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BD Giving Notes #26 – ‘The trouble with funding (Part 1)’

Why does a funder get to decide what is strategic for our organisation? And; if they’re certain about what they won’t fund, then why won’t they tell us what they will fund?

This is the first of a three-part series of blogs on the impact of the cost of living crisis on the voluntary and community sector in more deprived areas of England, and the role funding agencies can play to protect them. As a funder and a small charity that also relies on fundraising, BD Giving is somewhat uniquely situated to feel the resource intensity of grant applications. 

In this blog,

  • Part 1 of this series, we cover some recent experiences of applying for grants. 
  • Next we will take a step back to a macro-view of the issue at stake, and the urgent need to address the cost of fundraising for small and minority-led charities. 
  • Finally, we will share elements of our own approach to funding and take notice of some positive developments in the world of funding, which challenge the way funders hold power, and that we wish others to emulate.

As debates about ways to address the cost of living crisis rage on, we were reminded by the findings of Caroline Fiennes, Gemma Bull, and Sarah Sandford in their recent Giving Evidence report, of the cost incurred by charities to apply for grants, especially small ones. Overall, UK charities are estimated to spend at least £900m every year applying to charitable foundations, with some charities dedicating almost a fifth of their resources searching for grants.

The report goes on to say that few foundations have the necessary information or incentive to do things differently. This made us reflect on recent fundraising experiences that have exacerbated the stress on our organisation, and which we feel are unfortunately typical of the imbalance of power that exists between charities and their funders.

Our recent experience of applying for grants

We were given the opportunity to apply for a relatively large strategic grant. The funder suggested we apply for around £250,000 but we considered asking for more because of the scale of what we want to achieve:

 “Think about your strategic growth and reach for the stars,” they said. So we did. 

We applied alongside other organisations and we all eagerly awaited the funder’s response. However, shortly after our application was submitted the timeline changed. When we thought we would hear the result of our application in three months, the funder changed the wait to six months.

During our wait, the funder paid us a visit and engaged in conversation to better understand our work. It was a lively exchange and we were grateful for the opportunity to discuss our impact in Barking and Dagenham in depth.

A month before reaching the new deadline, we received a phone call from the funder asking us to whittle down our request. We knew we had submitted an ambitious budget, so we were prepared to revise it. But the conversation took a bizarre turn when we were challenged on what we had deemed strategic for our organisation. It went a bit like this: 

FUNDER: “This is a strategic fund so we wouldn’t be able to fund the non-strategic elements of your application.

ME: “I understand, let me know what you wouldn’t be able to fund so I can revise the budget accordingly.

FUNDER: “I wouldn’t be able to tell you what you need to remove. Only you can tell me what is or is not strategic to your organisation.

ME: “Well, we think that the initial proposal and budget that we have submitted is key to our development.

FUNDER: “Yes but we wouldn’t be able to fund everything you’ve asked for, you see.

ME: “…” 

The funder wasn’t clear on how exactly they wanted us to reduce our budget so we had to guess. We then had a series of phone calls from them and submitted four different revisions of our budget before our application was considered. This process took just as much time as applying for the grant six months prior and each time we were asked to respond quickly (sometimes within hours!).

Sadly, we weren’t the only ones in this situation. We soon found a community of fellow applicants asking the same questions:

  •  Why does a funder get to decide what is strategic for our organisation? And;
  • if they’re certain about what they won’t fund, then why won’t they tell us what they will fund?

Organisations like ours that depend on grants to operate know all too well the experience of last-minute delays and urgent requests from funders. 

More recently, we applied for a smaller grant to build up our digital infrastructure, something most charities are desperate to do. The reason we decided to apply was that the application form promised a quick six-week turnaround on grant decisions. Yet, a few days before the response, we received an email that said “due to the number of applications received, we will now inform you three weeks later than planned.” 

The long wait has ripple effects on our charity and the development of our infrastructure. Delays in grant decisions, particularly when they are material to providing employees with job security, or delivering a key bit of infrastructure can literally stall the organisation waiting for the grant. For instance, the staff member whose job depends on the grant can decide to prioritise job security and leave the organisation for somewhere else, leaving a vacancy that can take months to fill. In the case of a project or programme, the delay can have vast ramifications on the timetable for delivery and the availability of resources, such as external contractors.

Let us be clear, we are not saying that funders shouldn’t challenge applicants on their applications, far from it.

We think that funders have a unique role to play to provide feedback and help charities think carefully about what they are trying to achieve by seeking funding. But we also think that funders have an opportunity – and frankly a duty – to try and reduce the cost and stress of applying for grants. This includes sticking as much as possible to the announced timetables for responding to applications. 

Funders should recognise that once a charity has engaged with them – whether that be taking a meeting or applying for a grant – all of their decisions have a cost to that charity.

Our commitment to grant applicants

As a funder, we know our applicants and grantees have been tumbling through two and a half years of insecurity and right now, there’s more need than ever. 

It seems obvious to adopt a position that takes into account the already stretched resources of grant applicants and fold in the wider context of the crises into funding programmes. We will do our part to resource our funding programmes accordingly and we expect others to do the same. 

And, as Fiennes, Bull and Sandford suggest, we will speak up when we feel funding has gone amiss with the hope that a public acknowledgement will incentivise funders to do things differently.

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