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?
Putting the grants where
they’re needed
Making grants go
the furthest
Improvements to the
application process
Summarising the win-win
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
Base: 393 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy
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%
Charities with less than 500ktotal income
£501k - £2.5m £2.51m - £15m Charities with more than£15.1m total income
£1 million - same as the original grant £700k - £900k £400k - £600k £100k - £300k
But larger charities are far less concerned about getting core funding
Base: 393 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy
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)”
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
Base: 393 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy
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)”
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.”
Base: 166 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy
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)”
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”
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
CharitiesGrant-makers
Putting the grants where
they’re needed
Making grants go
the furthest
Improvements to the
application process
Summarising the win-win
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
Base: 413 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy
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.”
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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
Base: 198 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy
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
Putting the grants where
they’re needed
Making grants go
the furthest
Improvements to the
application process
Summarising the win-win
34
Success rates for the sector as a whole could be improved
Base: 289 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy
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
Base: 289 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy
Overseas aid and Famine relief had one of the highest success rates: 46%
Medical/ Health / Sickness had one of the lowest success rates: 21%
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)”
36
60
88
264
296
1124
55
93
Charities with less than 500ktotal income
£501k - £2.5m £2.51m - £15m Charities with more than£15.1m total income
Average number of grant applications per year Average number of successful applications per year
While larger charities have a much higher success rate
Base: 289 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy
Success rate for the smallest charities:19%
Success rate for the largest charities: 31%
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)”
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
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
Putting the grants where
they’re needed
Making grants go
the furthest
Improvements to the
application process
Summarising the win-win
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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2-6 Tenter GroundSpitalfields London E1 7NH
020 7426 8888 [email protected]/nfpsynergy www.linkedin.com/company/nfpsynergy
www.nfpsynergy.net
Registered office: 2-6 Tenter Ground Spitalfields London E1 7NH. Registered in England No. 04387900. VAT Registration 839 8186 72
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