I recently introduced a local funder to a local charity.
I try to host these meetings a couple of times a year, as they’re a great opportunity for funders to understand the experiences of their potential beneficiaries; local organisations to understand what makes funders tick; and for Social Vision to understand how the landscape looks and how both sides of this eternal relationship are faring.
I’ve anonymised this completely, but thought I’d share my observations and notes. And also offer you the opportunity to anonymously share your thoughts with funders, by messaging me – details at the end of this blog.
We – every small VCSE organisation in the city – know who’s having a massive impact in York, and most funders know too. But how do we evidence this, especially when we’re all on a shoestring. What metrics do we use, and why does each funder have different measurement tools and values?
For a small organisation it creates an insurmountable barrier to bid writing and success.
Aaaargh, how annoying is it spending a day or two writing a funding bid, repeating the same information you’ve already submitted to 50 different funders, but having to adapt it to this funder’s priorities?
And whilst I’m mega passionate about my cause and beneficiaries, articulating this on paper is so difficult. I write, I rewrite. I take a break and start again. I run out of time – “oh it will have to do”.
Sound familiar? How about if we could submit a video, filmed on our phone, about our project / organisation? This will allow our passionate, personality and expertise to shine through. Surely the technical, data stuff can come later once we’re through the first vetting stage and can commit more time for less risk?
A few of the social enterprises I’ve spoken to recently report feeling penalised for being entrepreneurial. Funders think that as they have a revenue stream that they are self sufficient and do not require grants. Some of these organisations are having a massive impact across York, with some of city’s most marginalised communities, and the modest income they do generate doesn’t cover costs.
So how should social enterprises be supported, if at all? This leads me back to the impact question, and how we measure return on investment for funders? For example £10k invested in a small local social enterprise would most likely have more and wider impact than £50k invested in a large national charity.
This comes up every time I talk to charities and social enterprises. “We can find pots of money for project delivery, but can’t pay our core staff”.
Whilst a few funders do cover and even specialise in core costs (i.e. thefore.org), many funders don’t. This leaves a huge hole, and threatens delivery.
If we imagine the core staff as the glue that holds the organisation together – managing everything from the annual accounts to the payroll and bid writing – how do we expect high impact services to survive if this glue isn’t in place?
Likewise if funders only offer tiny spots of glue here and there, the whole structure falls down and we’re left with unsustainable organisations, scrabbling around for scraps of adhesive to hold their funded projects together.
Full cost recovery
And on the topic of core funding, my question to funders is how do they view full cost recovery?
Traditionally, project costs could command a 10-12% uplift as a management fee, which contributed towards the organisations running costs. But this rarely scratched the surface of true running costs, leaving quite a gap. The National Lottery has guidance on full cost recovery
Cover our time as experts
Most of the CEOs and social entrepreneurs I speak to are getting increasingly frustrated and impatient with being constantly consulted for their expert opinion.
This is a double edged sword isn’t it? On one hand, leaders want to share their expertise to improve outcomes for their beneficiaries. And if you’re on a salary in a stable organisation then this is a great use of your time.
However, many of the CEOs that I work with (smaller organisations) are self employed, part time, or volunteers. Their time is not paid for by a salary. And so calling on them to share their skills for free is just not right. As leaders with expertise who are being consulted to enhance the work of another organisation, we should be recompensed for our time at the same rate as everyone else around the table. And where this isn’t appropriate or possible, maybe those seeking our guidance could make a charitable donation to the organisation of our choice?
What would you like to say to funders?
What are your bug bears about the way funders work? Any little niggles or frustrations? Any examples of things not working as you feel they should? Share your thoughts with me anonymously (via email@example.com) and I’ll collate your responses (with all identifying features removed) and present to my network of funders.
A bright future
Whilst there is a bit of a negativity in this article, it is really important to know that local funders are proactively reaching out to understand what they’re not doing right, and are listening to our feedback.
That willingness to review, reflect and revise is hugely reassuring and should be celebrated.