what working practices people are hoping to retain from lockdown; and what they are looking to improve or introduce as they approach autumn and winter. In the second of our blog series addressing these questions, we ask Himali Dave (Urban Movement Innovation Fund) to share her reflections.

 

Despite the stark social, political and economic moments of the past year, we have seen incredible resilience and drive from our grantees. This has prompted us to reflect on our role as a funder and convener, and how best we can support organisations – not only to continue to meet their own strategic objectives during this period, but also to create a collective impact that is greater than the sum of its parts. Reflecting on what we have seen emerge with and through our partners, below are 3 key practices we are looking to retain and grow.

1. Agile and responsive grant making

 

We have realised that our collaborative grant making philosophy itself has been key to enabling UMIF to respond quickly, from supporting grantees to adapt and pivot projects through to responding to the field’s resource and capacity needs to operate in their new respective realities. By consciously minimising the associated layers of bureaucracy that often comes with grant making, we have seen more trust built with the field, as well as increased scope for creativity.

 

By consciously minimising the associated layers of bureaucracy that often comes with grant making, we have seen more trust built with the field, as well as increased scope for creativity.

 

Examples of this can be seen in global response grants which went from proposal to approval process within two months, including grants enabling organisations across India, South Africa and Mexico to virtually connect grassroots allies under lockdown. We need to hold onto this as a guiding principle and strive for high levels of collaboration and continued dialogue with grantees, and in doing so promote equitable, inclusive and transparent grant making.

2. Building shared ownership of learning agendas

 

Whilst the pandemic has overhauled ‘business as usual’, it has also sharpened the focus on key questions which often preoccupy funders and NGOs alike: “What are we learning? And how are we putting that learning into practice?”

In light of the fact that we are a relatively new fund, with most grants not yet having reached the one year mark, we have used this opportunity to embed a learning approach into new projects early on in their development. Through this process we have had some incredibly transparent conversations with grantees around their measurement-related anxieties – a common concern within movement building work, which is often hard to measure and attribute to individual projects. A key outcome from these conversations has been shifting the focus from ‘success’ to ‘learning’, which has really encouraged our grantees to consider metrics as a positive and experimental tool to accompany key learning questions, rather than donor-pleasing exercise.

 

A key outcome from these conversations has been shifting the focus from ‘success’ to ‘learning’, which has really encouraged our grantees to consider metrics as a positive and experimental tool to accompany key learning questions, rather than donor-pleasing exercise

3. Fostering virtual communities

 

Transitioning to a virtual operating space has not only fundamentally shifted how we interact with each other, but it has posed an additional challenge for UMIF as a funder that seeks to convene the field and foster collaboration and networking.

In order to maintain and grow the momentum within the community, we have hosted virtual convening sessions through the year, bringing together 55 participants from civil society and philanthropy. Despite the successes we have had in developing various strategies and collaborative projects remotely and across multiple geographies, ‘Zoom-fatigue’ is a real challenge and something that we have had to be mindful of. We have tried to apply the same principles as we would do for in-person sessions, with a unique offering for each convening: we bring in external facilitators, regularly check in and gather feedback, and encourage dialogue and interaction through breakout sessions. Building on grantee feedback, we have also tried to support regular points of contact in between these moments through newsletters examining best practices.

As we approach 2021, and with lockdowns most likely to remain a regular feature in our lives, we need to hold onto and smarten our utilisation of these technologies and techniques to ultimately strengthen and deepen the connectivity amongst our field of grantees.


Next Thursday (29th October), in the third in our new series of blogs about learning from funding during Covid, Oliver French, from Lankelly Chase, will reflect on what he and colleagues have been learning about what’s been made visible, possible and necessary as the covid-19 pandemic has unfolded.

If you are interested in joining our Evaluation Roundtable Community of Practice for learning and evaluation staff in UK trusts and foundations, please email vanessa@ivar.org.uk.

Making ‘relational’ real: Our experience of funding during Covid

They say moving to a new house is one of the most stressful things you can do. For others it’s starting a new job. And as everyone knows now, living through a pandemic has been a new extreme of stress. But imagine all those things at once.

 

We were told to work from home after I spent less than 2 weeks at The Robertson Trust. I barely had time to learn everyone’s name (sorry colleagues). I had just moved myself up from London to Glasgow. All my stuff (plus partner) was in a mountain of boxes in our tiny Greenwich flat, ready for us to move into our new house on the 24th of March. That’s right – the day after lockdown.

 

I’m glad to say that we did manage the move – but not without a huge amount of stress, panic and surviving for more than a month with no furniture.  

At the same time, The Robertson Trust was experiencing its own stresses: a change in organisational structure, a new strategy to work out and staff adjusting to working from home.

 

Reflecting on the last six months, one thing I know now is the antidote to stress is being kind to yourself and asking for support when needed. I have certainly leaned on friends and family for support and given into a lot of creature comforts during lockdown. But, can we, as a Trust extend a sort of organisational kindness?

 

A new (kinder) approach?

 

We know that many Third Sector organisations have struggled to raise funds or generate income throughout lockdown and that many have had to radically change the way they operate. At the same time, they are seeing more demand from the communities they serve. In short, the charities we support, and the people who work or volunteer in them, are having a tough time.

 

We already knew that one of the ideas we wanted to employ in our new way of working was being ‘relational’. While principles on paper can be often be meaningless, the need for a relational approach has really come alive over the last six months. Although developing and implementing a new strategy during lockdown hasn’t been easy, I don’t believe we would have lived this principle so fully if it had been at any other time.

 

I see ‘relational’ as being supportive or kind – values that continue to be present in abundance across communities in Scotland. And just like going the extra mile for friends and family during lockdown; the same is true of the charities we work with.

I see ‘relational’ as being supportive or kind … just like going the extra mile for friends and family during lockdown; the same is true of the charities we work with.

As part of developing our new strategy, we have reviewed our communication. The way we communicate externally is now friendlier, supportive and more straightforward. We’ve also thought about accessibility and given options for people to highlight additional support needs.

 

A new strategy gave us time to assess our relationships and our role as a funder. We proactively build and maintain relationships in a wide range of sectors. We listen to how areas that we are interested in supporting have been impacted by Covid and how, using our assets as a funder and connector, we can help to make a difference.

 

Through the development of our funds, we reviewed the way we considered applications: We thought hard about the experience from an applicant’s point of view. We now have clearer and more transparent application and assessment processes that are proportional to the amount organisations receive.

 

Using Trust in Learning

 

Our approach to learning from our funds is based on relationships and trust. We will no longer ask our grant holders to tell us what outcomes they want to achieve. We will no longer ask them to measure those outcomes at the end of their grant period. We trust them to know the needs of their communities, to spend their grant wisely and to do a good job.

We trust our grant holders to know the needs of their communities, to spend their grant wisely and to do a good job.

We know that many people working in the third sector spend too much time writing funding applications and reporting on that funding. If a project or service has a melting pot of funders with different reporting requirements, that can mean a huge amount of time away from frontline work.

 

We still want to hear from grant holders at the end of their grant, but we want to check in on their experience: What were they able to do with their funding? What went well? What challenges did they face? How can we help them to overcome these in the future?

 

Organisations we fund can also choose to report to us in a way that’s meaningful for them. We’re happy to speak on the phone or they can send us a video or a report they’ve already made. 

 

Part of our approach to learning, and the shift away from formal reporting, is about seeing the benefit of informal data. What will tell us more about an organisation – a list of outcomes that they may or may not have achieved, or an informal chat where they have free-reign to tell us everything about their work? I’m excited to see informal conversations and peer learning events sitting alongside more traditional methods of evaluation like surveys.

After all, we’re not here to monitor and regulate funding – we’re here to support organisations and learn alongside them.  

We’re not here to monitor and regulate funding – we’re here to support organisations and learn alongside them.

What next?

 

The only thing about the immediate future is its uncertainty. We don’t know when or how new restrictions will end. We don’t know how badly the third sector will be affected. We don’t know the long-term impact on communities. We do know, however, that the pandemic isn’t over, and the foreseeable future will continue to be tough for everyone.

 

Despite this, I believe lockdown has made us a kinder funder who looks to build strong relationships with the organisations we work with. We’ve really brought to life the principle of being relational and we will continue to put this principle in action.


Hazel is a member of our Evaluation Roundtable Community of Practice for learning and evaluation staff in UK trusts and foundations. If you are interested in joining, please email vanessa@ivar.org.uk.

Next Thursday (22nd October), in the second in our new series of blogs about learning from funding during Covid, Himali Dave, from the Urban Movement Innovation Fund, will reflect on what she and colleagues have been learning about how best to support organisations to create a collective impact.

A simple ambition for grant-making: unrestricted and light-touch

Over the last decade there has been much talk of funders – particularly trusts and foundations – trying to become less burdensome, more straightforward and quicker in their dealings with applicants and grantees. In the current context, as funders and VCSE (voluntary, community and social enterprise) organisations grapple with uncertainty, anxiety and complexity, we are all having do things differently. It’s too soon for definitive answers on long-term strategy but we feel there is an opportunity now to collaborate in rethinking the future and the funding practices that will best support it – to explore what’s needed to enable funders to remain outside their normal. This is the focus of our new learning review, in collaboration with London Funders and a group of charities and funders.

 

 

As a group, we are ambitious for change. We recognise that the moment demands it. Not just the need for a simpler philanthropy, one that can reflect and accommodate the anxiety and uncertainty of applicants. But also a respectful philanthropy, one that recognises that applicants and grantees have assets – activities, services, reach, trust, legitimacy, practice, knowledge, expertise, energy and passion – that have intrinsic value and significance. And an inclusive philanthropy, one that is resolved to rise to the challenge (so strongly exemplified in the Black Lives Matter protests over recent months) of breaking down the systemic barriers that exclude and disadvantage so many.

 

At the same time, we need to be determined. When people comment wryly that ‘it took a pandemic for the value of unrestricted income and light touch reporting to be felt by trusts and foundations’, it brings home how hard it is to achieve deep and meaningful change. Together, we seek to translate words – ‘trust’, ‘speed’, ‘light touch’ – into visible, practical and durable changes to behaviour and practice. To turn things upside down, so the burden falls on funders to ensure that their systems and their processes are truly simple, respectful and inclusive.

 

Together, we seek to translate words – ‘trust’, ‘speed’, ‘light touch’ – into visible, practical and durable changes to behaviour and practice.

We have been here before, researching and arguing for progressive practice. In 2011, IVAR embarked on ‘Recession Watch’, exploring how independent funders could help small voluntary organisations navigate the political and economic uncertainty sparked by the 2008 recession. We heard about the reduced availability of core funding; higher demand for services due to increasing poverty, hunger and unemployment; difficulty accessing ‘funder plus’ support due to the time or travel commitment incurred; and a lack of time for strategic planning that amplified these other issues.

 

Five years later, in 2016, we returned to the question of small organisations’ health and prospects through a study on sustainability. We argued for relational, rather than contractual, interaction between funders and funded organisations. An interaction which values the contribution of the ‘real world’ experience and knowledge of the funded organisation and the resources, overview and convening power of the funder.

 

Then, in 2018, we returned to the Recession Watch organisations. We found that their ability to adapt continued to be hampered by precarious balance sheets and uncertainty about their future. And we highlighted again the importance of greater flexibility, of funders making processes more proportionate – looking for ‘not what suits me but what helps you’; and of being more responsive: giving more core funding, more feedback, more support. We saw encouraging signs of some foundations being more realistic about the outcomes they can expect small organisations to deliver in complex environments, while increasingly valuing the unique role they play in meeting the needs of those who do not fit into standard boxes.  

 

Speaking most strongly to the current crisis, in 2018 we published The possible, not the perfect. Grant makers who responded to emergencies during 2017 demonstrated just how far foundations are able to adapt their procedures in the face of crisis. Processes were slimmed down, conversations took the place of form filling for applications and reporting, and time frames for decisions radically contracted. ‘Being effective’ in these circumstances did not mean delivering a perfect grant programme that no-one could question or criticise; it meant being ‘straightforward, easy, quick and trusting’.

 

Then, as now, we argued that that this notion of ‘effective’ grant-making had the potential to resonate beyond the confines of emergencies. Funders were excited by what had proved possible: ‘There is an opportunity here and it would be a shame to let it go. Let’s not get too bogged down in all the problems and challenges – all it takes is a few organisations who are willing to get on with trying out some of these ideas to see how they work’. And local organisations trying to serve their communities were hungry for change: ‘Every day in a community is an emergency. They don’t have to have a tragedy to give money that way.’

 

Throughout this period, funders have been evolving. Green shoots of genuinely progressive practice have been slowly emerging – now rocket propelled, as everything has been, by the imperative of the Covid-19 crisis. In a few short weeks, some funders have transformed their relationship with grantees, dismantling onerous reporting structures and proactively offering a range of financial and technical support. Others have overhauled their 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.

 

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.

There is much to draw from and build on. That is why we are ambitious. But we must be determined. Because, while we know how flexible and imaginative funders can be in the face of emergencies, we have also lived through stalled attempts to evolve funder practice. Already some foundations are feeling the pull of familiar ways of working – a sense that ‘the immediate emergency response has been successfully negotiated, now let’s get back to business as usual’. And, for applicants and grantees – waiting for the email, wondering whether to call, second guessing what is required, struggling to interpret criteria, jumping through hoops, dressing up core costs as innovations – the stress and the strain persist. The power to change this, the power to remain outside the normal, resides with trusts and foundations. Their importance for the VCSE sector cannot be over-estimated. They continue to be uniquely placed to provide continuity; take risks; operate flexibly; and invest in politically unpopular or marginalised areas. With these freedoms come responsibilities. Not to shoulder all of the burden; but certainly to ensure that their contributions are the very best that they can be.

 

We have seen what is possible in an emergency. The challenge now is for funders and VCSE organisations together to interrogate these new behaviours and to nurture and grow the best of them into the future. A future that, as far as the eye can see, will be characterised by uncertainty and unpredictability. A future that therefore requires a sustained commitment to flexibility and creative adaptation. That is our ambition.

 

Join us by completing this survey – it will take approximately 20 minutes and will inform work to help to shape both future emergency approaches and general grant-making practice (e.g. stripping back application processes; reaching new groups or speeding up decision-making). 

 

We’re working with a group of charities and funders: 

Logo Board - Learning Review

 

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