Michael Theodorou reflects on the changes he has seen in grant making practices in the two decades since he became a grant maker.

They say “time flies when you’re having fun!”

I’ve been a grant maker for 21 years now and seen many changes and developments along the way.

I joined Charities Aid Foundation (CAF) from the private sector in 1996. Interest rates were at 4.5 per cent and individuals would telephone CAF thinking we were a café and not a charitable organisation. In fact, CAF is a 90 year old charity providing effective ways to connect donors to the causes that matter to them and charities with advisory/financial services to increase the resilience of their organisation.

Charitable foundations, companies and individual donors had the luxury of investment returns on capital which could be used for social purposes. The focus was giving to right causes. Impact and measurement was more a tick box exercise. Many charities relied upon Government funding year after year and many charitable organisations had limited future planning.

Then Local Authority funding cuts came. Many charities were shocked that what they felt were guaranteed sources of funding had come to an end.

At this time I managed several grant programmes, one being CAF’s Critical Assistance Fund. This provided up to £10,000 to charitable organisations struggling to survive. In addition, a group of experts including our Social Investment lending arm - CAF Venturesome, our executive directors, our Chief Executive and myself, all staffed a ‘financial crisis helpline’ to provide advice and support for organisations.

Some charities had no other income streams in place and folded. Others had to adapt fast – reducing staffing costs, sharing premises, merging and some not paying salaries for several months. As a funder, managing expectations and need was challenging. Beneficiaries suffered. The services they relied upon had either closed, or downsized, whilst their needs and requirements had increased. This was about people’s livelihoods.

What has changed?

Fast forward to now. What has changed? We have historically low interest rates, Brexit, stock market volatility, whilst both funder and operating charities have become more transparent with their finances and impact. The third sector has responded to these changes being more professional, leaner and resilient in some cases. The sector continues to respond to external pressures, evolve and deliver much needed services.

As a previous funder and now managing funds on behalf of many large companies, high net worth individuals, charitable foundations and government programmes, I have noticed a shift towards outcome and impact measurement. How investment can truly make a difference and transform lives. Funders look at providing a range of investments: funds, social lending, time both skilled and unskilled as well as use of assets including office space and product donations. There is collaboration between funders, though more can be done here.

As a grant maker we should always look to provide a simple and transparent process for our customers. We tend to expect much from our grantees and should take a step back, putting ourselves in their shoes. Applicants could be volunteers, passionate about their cause. Bid writing may not be their forte and resources may be limited. But we expect them to understand what we need, to complete application forms, monitoring updates, impact reports and manage site visits. We should consider a simple jargon-free process, transparent criteria and respect time. Be prepared to take risks, fund new concepts, recognise grantees as partners, not relying purely on the application but focussing on the organisation and their impact. Funders should increase applicant visits and ensure programmes continuously develop and fulfil the needs of the beneficiary.

Many voluntary organisations are now planning for the future. Seeking a mix of income streams and building unrestricted reserves for those difficult times ahead. Would they rely on one funder – no. It would be like investing all your money in Enron! We have all learnt important lessons and seek sustainability and resilience. Of course smaller grassroots charities fight to survive from one day to the next. Grant makers should remember these amazing organisations where a small investment can make a huge difference.

Demand for charity services, particularly within communities is increasing, through economic and political changes. CAF’s report, A Stronger Britain, echoes this point.

In conclusion, the third sector seems to get through many external challenges. We play a vital role enabling charitable partners to deliver much needed services on the ground which ultimately transform lives and communities around the world.

Michael Theodorou is senior grant making manager at Charities Aid Foundation

Civil Society wishes to thank Charities Aid Foundation for its support with this article.