I’ve been talking to a lot of sector leaders about funding. More importantly, about how to get it. Hot topics include the challenges of trusts and foundations pausing funding to “restructure”, and the need to move away from short-term project-based funding. There are also calls for a more holistic approach that includes core funding, such as running costs and pay, which is highlighted in this issue’s cover story, as well as pleas to simplify application processes to reduce the burden on smaller charities.
Despite a relatively nimble response to the pandemic, where many funders made pots of cash available for emergency measures, the funding structure appears to be creaking. Many are asking whether the money is getting to where it is needed most and quickly enough. Are we caught in a perpetual and unsustainable cycle of pouring efforts and money into treating the symptoms and not the cause? Are funders just maintaining the status quo to justify their existence? Are they spending down endowments quickly enough, or at all?
There are a few alternative models arising that are challenging how funding has been done in the past. There is a rise in corporate involvement, with organisations such as Raise Your Hands, the Avocado Foundation and the Clare Foundation building direct relationships with wealthy individuals, entrepreneurs and philanthropists to pool funds and divvy them out Dragon’s Den-style to pitching organisations. This is a disruptive model that is proving popular, although care must be taken to ensure it isn’t even more stressful and time-consuming for applying charities than traditional processes.
There appears to be a genuine willingness among some funders to put money directly into the hands of those with lived experience who are embedded deeply in the communities the funder seeks to help, exemplified by the participatory grantmaking practices at Camden Giving and Barnwood Trust.
There is also some interesting work around outcomes-based financing and tradeable impact assets being pioneered by Common Good Marketplace and the Schwab Foundation.
With government funding being trimmed back with each budget (see opposite), funders are increasingly at the heart of the sector’s sustainability. By embracing innovative funding models and a wide mix of approaches, funders can better respond to the evolving needs of communities that need their help the most. The system needs disruption. Hopefully that is what funders mean when they say “restructuring”.
Stephen Cotterill is editor of Fundraising Magazine
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