What does the model grant-maker look like?
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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.
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What does the model grant-maker look like?
- 1. Fundraising from grant- making trusts Finding the win-win for charities and grant-makers Cian Murphy and Elin Lindstrom, July 2012
- 2. Securing funding in tough times 2
- 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
- 6. Finding new sources of funding 6
- 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
- 10. Finding the win-win for charities and grant-makers 10
- 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
- 25. Waiting for a decision 29
- 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
- 38. FOR MORE INFORMATION... http://nfpsynergy.net/free-reports-and-presentations 43
- 39. 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
- 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 del 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.