What does the model grant-maker look like?

Fundraising from grant-making trusts

Finding the win-win for charities and grant-makers

Cian Murphy and Elin Lindstrom, July 2012

Securing funding in tough times

2

3

Funding in the current economic climate

Source: What the research tells us about cuts, NCVO, http://www.ncvo-vol.org.uk/policy-research/cuts/what-research-tells-us

Voluntary sector estimated to lose £3.3 billion in public funding from 2010/11 to 2015/16

Increased demand on many charities’ services as public spending is cut

Levels of giving have not fully recovered from 10% drop during the recession

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

5Base: 1,000 adults 16+, Britain. Source: Charity Awareness Monitor, Sep 11, nfpSynergy

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

Envelope/tin

Direct debit

Regular giving has levelled off

“If yes, have you given to a collection tin/envelope through the door or by standing order/direct debit or via a membership subscription?”

Finding new sources of funding

6

7

So, what is the way forward?

Broadening sources of funding

New partnerships

8

Trusts income is still growing in the recession

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/

0.5

2.4

13.9

14.3

1.3

1.6

0.6

2.1

National lottery

Trading subsidaries

Private sector

Investments

Voluntary sector

Statutory services

Individuals

Income from grants

9

Trust-fundraising sees quick rewards with high return

Source: Gimme, gimme, gimme – A guide to fundraising for small organisations, 2011

Finding the win-win for charities and grant-makers

10

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

• Outputo Report: Taking nothing for grantedo PowerPoint presentation with detailed research

results

Putting the grants where

they’re needed

Making grants go

the furthest

Improvements to the

application process

Summarising the win-win

14

£82,000

£283,000

£452,000

£978,000

Charities with less than 500ktotal income

£501k - £2.5m £2.51m - £15m Charities with more than£15.1m total income

Mean income from grant-making trusts

Small charities rely the most on trusts income

Proportion of the smallest charities’ total income that is from grant-making trusts:33%

Proportion of the largest charities’ total income that is from grant-making trusts: 2%

Base: 300 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy

Q14: “What is your approximate total income from grant-making trusts (in the last 12 months)?”

18

All respondents The largest charities

The smallest charities

Average grant income

£411,000 £978,000

£82,000

Average costs (salary plus non-salary)

£41,600 £86,600

£13,800

Return on investment 9.9 11.3 5.9

Larger charities outperform smaller ones

Base: 279-307 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy

Q14: “How many full-time staff (FTE) are devoted to grant-making trusts?”

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?


they’re needed

Making grants go

the furthest

Improvements to the

application process


21

28%

7%

11%

8%

4%

15%

3%

5%

3%

18%

£1 million - same as the original grant

£900k

£800k

£700k

£600k

£500k

£400k

£300k

£200k

£100k

All respondents


Charities are willing to accept lower grants in exchange for income being unrestricted

The average lower amount accepted for an unrestricted grant was £630,000

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)”

22

17%

27%

31%

26%25% 24% 23%

13%

41%

24%

18%

47%

23%

18%

29%

13%



£1 million - same as the original grant £700k - £900k £400k - £600k £100k - £300k

But larger charities are far less concerned about getting core funding



23

33%

23% 22%

18% 18%

24%

33%

22%22%

19%

11%

18%

35%

25%

35%33%

45%

26%

21%

Medical/ Health/Sickness

Overseas aid/ Faminerelief

Disability Arts/Culture/Heritage

Environment/Conservation

£1 million £700k - £900k £400k - £600k £100k - £300k

Arts charities are eager for core funding, while medical charities are least concerned



24

“This is too hypothetical a question, as it entirely depends what the restricted project is - if it is of strategic importance then £1m restricted is as useful as £1m unrestricted.”

“I don't understand the question. Why wouldn't we accept the larger grant with the restriction?”

“Our clients need reliable and regular on-going support, they often tell us that it is far more

valuable to them than short-term projects. This means that

unrestricted funding - funding that we could use to sustain and improve these core services - is

hugely valuable to us.”



Different perspectives on unrestricted funds

25

32%

29%

46% 28%

64%

65%-1%

-8%

-2%-1%

-1%

-100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100%

I think it would be/is veryhelpful when grant-making

trusts allow multipleapplications for differentprojects from the same

organisation

I would like grant-makers toprovide more funds that wereunrestricted or grants for core

costs

I would like grant-makers togive better feedback on

applications

Strongly disagree Disagree Not sure Agree Strongly agree

93% of respondents were keen for more unrestricted funds to be offered

Base: 414-417 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy

Q7: “Please indicate how strongly you agree or disagree with the following statements by ticking the appropriate box”


• 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

CharitiesGrant-makers


they’re needed

Making grants go

the furthest

Improvements to the

application process


28

6%

12%

59%

11%

12%

0% 20% 40% 60% 80% 100%

No restrictions/completeflexibility

Few restrictions and plenty offlexibility

Some restrictions and someclear flexibility

Quite clear restrictions withonly very limited flexibility

Very clear restrictions

All respondents


Charities want a mix of restrictions and flexibility in guidelines

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.

“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.”

29

Waiting for a decision

31

The top priorities from the group exercise of the Open Forum

Base: 60 fundraisers, 27 March 2012Source: Open Forum on fundraising from grant-making trusts, nfpSynergy

Guidelines and criteria:

clear, up to date, searchable and

links to application format

Contact& building

relationships

Feedback,acknowledg

e applications

Fund core costs,

continuity in funding

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.

32

Top 5 reasons charitable trusts are seen as role models


1. Clear guidelines

5. Helpful, providing guidance

3. and 4. Good communications and relationship building

2. Easy, fast application processes

Q15: “Which charitable trusts do you think should be role models for others and why?” NB Please refer to verbatim document for full comments.

CharitiesGrant-makers


they’re needed

Making grants go

the furthest

Improvements to the

application process


34

Success rates for the sector as a whole could be improved


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)”

125

41

Average number of unsuccessful applicationsAverage number of successful applications

The average charity makes 166 applications a year, a success rate of 24.7%

35

38

300

110

258

116

12

71

30

55 54

Arts Culture Heritage Disability EnvironmentConservation

Medical HealthSickness

Overseas aid Faminerelief

Average number of grant applications per year Average number of successful grant applications per year

Different sectors have different success rates


Overseas aid and Famine relief had one of the highest success rates: 46%

Medical/ Health / Sickness had one of the lowest success rates: 21%


36

60

88

264

296

1124

55

93



Average number of grant applications per year Average number of successful applications per year

While larger charities have a much higher success rate


Success rate for the smallest charities:19%

Success rate for the largest charities: 31%


37Base: 292 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy

718

37

109

No FTE staff working withgrant fundraising

<1 1 (1-1.49) More than 2 FTE staff workingon trust fundraising

Mean number of successful applications per year

Q14: “How many applications would you say were successful in a year? (approximately)”

Professional fundraisers are crucial to the success of big charities

38

How charities can reduce the number of unsuccessful applications

Tailor applications to the trust

Avoid straying outside of guidelines

Consider collaborating with

other charities

39

What’s happening next?

Interviews with grant-makers

See relationship from trust point

of view

Find ways to improve working

relationship between

charities & trusts

Timescale

June – August Interviews with GMTs

September – October Writing up of research and report


• 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


they’re needed

Making grants go

the furthest

Improvements to the

application process


What might a win-win for charities and grant-makers look like?

In tough economic times

Putting funds where they’re most needed

More unrestricted and

core funds

Less wasting of time and

resources on ineligible

applications

43

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What does the model grant-maker look like?

Education

restrictive grant

smaller charities

trusts income

small charities

larger charities

largest charities total

charities perspectives

unrestricted grant was400k