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Are you ready to apply for core funding?

Core funding is a bit of a holy grail – highly valued and very hard to come by. At IVAR, we’ve spent quite a bit of time talking to funders who give it and organisations who receive it. Read on for suggestions about how you can make the case for core funding and ensure your organisation is ready to make the most of it.


There is no single prescription; the terms core costs, operating costs and central costs are often used interchangeably within the sector. They describe essential running costs: including support costs; income generation and governance activities. Some funders also provide unrestricted funding or strategic grants which as less restricted that project funding. The important thing is to make sure you and your funders have a shared understanding of what it means from the outset.


How would you use core funding?


Core funding provides voluntary organisations with an opportunity – and the resources – to think, plan, test new things, improve services or just ensure a bit of security. Some organisations use their funding to support strong back office functions like finance, IT and human resources, all of which ensure the organisation is as effective as it can be in achieving its mission. Other organisations use core funding to develop or do some strategic thinking. They might undertake some research, design and test new approaches to improve their performance or adapt in times of rapid change. These sorts of activities are unlikely to happen without the space and time away from service delivery that core funding provides.

Organisations have told us that core or unrestricted funding has helped them to:


  • Become more confident

  • Engage in statutory consultations and service redesign

  • Develop strategic relationships that have led to further funding

  • Expand services into new areas

  • Establish new partnerships

‘We have more confidence now to be at the decision-making table with strategic partners. I feel like we are operating at a better, more strategic level locally and that is new – [we’re] really raising our profile in the local community.’


‘We are moving towards feeling an important part of the local infrastructure – I think part of this is us having greater confidence that we have value’


Make it easy for funders to say yes


Making a difference to beneficiaries


Funders obviously want to know that their money is making the most difference to beneficiaries as possible. Sometimes it can be tricky to demonstrate this sort of change/impact from a core funding grant, especially if you’re spending the money on research or strategic development. However, in our experience core funding used for this type of work can lead to some far reaching changes which do ultimately benefit communities and even strengthen whole sectors. Demonstrating how you align with a funder’s objectives or their thematic areas of focus (e.g. young people) should help you make the case.


Making a step-change


Funders often want to see a ‘step change’ in the way services are delivered, so it’s important to demonstrate that you’ve got the vision and ambition as well as the skills to follow through. Make sure you have a business plan to outline this. Be flexible – most funders don’t mind if plans change or adapt, as long as you can show why a change is the best course of action.


Leadership, leadership, leadership


Funders will be looking for strong leadership to ride the tide of organisational change. If they’re looking to strengthen your sector, they might look specifically for organisations who are well networked and already play a leadership or coordination role, and can deliver goals that they share.

Organisational readiness


We’ve found that organisations embarking on any kind of change often face a number of challenges which, again, appear to centre around leadership. Grantees have told us that as their organisations changed, so did their governance requirements. They needed new experience and skills to help them made big decisions such as buying a new property, merger, making changes to a funding model or seeking new partners. Making sure you have good support in place, including a strong board of trustees and knowing when and where you can access some professional development or mentoring support will help ensure your organisation is ready for core funding.

Ultimately, the organisations that are able to make the most of their core funding have been led by committed, passionate individuals with clear visions for their organisations and an understanding of how to manage strategic change. As one organisation told us:


‘overall this is about improving the quality and quantity of our services’

Strategies for survival

At a recent Roundtable discussion for CEOs of voluntary organisations, Arvinda Gohil, CEO of Community Links, discussed her organisation’s recent partnership with Catch22.



Those present shared the challenges at the forefront of their minds:
  • Pressure/squeeze on time, space for planning and asking big questions about the organisation’s future. For example, when and whether to look at merger; and ‘lack of opportunities to have open discussions about challenges’
  • Lack of long-term funding; constant pressure to diversify/reinvent. Basically ‘having to find different ways of meeting the same objectives’, but paucity of alternative funding sources: ‘a drying up of funds; very difficult to find the equivalent elsewhere’
  • Competitive funding environment makes it difficult to judge what/when to share with others
  • Many organisations have no idea what their true financial situation is’
  • ‘The pace and scale of change makes it so difficult to plan or predict when everything is so uncertain’
Attendees acknowledged that it is difficult to find people who will tell you what to avoid, and very unusual to have ‘this kind of forum’ for discussion. They hoped to have an open conversation about the above challenges.


Key messages for organisations who find themselves in crisis



  • ‘Bumping along from crisis to crisis isn’t sustainable long-term’
  • ‘Comprehensive reviews of your organisation have to start with the finances: is there enough transparency, depth and credibility?’
  • ‘You need cash to downsize and then more cash to re-size’
  • ‘What should matter most is the preservation of the work, not saving the organisation. And if the work is still needed, your job is to find a way of delivering it. But there is no room for sentiment – with the organisation or with people.’
  • ‘In looking for a partner [as a means of keeping the work going], the key question is: what do we each bring and what can we each get out of it?’
  • ‘A crisis can be an opportunity: to focus your mind on what really matters [the work, not the organisation]; and to focus funders’ minds on what their priorities are’
  • ‘Questions about merger or other partnerships should be asked routinely: what is the most appropriate and stable vehicle for delivering our charitable objects and delivering our work – that is what should matter most’
  • ‘If you enter into a formal partnership with another organisation, you need to understand that it’s never going to be the same again. Change is unavoidable.’
  • You can cut things here and there – salami slicing – but at some point, you have to re-structure the organisation that sits at the centre
  • Advice when looking for a partner to work with:
    • Ask for serious technical advice from people who are experienced
    • Get to know the organisation informally – CEO to CEO and Chair to Chair
    • Sit down with the head of the organisation you are looking to work with and consider what the future could look like with that person
    • Carry out due diligence in both directions
    • Shop around


Messages for Funders



  1. Rethink Diversification: routine exhortations to diversify income and be ‘more sustainable’ are at odds with realities of the funding environment: competitive; limited opportunities; tendency towards short-term, non-renewable.
  2. Rethink Continuation: ‘if you still get value from your investment, why end it?’
  3. Invest in New Partnership Models: ‘fund a trial of shared services across a group of organisations in the same field/geography; share and promote the lessons to reassure and inspire others’
  4. Supporting Peer Exchange: create space for leaders to think and reflect together, and look at different options and approaches for keeping their work going; as part of that, being proactive about creating linkages between grantees.