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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.

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


 

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.

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

Stepping outside the normal – the Tudor Trust and small grants in Hartlepool

In June 2019, a team of Tudor Trust staff and trustees visited Hartlepool to test out a way of paring back bureaucracy and placing relationships and trust at the forefront of grant-making. Here’s why…

 

‘Too much caution can narrow the range of people and organisations funded and what that funding can achieve.’

In The possible, not the perfect, we described how funders supported community groups and charitable organisations working in response to three emergency events in 2017, and found that funders stepped outside their normal practices in a range of different ways – in particular, their approach to risk. We posed a challenge to funders – can such an approach only be adopted when there is a sense of moral imperative to suspend business as usual?

 

‘Every day in a community is an emergency. They don’t have to have a tragedy or emergency to give money that way.’

Many funders have agreed with the sentiment of this question, but they also share concerns about the challenges of lighter touch processes, including a view that they aren’t ‘effective’: ‘too much risk, too much uncertainty, too many unknowns’.

 

Tudor’s Trustees and grants staff have translated their freedom to act into less burdensome and more straightforward processes – especially appropriate for small community groups who can be disadvantaged by unnecessarily complex, risk-averse or lengthy grant-making processes. And they have confirmed that it is possible to adopt a lighter touch to due diligence. The story of Tudor’s work in Hartlepool suggests that this alternative notion of ‘effective’ grant-making has the potential to resonate beyond the confines of emergencies.

 

Christopher Graves (Tudor Trust) explains how:

“In June 2017, Tudor was one of many funders involved in the response to the Grenfell Tower fire. The response presented funders with a challenge: to get funding quickly to small, frontline organisations. We had to balance due diligence against speed of response. Operating outside our comfort zone, we had to act quickly and instinctively. We learnt a lot.

We asked ourselves how we could replicate aspects of this ‘on the ground’, quick, face-to-face approach to making small grants in a non-emergency situation. How would it feel to shorten our lead-in time for a grant, and work with community groups to create an application together through a conversation? Might this be a better way of engaging with the people and communities we want to work with?

We thought carefully about how this approach could be of benefit, and do no harm to the people, organisations and communities we wanted to work with. Taking into consideration the size of the sector, the organisations who could help us guide the work, the strength of infrastructure bodies, and the number of applications received and grants that Tudor has made in the past five years, we decided to focus on Hartlepool.

In the first half of 2019 we worked with organisations in the Tees Valley area to get to know Hartlepool, and to identify groups which might benefit from a small grant. In June, Tudor staff and trustees spent three days in Hartlepool, with an afternoon dedicated to meeting local groups. A trustee and a member of staff listened, and during a half hour conversation, with 20 groups, together drew up a funding request. In the few hours after the conversations, trustees and staff came together, reflected on the conversations, and approved grants of up to £5,000 for each group.”

 

There is much talk of funders becoming less burdensome, more straightforward and quicker in their dealings with applicants and grantees. For that to happen, funders need to be ruthlessly clear about the purpose and necessity of their processes. Tudor’s work in Hartlepool wasn’t rushed or haphazard – the preparation and execution were characterised by care, attention to detail and great sensitivity. But it was nimble and proportionate. And it sends a clear signal to others about what is possible when you are prepared to step outside the normal.


Read the full research report – The power of face-to-face grant-making: Small grants in Hartlepool.

Look out for IVAR’s Thinking about… risk framework, which will be published on Thursday. It also aims to encourage funders to step outside the normal through considering their position in relation to different elements of risk.

All funders owe it to the sector to continue to improve their thinking on continuation funding

Charities or community organisations receiving a grant will almost inevitably confront a dilemma.  At the point of receiving their grant, the funder will tell them that their funding is only for a time limited period, and that there is no guarantee of future funding beyond this point.  But what many charities want isn’t just a single grant for one, three or even five years, but some funding to try things out, and then more funding to keep their activities going and develop them further.

 

This creates a number of problems.  For example, charities often do not know until a few months before their grant ends whether their funder will continue to fund their work.  This makes staff retention and long term resource planning difficult.  They believe that they are more likely to get funding if they present their work as a new project, even if that’s not really what’s needed.  Replacing a grant often requires securing grants from multiple different funders – in a funding environment which is particularly challenging for small to medium sized charities and likely to continue to be so.

 

Brutally honest

There is a brilliant blog imagining how charities would answer questions from funders if they were being brutally honest, rather than telling funders what they think they want to hear.  In answer to the question about how the applicant plans to sustain their work after the grant ends, they say:

 

‘We will leave you alone and harass other people, continuing to spend half our time trying to convince other foundations that our programmes and communities are worth being supported, instead of running and improving the programmes that our communities desperately need. Then, after a year or so, when hopefully you forgot that we applied earlier, we’ll reapply to your foundation.’

 

Systemic failure

At its worst, this creates a systemic failure.  Statutory funders achieve ‘sustainability’ when independent foundations choose to pick up the activities which they used to fund.  Independent foundations achieve ‘sustainability’ when the statutory sector funds the charities which they’ve supported.  And charities are stuck on this carousel, writing and rewriting proposals rather than being able to plan for the long term and fulfil their mission.

 

No wonder that in IVAR’s report, Thinking about Sustainability, they challenge funders to be ‘prepared to consider continuation funding as a mark of development and success rather than a sign of dependency’.  Or as Dawn Austwick, Chief Executive of the National Lottery Community Fund, argued, ‘the flexibility of long term grant funding makes it particularly well suited to enabling the shift to high quality early action services. Making that long term commitment isn’t always easy for grant funders and often needs courage and an appetite for risk’.

 

So what can funders do differently?

As the UK’s largest grant maker, we’ve been making a number of changes to how we work:

 

Firstly, we have made our funding more flexible, including support for core costs and capacity building as well as project activities.  This means that from the start of a grant we can support organisations to think about how to develop and fund their activities for the long term.  Over the past few months, we’ve seen the average length of our grants increase, and increased the proportion of our funding which goes to smaller and medium sized charities and community groups.

 

Secondly, our funding staff are based in communities across the UK, so it is easier to build up relationships with outstanding charities and community groups and know more about how we can support them to fulfil their mission and enable communities to thrive.  That’s not just about money, sometimes offering the opportunity to work with other charities or share learning can be just as important.

 

Thirdly, we’ve introduced dedicated funding for partnerships. Organisations that have achieved longer term financial stability and have more capacity to think about how to develop their work will increasingly work together with others, rather than on their own. We expect this will increasingly mean that when people come to us to continue their work, they’ll want to tell us how they’ll collaborate with others in doing so.

 

Fourthly, we can now identify opportunities where our funding can be a time limited part of longer term growth plans, especially for social enterprises, or where charities can use our support to leverage funding from other sources. At the same time we recognise that this will be appropriate in specific situations rather than as a default assumption for all grants.

 

Lastly, while continuation funding is important and valuable, funders like us always need to be finding and supporting people with great ideas that we’ve never worked with before.  Maintaining a balanced approach including both continuation funding and becoming more open and accessible is crucial – especially as our sector and our communities continue to change and experience new kinds of challenges and opportunities.

Ben Cairns – Director for the Institute for Voluntary Action Research – responded to this blog with four questions for funders to ask themselves when considering continuation funding.