The Masonic Charitable Foundation launched a new grant programme offering core grants to small charities – March 2019.

The Masonic Charitable Foundation (MCF) now offers small charities multi-year funding for running costs and other core funding expenses. The new grants are a maximum of £5,000 per year over three years and are available to charities with an income of £500,000 a year or less.

MCF said it recognised that smaller charities face difficulties because of a lack of core funding and reacted with this policy shift on grant-making. They plan to share learning within the sector about the effectiveness of the new multi-year grants.

This is a great step forward for MCF and another positive sign in the core funding landscape, although my reservation with this programme is that £5,000 just isn’t enough to make a difference to the funding mix of small charities with expenditure of several hundred thousand pounds. MCF give a total of circa £6 million each year and restricted grants are often in the region of £20-30,000 per year, so I would love to see them give more and larger unrestricted grants.

360Giving Data Visualisation

In December 2018, Suraj Vadgama (Product Lead at CAST) shared three things that stand out from his data visualisation to explore themes in grant funding (with core funding as a key theme). The visualisation itself uses data published in the 360Giving open data format via the GrantNav search engine. It presents this data in clusters of circles, where each individual circle represents a grant, with its size being relative to the amount awarded and the colour denoting a specific funder.

The three learning points were:

1. How different funders compare: Looking at 2013-18, Esmée Fairbairn Foundation appears to have given the most core funding. However, looking at the breakdown by year it becomes apparent the overall amount of core funding (at least from those funders publishing to 360Giving) has remained reasonably consistent.

2. Changing faces: What does appear to have changed, is which funders are providing core funding. Looking at 2017/18 in particular we start seeing lots of grants from Garfield Weston Foundation, as well as a number of small grants from a variety of community foundations – which is great to see!

3. What it doesn’t tell us: Lastly, it’s important to recognise the limitations of such a visualisation. Most obviously the sample is limited to data from the funders available via GrantNav, and specifically those who have used the keywords ‘core costs’ to describe a grant. Also, the visualisation doesn’t tell us to what extent the sector is seeking core funding. It only shows who has been awarded core funding, so does not evidence the huge demand for this type of funding.

‘Core funding is the answer - whatever the research question’ was the title of the article written in response, by Ben Cairns, Director of IVAR, who reflected on how little things had changed over the past decade in relation to core funding, despite numerous reports on the topic and the positive actions of a small number of large funders.

Suraj Vadgama’s report led to the Esmee Fairbairn Foundation’s (EFF) new report, ‘Insights on core funding’ in March 2019. EFF has offered core funding since it was established in 1961 and now 64% of active grants (£92.7m) give core or unrestricted support (43% and 22% respectively). The report is based on 628 learning conversations between grants managers and charities at the end of grants. Their key learning points were:

• Core grants and project grants are similarly effective when it comes to achieving the outcomes described in applications.

• Unrestricted grants leverage more money (14%, compared to 9% for grants restricted to core costs and 2% restricted to projects).

• Core funding gives charities the flexibility to develop and improve their work by testing new ways of working and learning.

• The most negative feedback received was about funding commitments not being long enough - even a three year core costs grant only gives organisations an 18 month respite from fundraising. five years of support could genuinely free organisations up to concentrate on impact.

• Despite making a policy decision to do it, they haven’t increased the number of unrestricted grants they make. The reasons they give for putting restrictions around our core costs funding are mostly of their own choosing.

• Core funding helps charities piece together the complex jigsaw of grants and restrictions from others. Where a grant achieves its outcomes, that is because of the work of a whole organisation, and by extension the whole funding model of the organisation, and cannot be attributed to the single grant of a donor.

There is some further detail on this in the report and although there are not going to be any great surprises in there for charities, it is very helpful to have a large, strategic and well-respected funder providing evidence-based reports on the benefits of giving unrestricted and core grants.

EFF will be continuing this work in developing their new strategy, starting in 2020, and are asking organisations:

1. What more could funders do to help you evolve and improve?

2. What might the effect be of funders seeing themselves more as part of your funding mix?

3. What could funders do to increase the amount of core funding out there?

To share your thoughts with EFF, you can contact Gina Crane on communications@esmeefairbairn.org.uk

At KEDA Consulting, we believe passionately that charities deserve to receive the funding they need to deliver their strategic plan, which is why core/unrestricted funding is so important. We also sympathise with funders who have to make difficult decisions about how they distribute their funding with so many pressing needs, important causes and great charities. This is why we work with charities to ensure they can show funders why they can be trusted to make best use of unrestricted funds – this is where a strong case for support is vital, alongside strong organisational attributes such as sound finance and governance measures. If you would like to increase your core funding, contact the team on hello@kedaconsulting.co.uk .