Charities value unrestricted funds twice as much as restricted, research finds

01 Mar 2018 News

The average charity would trade in a £1m restricted grant to get just half as much unrestricted income, according to research published today by consultancy nfpSynergy.

The research looks into what charities want from grantmaking trusts, and is based on a survey of 286 charities which fundraise from trusts, conducted in November last year.

The research asked charities to identify how valuable unrestricted income was. One in five respondents said they would swap a £1m restricted grant for a £100,000 unrestricted one. The average trading point was £460,000.

For smaller sums of money, charities valued restricted funding marginally more. The research found that a £100,000 restricted grant was worth just £55,000 of unrestricted income. A £10,000 grant was worth £7,000 of unrestricted income.

The research found that smaller organisations valued unrestricted funding more. The smaller the organisation, the more likely it was to trade down for unrestricted income.

The research is a repeat of work done in 2012, and it finds that charities are now trading down much more. In 2012, £1m of restricted income was worth £630,000, and £100,000, restricted, was worth £70,000, unrestricted.

The research finds that fundraisers’ biggest complaint, other than a lack of unrestricted funding, was a lack of clear feedback from grant-givers about why particular applications were successful or unsuccessful.

Fundraisers would like grant applications to take about three months, rather than the six months which is currently typical.

The report found the most common success rate for grant applications was around 30 per cent.

The Big Lottery Fund and the Garfield Weston Foundation were consistently named as the grantmakers with the best practices.

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