Elin Lindstrom and Cian Murphy outline our research on what charities think makes the model grant-maker and how the process can be improved for all involved.
3. Funding in the current economic climate
Voluntary sector
estimated to lose
Levels of giving £3.3 billion in public
have not fully funding from
recovered from 2010/11 to 2015/16
10% drop during
the recession
Increased demand
on many charities’
services as public
spending is cut
Source: What the research tells us about cuts, NCVO, http://www.ncvo-vol.org.uk/policy-
research/cuts/what-research-tells-us 3
4. Most public funding cuts are yet to come
Source: NCVO estimates based on Office for Budget Responsibility (2011) Economic and fiscal
outlook supplementary tables 4
5. Regular giving has levelled off
Envelope/tin
Direct debit
55%
29%
Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11
“If yes, have you given to a collection tin/envelope through the door or by standing order/direct debit or via a membership
subscription?”
Base: 1,000 adults 16+, Britain.
Source: Charity Awareness Monitor, Sep 11, nfpSynergy 5
7. So, what is the way forward?
Broadening sources of New partnerships
funding
7
8. Trusts income is still growing in the
recession
Individuals 14.3
Statutory services 13.9
Voluntary sector 1.3 2.1
Income from
Investments 2.4
grants
Private sector 1.6
0.6
Trading subsidaries
National lottery 0.5
Source: NCVO, What is the voluntary sector’s total income and expenditure?, http://data.ncvo-
vol.org.uk/almanac/voluntary-sector/finance-the-big-picture/what-is-the-voluntary-sectors-total-income-and-expenditure/ 8
9. Trust-fundraising sees quick rewards with
high return
Source: Gimme, gimme, gimme – A guide to fundraising for small organisations, 2011 9
11. Introduction
• The aim of the project was to find out what the ideal
grant-maker looked like from charities’ perspectives
• We did three types of research: a survey, telephone
interviews and an open forum
• Output
o Report: Taking nothing for granted
o PowerPoint presentation with detailed research results
12. Putting the Improvements
grants where Making grants to the Summarising
they’re needed go the furthest application the win-win
process
13. Small charities rely the most on trusts
income
Mean income from grant-making trusts
£978,000
Proportion of the largest
charities’ total income that
is from grant-making trusts:
2%
Proportion of the
smallest charities’ total £452,000
income that is from
grant-making trusts:
£283,000
33%
£82,000
Charities with less than 500k £501k - £2.5m £2.51m - £15m Charities with more than
total income £15.1m total income
Q14: “What is your approximate total income from grant-making trusts (in the last 12 months)?”
Base: 300 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 14
14. Larger charities outperform smaller ones
All respondents The largest The smallest
charities charities
Average grant income £411,000 £978,000 £82,000
Average costs (salary £41,600 £86,600 £13,800
plus non-salary)
Return on investment 9.9 11.3 5.9
Q14: “How many full-time staff (FTE) are devoted to grant-making trusts?”
Base: 279-307 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 18
15. The story so far......
• Smaller charities much more dependent on grant-making
trusts
• But smaller charities have the lowest return on
investment
• Potential win-win to make sure grants reach those who
need them the most?
16. Putting the Improvements
grants where Making grants to the Summarising
they’re needed go the furthest application the win-win
process
17. Charities are willing to accept lower grants
in exchange for income being unrestricted
All respondents
£100k 18%
£200k 3%
£300k 5%
The average lower amount accepted
for an unrestricted grant was
£400k 3% £630,000
£500k 15%
£600k 4%
£700k 8%
£800k 11%
£900k 7%
£1 million - same as the original grant 28%
Q5: “Imagine a grant-making trust had just offered you £1 million as a grant for a restricted project. They then offer to give
you a grant which you can spend on any of your work but for a lower amount than £1 million. What is the smallest sum you
would accept in place of the £1 million restrictive grant? (please select one option only)”
Base: 393 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 21
18. But larger charities are far less
concerned about getting core funding
£1 million - same as the original grant £700k - £900k £400k - £600k £100k - £300k
47%
41%
31%
29%
27% 26%
25% 24% 24%
23% 23%
18% 18%
17%
13% 13%
Charities with less than 500k £501k - £2.5m £2.51m - £15m Charities with more than
total income £15.1m total income
Q5: “Imagine a grant-making trust had just offered you £1 million as a grant for a restricted project. They then offer to give
you a grant which you can spend on any of your work but for a lower amount than £1 million. What is the smallest sum you
would accept in place of the £1 million restrictive grant? (please select one option only)”
Base: 393 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 22
19. Arts charities are eager for core funding,
while medical charities are least concerned
£1 million £700k - £900k £400k - £600k £100k - £300k
45%
35% 35%
33% 33% 33%
26%
25% 24%
23%
21%22% 22% 22%
19% 18% 18% 18%
11%
Medical/ Health/ Overseas aid/ Famine Disability Arts/Culture/ Environment/
Sickness relief Heritage Conservation
Q5: “Imagine a grant-making trust had just offered you £1 million as a grant for a restricted project. They then offer to give
you a grant which you can spend on any of your work but for a lower amount than £1 million. What is the smallest sum you
would accept in place of the £1 million restrictive grant? (please select one option only)”
Base: 393 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 23
20. Different perspectives on unrestricted
funds
“This is too hypothetical a
question, as it entirely depends “Our clients need reliable and regular
what the restricted project is - if on-going support, they often tell us
it is of strategic importance then that it is far more valuable to them
£1m restricted is as useful as than short-term projects. This means
£1m unrestricted.” that unrestricted funding - funding
that we could use to sustain and
improve these core services - is hugely
“I don't understand the question. valuable to us.”
Why wouldn't we accept the
larger grant with the restriction?”
Q6: “Imagine a grant-making trust had just offered you £1 million as a grant for a restricted project. They then offer to give
you a grant which you can spend on any of your work but for a lower amount than £1 million. What is the smallest sum you
would accept in place of the £1 million restrictive grant? (please select one option only)”
Base: 166 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 24
21. 93% of respondents were keen for more
unrestricted funds to be offered
Strongly disagree Disagree Not sure Agree Strongly agree
I would like grant-makers to
give better feedback on -1% 32% 65%
applications
I would like grant-makers to
provide more funds that were -2%
29% 64%
unrestricted or grants for core -1%
costs
I think it would be/is very
helpful when grant-making
trusts allow multiple -8% 46% 28%
applications for different -1%
projects from the same
organisation
-100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100%
Q7: “Please indicate how strongly you agree or disagree with the following statements by ticking the appropriate box”
Base: 414-417 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 25
22. The story so far......
• Smaller charities much more dependent on grant-making
trusts
• But smaller charities have the lowest return on
investment
• Potential win-win to make sure grants reach those who
need them the most?
• Unrestricted is worth more than restricted for many
organisations
• And particularly for smaller organisations and those from
certain sectors
• Charities think they can make grant-makers money go
further if it is unrestricted – potential win-win
23. Putting the Improvements
grants where Making grants to the Summarising
they’re needed go the furthest application the win-win
process
Grant-makers Charities
24. Charities want a mix of restrictions and
flexibility in guidelines
All respondents
Very clear restrictions 12%
“Trusts that give very vague guidelines about their
priorities and receive lots of applications and then
reject most of them are annoying and a waste of
everyone's time.”
Quite clear restrictions with
11%
only very limited flexibility
Some restrictions and some
59%
clear flexibility
Few restrictions and plenty of
12%
flexibility
No restrictions/complete
6%
flexibility
0% 20% 40% 60% 80% 100%
Q9: “What would your preferred approach be to the restrictiveness or openness of a grant-making approach?” NB the scale on
this slide is 100%, whereas it is 50% on most other slides.
Base: 413 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 28
26. The top priorities from the group exercise of
the Open Forum
Guidelines
and criteria:
clear, up to date,
searchable and links
to application format
Fund core
Contact costs, Feedback,
& building continuity in acknowledge
relationships funding applications
We asked the 60 fundraisers taking part in the Open Forum to divide into groups and write down ideas for improvements in
fundraising from grant-making trusts. We then asked them to rank their suggestions according to how important they thought
they were.
Base: 60 fundraisers, 27 March 2012
Source: Open Forum on fundraising from grant-making trusts, nfpSynergy 31
27. Top 5 reasons charitable trusts are seen as role
models
1. Clear guidelines
2. Easy, fast application processes
3. and 4. Good communications and
relationship building
5. Helpful, providing guidance
Q15: “Which charitable trusts do you think should be role models for others and why?” NB Please refer to verbatim document
for full comments.
Base: 198 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 32
28. Putting the Improvements
grants where Making grants to the Summarising
they’re needed go the furthest application the win-win
process
Grant-makers Charities
29. Success rates for the sector as a whole could
be improved
The average charity
makes 166 applications a
year, a success rate of
41 24.7%
Average number of
125 unsuccessful
applications
Average number of
successful
applications
Q14: “How many grant applications would you say you make a year? (approximately)” and Q14: “How many applications
would you say were successful in a year? (approximately)”
Base: 289 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 34
30. Different sectors have different success
rates
Average number of grant applications per year Average number of successful grant applications per year
300
Medical/ Health /
Sickness had one of the 258
lowest success rates:
21% Overseas aid and
Famine relief had one
of the highest success
rates: 46%
110 116
71
55 54
38
30
12
Arts Culture Heritage Disability Environment Medical Health Overseas aid Famine
Conservation Sickness relief
Q14: “How many grant applications would you say you make a year? (approximately)” and Q14: “How many applications
would you say were successful in a year? (approximately)”
Base: 289 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 35
31. While larger charities have a much
higher success rate
Average number of grant applications per year Average number of successful applications per year
296
Success rate for the largest charities: 31%
264
Success rate for the
smallest charities:
19%
88 93
60 55
24
11
Charities with less than 500k £501k - £2.5m £2.51m - £15m Charities with more than
total income £15.1m total income
Q14: “How many grant applications would you say you make a year? (approximately)” and Q14: “How many applications
would you say were successful in a year? (approximately)”
Base: 289 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 36
32. Professional fundraisers are crucial to the
success of big charities
Mean number of successful applications per year
109
37
18
7
No FTE staff working with <1 1 (1-1.49) More than 2 FTE staff working
grant fundraising on trust fundraising
Q14: “How many applications would you say were successful in a year? (approximately)”
Base: 292 not-for-profit sector workers, Jan-Mar 2012
Source: Fundraising from charitable trusts in 2012, nfpSynergy 37
33. How charities can reduce the number of
unsuccessful applications
Tailor applications Avoid straying Consider collaborating
to the trust outside of guidelines with other charities
38
34. What’s happening next?
Find ways to
See relationship improve working
Interviews with
from trust point relationship
grant-makers
of view between charities
& trusts
Timescale
June – August Interviews with GMTs
September – October Writing up of research and report
39
35. The story so far......
• Smaller charities much more dependent on grant-making trusts
• But smaller charities have the lowest return on investment
• Potential win-win to make sure grants reach those who need them the
most?
• Unrestricted is worth more than restricted for many organisations
• And particularly for smaller organisations and those from certain sectors
• Charities think they can make grant-makers money go further if it is
unrestricted – potential win-win
• Huge number of applications made, with quite low
success rates
• Small charities struggle to get through and have a
particularly low success rate
• Win-win to cut number of hopeless applications:
clear, accessible and up to date criteria and guidelines
36. Putting the Improvements
grants where Making grants to the Summarising
they’re needed go the furthest application the win-win
process
37. What might a win-win for charities and
grant-makers look like?
In tough economic times
Less wasting of
Putting funds
More unrestricted time and resources
where they’re
and core funds on ineligible
most needed
applications
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40. www.nfpsynergy.
net
2-6 Tenter Ground
Spitalfields
London E1 7NH
020 7426 8888
insight@nfpsynergy.net
www.twitter.com/nfpsynergy
www.linkedin.com/company/nfpsynergy
Registered office: 2-6 Tenter Ground Spitalfields London E1 7NH. Registered in England No. 04387900. VAT Registration 839 8186 72
Notas do Editor
Why should we care about fundraising from grant-making trusts now?
In the current economic climate, many charities are having to find new sources of income Public funding to voluntary organisations estimated to be cut by £3.3 billion Public sector spending cut by an estimated £20 billion from 2010/11 to 2015/16 (NCVO) Giving to charities still hasn’t fully recovered from drop in giving during the recession (2008/09)
I was thinking that we could talk about ways forward for charities in this section, including finding new sources of funding, and new partnerships. And then say that the form and shape of partnerships and other sources of funding becomes more important as public funds are withdrawn (and then go on to grant-making trusts as a case study).
With these changes, the form and shape of other sources of funding, and of new partnerships, become more importantNew sources of fundingSome signs that grant-making trusts might become more important sources of funding. Together with National Lottery, it was the only funding source that actually increased with more than 10% during the recession (from 2008/09 to 2009/10) (NCVO http://data.ncvo-vol.org.uk/almanac/voluntary-sector/finance-the-big-picture/what-are-the-sectors-different-sources-and-types-of-income/)Many grant-makers have been reluctant to fund services that were considered the public sector’s responsibility. Will this have to change?New partnerships- One way forward might be more partnerships, be it with corporate partners or with charitable trusts. But what does a good partnership look like from the charity’s point of view?
The two largest sources of income less secure with recession Individual giving to charities still hasn’t fully recovered from drop in giving during the recession (2008/09) Public funding to voluntary organisations estimated to be cut by £3.3 billion And many charities are experiencing increasing demand as public services are being cut So charities are facing a challenge in finding new sources of income and perhaps new ways of working in partnership with others
Timescales v. Return on investment – Just an estimate!“These ROI are how much a charity might get back for every £1 it spends including stafftime. They are based on a mixture of nfpSynergy data, industry wisdom, and best estimates. ROI varieshugely between organisations for a whole variety of reasons. Treat them as a guide not atablet of stone.”
Now turn to case study, our recent research on fundraising from grant-making trusts Raises questions about developing other sources of funding, and also about what form these funds take, and what a good working relationship between grant-makers and charities looks like
Explain the projectWay of charities to feedback – honestly and anonymously – to grant-makers. Difficult otherwise, as many are afraid to annoy grant-makers.Interesting to hear about your experiences, whether you have any comments, so please interrupt.
First win-win: how can we make sure that grant-makers money is available to the charities that need it the most? Funds are limited, and it is more urgent now than ever to make the most of the funds that exist.
- Challenge for grant-makers and smaller charities
Comments, questions?
First win-win: how can we make grant-makers money work the hardest for the frontline beneficiaries? Funds are limited, and it is more urgent now than ever to make the most of the funds that existClear message from charities: more core and unrestricted funding would mean they can be more efficient!
On average, charities were willing to lose 370k, more than a third, to get unrestricted fundsSubstantial part of charities were not at all willing to trade down the size of grant – 28%But almost a fifth, 18%, said they were willing to take just 100k if they go do whatever they wanted with the money. That such a large part of charities were willing to lose out 9/10ths says a lot about the need for this type of funds
Not all types of charities were equally willing to prioritise unrestricted funds over the size of the grantLargest charities most likely to say they will keep the original £1M Whereas the smallest charities were the ones willing to trade down the most in order to get unrestricted fundsThis really says something about what other options charities of different sizes have – larger charities might have other sources of income and reserves allowing them to take restricted money But smaller charities might not be in this position. Thinking back to how reliant the smallest charities are on this source of funding, it makes sense that the shape and form it takes is so important to the smallest.
Health charities most likely to prioritise size of grant (left)Arts/culture/ heritage most likely to prioritise unrestricted grantNote: we had few respondents for some of these sectors, like Arts
Although not all charities were willing to trade down the size of a grant in order for it to be unrestricted, there was almost total agreement that they would like more unrestricted and core funding. 93% of charities taking part in the survey agreed or strongly agreed, making it the second most agreed with statement.
Comments, questions?
Area where there is plenty of room for improvement – both from grant-makers’ and charities’ side.
Goal has to be to save time and resources of both trusts and charities by reducing the number of applications that are clearly ineligibleWhat the charities said: Clear, honest criteria that mirror what is actually funded Easily available online Up to date criteria Little more annoying than spending time on an application, only to later find out that the funding stream had run out for the year ‘General charitable purposes’, when in reality they fund a certain sector: “Be clear about what you will and won’t fund – don’t say ‘everyone is welcome to apply’ when in practice you only fund cricket clubs in Devon.”
Interviews: One person told of sending off an application during their first week of a new job. 18 months later, in the last week of the job, they received a rejection. Research shows that charities’ ideal time to wait is somewhere closer to 2.2 months. Not efficient for anyone! Planning becomes difficult, especially if the charity needs to coordinate funding from different sources. Aggravated by general lack of feedback – many never even know if their application has been received.
Big difference between what charities want and the reality in this case 99% wanting less than 3 months waitIn our interviews, one person told us they had sent off an application in the first week at a new job, and only received a response as the person was leaving 18 months laterAggravated by a general lack of feedback/ response – very tricky situation for a charity that might receive funding for part of a project, but have to put it on hold as they wait to hear from other grant-makers
Similar to the other slides – but a theme that came out strongly in the rest of the research too: feedbackUnderstand this is difficult for grant-makers, just think of giving feedback on job applications. But could help reduce the number of hopeless applications:“There are generally three reasons: 1. they haven’t enough money – tell us and we’ll apply another time. 2. they don’t like the project – tell us that and we’ll find another project. 3. they don’t like the organisation – tell us and we won’t waste our time applying to you again.”
We asked charities what makes a grant-maker stand out as a role model. The results very much summarises what the charities said they find important throughout the survey. Most of these relate to application process, and hint at way of knowing beforehand whether the charity stands a chance.1. Clear guidelines and guidance (26%): . ‘Any that provide clear guidelines, are willing to build a relationship either for the long term or simply the length of the grant.’2. Simple/ Clear applications (19%) Those which have concise, fast application processes.’3. Communication (13%): ‘Trusts that speak to the charities and help with the application process. Those that have good means of communication, encourage questions and exploration of relationship building.’4. Engaged, interested, relationship (13%)5. Helpful, guidance, advice (13%): ‘More generally, trusts who will take initial phone calls if unsure, will work with applicants to develop the strongest proposals.’Also asked what it is that charities think that grant-makers could do better, and the results closely mirror these. Charities want better guidelines, more contact and better communications (and, not included here, more and better feedback!)
Use any of the points from this summary slide (have cut out most of the actual slides)
Where the money goes to – making it accessible to the smaller charities that rely on it the most. Try to overcome their lower success rate and lower ROI. Making grant-makers money go the furthest: charities think this means more unrestricted and core funds. Cut down the number of hopeless applications – room for improvement for both charities and trusts.