1. UK Institutional Funding Potential
or
How to make more out of less…
Lysa Ralph, Head of Programme Funding

2. What we will cover…
> Definitions, purpose, methodology
> Key trends, academic discourse
> Results and benchmarking
> Findings from external consultations
> Recommendations
> Questions & sharing your approach

3. Definitions
> Institutional Funding (IF) = funding from
governmental donors and those with similar
behaviour and requirements e.g. Comic
Relief and Big Lottery Fund
> Grants and contracts, UK (central, devolved &
local government) and European Commission

4. Purpose: terms of reference
> Establish the size of the Institutional Funding
market and the British Red Cross’ position
> Learn from our own and others’ success and
failure
> Identify best practice in the sector
> Identify routes in, trends, risks and
opportunities towards diversification and growth
of IF income

5. Methodology
1. Desktop benchmarking, 41 charities, selected as
comparators, within top 50 income
> Together, they accounted for 13% (£1.5bn) of the
£11.9bn public funding to charities 2010
> Income 2006-2011 analysed
> Divided into three groups: mainly IF, mainly
‘other’, equal mixture of funding
2. Qualitative surveys with nine organisations
3. Internal consultations

6. Trends and academic discourse
> Shift away from grants to contracts:
> 2001 grants worth £4.6 billion, contracts £3.8 billion
> By 2008, grants worth £3.7 billion, £9.1 billion worth of
contracts
> Development of full cost recovery principles to account
for ‘hidden’ costs
> Increase in ‘payment by results’; Social Return on
Investment / Social Impact Bonds
> Polarisation of the sector, consortia development
> Need to evidence outcomes / impact
> Increase in competition
> Over dependency on the state

7. Trends and discourse
> Variation in government: spending on health and education in
devolved gov’ts higher than England:
> Wales 8% reduction in revenue
> Scotland and Northern Ireland 7% (2011-15)
> Compares to UK central gov’t cuts of 19%, local authority cuts
26%
> Lottery has followed a totally different trajectory, ticket sales
highest ever in 2011, Olympics cash coming back in. Higher
spend in 2011, set to continue
> European Commission’s proposed budget for 2014-2020 is
€1,025 billion, a 5% increase on the last cycle

8. Topline results
> Despite the cuts, Institutional funding to charities increase of 4%
> Current UK government following trend since 2001, where state
funding to the voluntary sector far outpaced general growth in
government spending

9. Institutional Funding - Top 10 Charities
> ……………….………………….………no British Red Cross 

10. External surveys - participants
Grateful thanks to:
Action for Children, Alzheimer’s Society, Age UK,
Centrepoint, Mencap, National Trust, The Princess
Royal Trust for Carers (now the Carer’s Trust) , Scope
and University College London (UCL)
……………………………who took part in our survey

11. External survey: findings & recommendations
> Invest in programmatic infrastructures, build an
evidence base
> Value for money / SROI modelling
> Involvement of beneficiaries at all levels
> Develop a partnership culture and strong governance
> Hone your offer
> Added value, don’t forget those ‘in kind’ inputs

12. External survey: key findings
> Most comparators joined up Trusts & ‘Statutory’
> Join up between policy, advocacy and fundraising
> Engagement plans for Institutional donors
> Integrate funding with service planning, tactical
funding planning
> Select only the strongest fit programmes with
measurable changes for beneficiaries
> Clear roles and responsibilities between teams and
management of expectations

13. Other tips…
> Assessors / advice line: make friends, use their advice during
application development, ask questions
> Budgeting: NVCO’s historical ‘Compact’ with government on
full cost recovery– try & include match
> ‘Best practice?’: e.g. for Lottery £300k+ grants - ‘needy’
project, strong project design responding to need / experience /
partnerships
> Triumph and disaster: treat failures as a learning opportunity,
assessment reports , talking to others
> Programme cycle approach: invest in fundraiser’s skills /
knowledge in this area, spend time shadowing service
colleagues
> Balance: avoid over reliance on one source of funding

14. Narrative Objectively Means of Assumptions
Summary Verifiable Verification / /Risks
Indicators evidence
Goal =
Lottery
outcomes
Project aim Outcome
SMART
targets
Outcomes Outputs Lottery
planning
Activities Inputs Costs
Aim triangle
Logframe
Outcomes
Working out the
donor’s system Activities

15. Questions… sharing your approach??
Training courses
 BOND – project planning using a logical framework /
impact assessment etc
 Charities Evaluation Services – developing your own
indicators and outcomes
 Donor workshops …others?
Lysa Ralph
lralph@redcross.org.uk
020 7877 7094