The three changes in grant-making to watch for in the next year
by Alex Blake
Many of the large grant-making trusts in the UK have responded to the COVID-19 crisis by being more flexible and responsive, in line with the London Funders statement, which has been signed by around 400 funders. Many have been open to offering core funding (some for the first time) and application processes have become simpler and quicker. On the downside, funding has been short term, most grants have been small and funds have closed without notice due to the scale of applications received.
While we all hope that the positive changes in grant-making practice will stay and the negative issues can be addressed, it is unclear what the next year will look like for grant-seekers and grant-givers.
There is significant uncertainty over what comes next, which is stressful but it is hardly new for fundraisers and charity leaders. We are often left guessing what funders are really looking to achieve with their grants, what they mean by some of those application questions and whether funding will be renewed at the end of each grant period.
The pandemic has given funders a taste of this uncertainty as they realise that there is no guarantee what can be achieved with their funding when it is unrealistic to expect applicants to give detailed plans of activity and spending for the next year. As Ben Cairns at IVAR says so eloquently ‘Covid has exposed the fallacy of certainty’. Funders have realised that they need to support and trust charities to get on with doing what they need to for their communities and for their survival. IVAR’s latest briefing paper from their Evaluation Roundtable Community of Practice sessions with 20 funders found that there is a real appetite and enthusiasm for maintaining recent adaptations, in particular: simpler, more flexible processes; more delegation; greater trust and openness.
In a recent interview with the LSE’s Marshall Institute, Sonal Sachdev Patel, CEO of the GMSP Foundation, asks:
“Why was it that we (foundations) were able to give money out so quickly now and historically we haven’t been? Why are we slow? Is it for our benefit? Is it because we think that we will have greater impact? … When we ask for short term impact reports and metrics, is it because that’s going to contribute to greater change or is it because that gives us comfort in the way that we do our philanthropy?”
It may be foolhardy to make predictions when we find ourselves in a second wave of the pandemic and no one knows when this will end, but here goes.
Three predictions for trust fundraising in 2021:
1. More funders will narrow their strategic focus
As Government restrictions on mixing continue and the economy suffers, we can expect the impact on income from trading, events and community fundraising to continue. At the same time, we will see a loss of EU funding due to Brexit, which will impact charities in some sectors. Competition for grant funding was already intense before the pandemic and has been even higher since, as we have seen in the inundated emergency grant funding programmes.
Funders will inevitably look for ways to manage this increase in demand, which is why I think we will see more funders narrowing their strategic focus to support specific issues or demographics.
What can you do in response?
Ensure that you fully understand the funders’ priorities and eligibility criteria. If you don’t fit, don’t apply. When funders narrow their focus, you should do the same and be targeted with your applications. You are better off spending more time on the applications where you are a good fit for the funder, than trying to fit a square peg in a round hole.
2. Impactful learning will trump impact measurement
For years, there has been a lot of debate around how charities demonstrate the difference they make and what funders ask of them in this regard. Having been forced to develop theories of change and outcomes/impact frameworks, there has recently been an increasing shift from larger funders toward a more relational, trust-based approach to assessing charities’ impact and making decisions on their funding. This has included the National Lottery Community Fund (see changes to Reaching Communities in the last couple of years) and large trusts such as Esmée Fairbairn Foundation .
However, Emma Beeston made a good point at our last webinar that it depends on the type of foundation and their trustees as those from business backgrounds who are looking at environmental, social and governance (ESG) investing, will be much more likely to be wedded to ideas about scientific evidence-based approaches to measuring social impact.
Funders are always going to want to try to understand the impact of their funding just as charities want to understand how they can best support their beneficiaries. There will always be questions around the difference you want to make (which may use the language of outcomes and impact) and your approach to evaluation, but I predict that funders will increasingly accept that learning is more important than measuring.
What can you do in response?
Charity leaders often say they want funders to ‘trust us, we know what we’re doing’ and more funders have done this in response to the pandemic when it comes to emergency funding. As we move to longer term funding, that trust needs to be earned. Ways to gain trust can include your track record, a clear set of accounts, good governance and evidence of learning and improving.
Assuming you have the basics of finance, governance and track record in place, then review your charity’s approach to evaluation. What data (qualitative as well as quantitative) are you collecting and what does it tell you? How do you use this data to learn? What are you learning and how is that improving the way that you work in meeting your charitable objectives?
Answering questions like this will give funders more confidence in your organisation than being able to say x percentage of beneficiaries agreed that your service made a positive difference.
3. Funders will expect more and better engagement with beneficiaries
Another hotly debated topic in the grant-making sector recently has been equity and inclusion. This has focussed both on how funders make decisions and who they fund, as well as how charities involve the communities they serve in their decision making.
A recent report on power and trust from the Grant Givers Movement finds that ‘Communities hold power in the knowledge, networks, people and assets they hold. Yet, it is widely recognised that philanthropy is not representative of the communities it seeks to serve.’
It remains to be seen to what extent foundations might pursue models of participatory grant-making by involving people with lived experience in their processes, but I think it is clear that funders will continue to ask how you engage with the people you support.
What can you do in response?
Following the impact of the pandemic on people’s lives, it is even more important to be specific about what you have learned from engaging with your beneficiaries and how you are meeting their needs in new ways.
It is the individual stories of the people you support and their feedback that gives the richest and most up to date information on what challenges they currently face. Gathering this information and analysing it in your organisation, with input from front-line and senior staff, enables you to continuously improve services to best meet the needs of your beneficiaries. It also creates a culture of learning and insight based on the experiences of your community.
To be effective in a complex world of uncertainty, you need a culture of learning and continuous improvement, with meaningful beneficiary involvement throughout the process, for example, continually consulting with beneficiaries to understand changing needs and whether your activities are making a difference so that you can adapt if required.
Having the voice of your community in your case for support is vital to successful funding applications.
How prepared are you for trust fundraising in 2021?
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