Can anyone be a philanthropist?

Recently I have heard lots of arguments that seem to extend the opportunity to be a philanthropist to all of us. One line is that philanthropy is not just about giving money but is also giving your time and skills. There are lots of great pro bono schemes out there like The Cranfield Trust and Pro Bono Economics which are based on volunteering. (Suddenly, it seems that the term philanthropy gets applied when volunteers are skilled professionals and not ordinary people.)

The other common argument is that whenever we give any sum of money to a good cause then we are not donors or givers but philanthropists. I applaud the democratisation of giving which means through donations or crowdfunding pledges, funds from lots of individuals get pooled to have a greater impact. But I don’t think it is philanthropy when it is a group act. Even less so is tax paying, which is also claimed as philanthropic. Tax paying is a legal requirement, a duty, an act of distribution but as an individual I have no control over how my money is spent beyond a vote.

So what for me sets philanthropy apart is control – the ability of an individual to choose what to support - and having enough money to have an impact. So I, like most people, think of philanthropists as wealthy individuals whose money changes things – think Bill Gates and malaria or Thomas Barnardo’s children’s homes.

Perhaps calling us all philanthropists is to be welcomed as a way of claiming for the ordinary person something that usually conveys status and influence on the rich. But I don’t think philanthropists are the same as us. When I use my individual choice to give a small donation to a cause no one worries that I am wielding undemocratic power. There really is something different when your donations are big, influential and high profile. But this does raise the question – just how much money does it take to be a philanthropist? And is it true that anyone can be one?

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Soft outcomes are anything but

When I talk about ‘outcomes’  I mean the difference you make for the people you support. ‘Hard’ outcomes can be clearly defined and quantified. ‘Soft’ outcomes are hard to measure directly; they are qualitative and often intangible.


Most funders and investors want some sort of clear measure to know what difference their money could or has made. It is generally easier to provide evidence of the hard outcomes: tangible differences such as the numbers of people securing a job, the amount of benefit income gained, numbers housed, qualifications earned.


In order to achieve a hard outcome, a lot of other things have to happen – for example, changes in self belief, confidence, understanding, attitude or motivation. These are commonly described as ‘soft’ but that term is a disservice as it makes them sound fluffy and easy. Instead it takes a lot of expertise and time to build trust with someone on the margin and support them to make and sustain these changes. Think of the work involved in changing the attitude of a young offender.


The value of soft outcomes needs to be recognised as being just as important as hard outcomes. Especially as sometimes they are the only changes there will be. For example, the self worth gained from volunteering when there is no realistic prospect of getting a job. One way to add weight to soft outcomes is to use one of the many tools out there e.g. Rickter Scale, or the Warwick-Edinburgh Mental Well-being Scale. These help to translate self-assessed or observed change into numbers, allowing you to measure and evidence changes such as improved self esteem.


And perhaps we should all stop calling them ‘soft’ outcomes when they definitely are not. You really would not call it soft when a charity’s support means a woman affected by domestic abuse feels safer, would you?


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Unsuccessful funding bids – how fund seekers differ from job applicants

Imagine that you are applying for a job you really want. You make a strong application and perform well at interview but you don’t get the job. The employer explains that they had another candidate who had more skills and experience than you had. Now of course, you are disappointed or frustrated. But, unless you have reason to doubt their professionalism, you probably thank them for considering you, for letting you know the outcome and ask for feedback to see if there are ways you could strengthen any future applications. It would not be wise at this point to tell them that their Job Description was wrong and they clearly did not understand the experience and skills you would bring to the role.

So let’s extend the analogy to applying for funding. Funders have criteria and will take a view on how well applications fit with these and how strong the organisation and project is compared to others. In the funding organisations I have worked in there is never sufficient money to fund every application and so I spend a lot of my time having to say no. Some unsuccessful applicants deal with this bad news well. Yes they are disappointed, but they ask for feedback in order to learn where they could improve and whether it would be worth applying again. But a surprising number challenge the decision: suggesting that our criteria are wrong and we clearly misunderstood their work. I do appreciate that this is born out of frustration and sometimes desperation but it is also difficult to respond to. I am sure we sometimes make mistakes just as sometimes the wrong applicant gets hired. Questions are fine but hostility is not the answer.

Why do feelings run so high? I think the difference is the passion and commitment that people in the non profit sector have for their cause. This drive is fantastic but it can sometimes be a hindrance if it leads to a defensive response.  It can stop you listening or being open to learning. There are lots of reasons why we say no a lot – high demand from some areas, poor fit with criteria - and sometimes we say no because other applications were stronger than yours. In that case, don’t shoot the messenger; ask for feedback on ways to improve.


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If you want change - fund it

At a meeting this week I met with three inspiring charity leaders who are all involved in supporting people on the margins of society. On a day-to-day basis, they change individual’s lives. But they are also agents for wider and long-term change: raising awareness of hidden problems; training professionals and lobbying legislators. But they explained how hard it is to find funding for awareness raising and influence.

Charities know they have to influence others to create change. For example, Citizens Advice helps people sort out problems with benefits or debts. They also collate all that information and use it as evidence to press for changes in poor money lending practice or unfair benefit rules. There is a duty to speak up for those who cannot do so themselves and a strength in numbers. It is also deeply inefficient to keep supporting people with the same problems time and time again without seeking to address underlying causes. In a sector which needs to work with statutory agencies such as social services and the police which experience high turnover of staff, it also makes more sense to try and change the terms of contracts and the wording of laws and policies. Because these remain even when employees come and go.

The public are supportive. In NPC’s Mind the Gap report on public attitudes* 32% think charities should be lobbying government and 47% felt that raising awareness of important issues in society was important.

So what about funders? Just as there is a reluctance to fund core costs, so there is a reluctance to fund lobbying and policy work. But surely if we want to bring about long-term change through our funding, we should also want to fund work to address systemic barriers? There are some funders who do this such as Barrow Cadbury Trust who “support migrant organisations, campaigners and networks seeking to promote changes to policy and practice that ensure the fair treatment of vulnerable groups of refugees, asylum seekers and migrants and established residents”. And still others use their funds directly to create change such as the Trust for London’s campaign for a Living Wage. As more funders cover the costs of monitoring and evaluation within bids, perhaps more should also include the costs of influencing in order to support lasting change?

*http://www.thinknpc.org/publications/mind-the-gap/

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Who gets to meet the funder?

So you have sent off your beautifully crafted funding bid and are waiting for the decision when you get the call – the funder would like to come and meet with you to find out more about your work. A good thing to do at this point is to ask the funder what they would like to cover, who they would like to meet and how long the meeting will last. However, if they don’t offer you this guidance, here are a couple of dos and don’ts for how to respond.

Do - Try and involve more than one person. No matter how well briefed, it is difficult for one person to know about all the aspects that could be covered (history, finances, strategic plan, staff performance management, user involvement, project plans and budgets etc.) and it is also a weighty responsibility to put on one person. Think who should be there to cover frontline and strategic questions: the CEO, a Trustee, a frontline worker, a project manager?

Do - Think about personalities and not just roles. For example, if your CEO is a charismatic storyteller, but might be a bit woolly on detail, bring along your finance and operational staff to cover any questions on your accounts and policies. If on the other hand, your CEO is very thorough but lacks a bit of spark, make sure you invite a passionate frontline worker or some service users to bring alive their stories.

Don’t - Feel you need to introduce the funder to everyone in the building and give them a grand tour. They will be on a schedule and so a tour could be losing you precious time to answer the questions they want answered. For example, unless it is the point of the bid, the funder doesn’t need to see your new toilet block.

Don’t – Make people perform. The funder is interested in the work you do and the difference it makes. It is always a welcome addition to meet with service users, where this is appropriate. But don’t compel a service user to tell their difficult experiences to a stranger. Take time to think how your service users’ voices can best be heard and manage this carefully and sensitively.

This first meeting with a funder might be a crucial one-off opportunity to secure funding or an important first step in a long relationship. So next time you get that call, make sure you stop and think what you can do to best meet both their needs and yours.

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Reserves and funders – damned if you do, damned if you don’t

Charity Trustees have a very difficult balancing act when it comes to managing their financial reserves.  On the one hand they need to hold funds to manage the risks. This is especially true in this difficult time – recently described to me by a charity CEO as “hostile, unpromising and unforgiving” - where future uncertainty means the need to keep funds for potential redundancies, office moves and close down funds is essential. On the other hand Trustees also have a duty to spend their funds on their charitable purpose and so need to be investing in service delivery and development.

So what levels are charities setting in their reserves policies? Common rules of thumb for free reserves levels used to be 6 – 9 months, 6 months or 3 months operating costs. The Charity Commission does not set reserves levels but rather its guidance states “Any target set by trustees for the level of reserves to be held should reflect the particular circumstances of the individual charity.” NCVO’s Civil Society Almanac found the average reserves held by service delivery-type charities were equivalent to an average of 8.3 months’ expenditure in 2011/12. My experience is that in recent years more charities are using up their reserves and some have had to close. I expect that average reserves levels will have fallen.

How funders treat reserves is also a balancing act.  Charities can be turned down for having reserves that are both too high (e.g. Lloyds Bank Foundation sets an upper limit of 12 months) and too low. Too few reserves make the charity a risky bet, which may not last the length of any grant and may indicate poor planning. Too high and the charity is playing it too safe, may not be fully using its funds to support its clients and may be less of a priority “They don’t need our money”.

So as a charity Trustee what do you do? Actively set and monitor reserves levels. Include reserves in your strategic and fundraising plans. And whether they might be too low or too high, be upfront in telling potential funders the reasons why.


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Independent Funders: your sector needs you

Recently I watched a presentation by a local authority commissioner. The presentation was informative and the presenter was keen on consulting with the voluntary sector. But for the whole time I was listening, I was also thinking “I am so glad I am not a commissioner”.

Why? Some of the issues were the same as any funder e.g. how do you invest in prevention when you also need to fund acute services until prevention work starts to have an impact? But other areas seemed even more difficult to work with:

• the jargon (co-creation seemed the latest buzz word);
• the long timescales (3 years from start of process until contracts awarded);
• the external drivers (not re-tendering because unhappy with the current service but because have to under European law);
• the politics (no activity for the period of the coming election);
• the players (6 commissioning groups responsible for 1 contract).

As an independent funder, I am very lucky not to be so constrained. But I believe it puts the onus on all independent funders to appreciate and exercise our freedoms - to support the unpopular, the small, the unproven and to take risks when other funding bodies are less able to.


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Where are the new charity founders?

The recent report by RBS and Unltd¹ finds that young people aged 18 – 30 are more likely than the general population to consider it important to support social causes when starting a business. However, despite these motivations to do good, far more want to start their own business (61%) or a social enterprise (27%) than a charity (12%).  

This increased interest in the blending of business and social purpose is an important new area. More social purpose organisations are trading and setting up as Community Interest Companies. And more businesses are considering social value either as a potential market or as part of their CSR with pro bono work and corporate foundations on the rise. But is there a problem for the future of the charitable sector if more young people want to set up social enterprises than charities?

We know that the charitable sector is a valuable source of jobs and work experience through volunteering. And there is certainly sense in involving young social entrepreneurs who will bring the passion and skills needed as the context that charities operate in changes rapidly. We definitely need to capture young people who can identify and capitalise on opportunities as well as being motivated by social causes. There are lots of schemes out there supporting enterprise in schools and supporting business and enterprise start ups. Perhaps it’s time to also encourage a new breed of young charity founders and leaders?

¹ https://unltd.org.uk/wp-content/uploads/2014/06/Populus_RBS-Enterprise_Tracker_2nd-Quarter_2014_Report.pdf


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Why not invite a funder to your away day?

Recently I attended a Board away day. The main purpose for the day was long-term planning but, as ever, there were also the added benefits from bringing stakeholders together and getting to know each other away from the usual day to day issues.  Of particular interest was having not just staff and management in the room but representatives from the charities we fund. Having their perspective really helped ground the discussions. One charity said they thought it was such a good idea that they were going to invite a funder to their next away day.

When I assess charities, one line of questioning is about their strategic planning and who inputs into this. Some charities take a limited approach with just staff and Trustees getting together. Other charities take the time to seek the views and input from a wide range of stakeholders including service users and external referral agencies. I can’t recall anyone ever saying that they included a funder.

I can think of some reasons why it would be tricky. For example, if the funder endorsed the plan the charity might assume that this would translate into future funding. But these expectations could be managed. What would the benefits be? It could be a useful reality check on fundraising strategies. It could bring an objective view from someone who reads lots of plans.

When thinking who to invite to your away day, think of asking a funder. What do you think the pros and cons would be? If you’ve already tried it, I’d be really interested to know how it went.

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Writing a funding bid: an act of persuasion

It is easy to treat writing funding bids as a task – something to tick off your list, to get done. But don’t forget, your bid is a form of communication and one that is seeking to persuade.

One of the classic models of persuasion directs you to appeal to the head, heart and hands so make sure you cover all three aspects in your bid:

• The head – this relates to the logical flow of your proposal. Does it make sense? Will your activities lead to the changes you claim? Do your numbers add up? Is the unit cost reasonable?
• The heart – this is where you need to get across the importance of your cause. Make sure you convey the experience of your users with examples and case studies.
• The hands – this is the call for action. What do you want the funder to do? You would not believe how many times this is not clear so make sure the ask is upfront and explicit. For example, please give us £X to do Y to make Z happen.

You never really know who is going to read your bid or have the final say on whether or not it is successful. I tend to get won over when the logic stacks up, but someone else will remember the story – and all the angles are important and valid. The added benefit of covering all three approaches means at least one should appeal, no matter which decision-maker it reaches and whatever their preferences for being persuaded might be.

How to make word count limits your friend.

Word count limits on application forms can be annoying. They stop you in your flow. They stop you conveying vital information. They are imposed by an ‘other’ who does not appreciate the importance of what you are trying to say.

 

The next time the word count limit has cut short your beautifully crafted sent...

 

don’t get annoyed. Instead treat it as a call to arms. Consider it valid advice from someone who is encouraging you to be succinct.

 

Word count limits are there for a reason. Without them some bid writers can and do go on and on. Weighed down by the importance of the bid, they put everything down for fear of leaving out the critical fact. It is a much more confident and skilful bid writer who can respond clearly and concisely. And as a reader of application forms, clear and concise is exactly what I want to see.

 

So when cut short next time, pause, re-read the question and ask yourself exactly what is wanted here? Revise your answer and be thankful for the word count limit for prompting you to practice and display your talents in brevity.

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Is competition killing collaboration?

 

I recently presented to the Lloyds Bank Foundation Board away day on the current issues facing small charities. To help me do this, I asked some charity leaders across the West what they thought – and they did not hold back! They provided me with a long list of issues. Some were positive, like having new opportunities to deliver services that were previously run by councils. And there were lots of negatives – most of which, unsurprisingly, were related to funding such as the problems with payment by results.

One theme that came through really strongly was the impact of the shift to commissioning. Examples were:

• the ‘big players’ who have come in and won large contracts at the expense of small, local charities;

• charities who shared information about local issues and needs with a large provider on the understanding that they would become a sub-contractor only for these sub-contracts never to materialise;

• problems in partnership working as partners were reluctant to share knowledge that could be taken to strengthen another’s bid.

The impact has not just been on the loss of funding or the frustration with the new regime. This increased competition has also made people more guarded. It is a climate of competition not collaboration.

If this is your experience, how do we preserve the values of openness and collaboration in this increasingly competitive environment?

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What your charity commission entry says about you

When was the last time you looked at your charity commission entry? When assessing charities for funding, it is one of the first things I (and many other funders and assessors like me) do. Not your carefully crafted funding bid nor your lovely website. I put your charity number in the purple charity search box to see what comes up.

What does it tell me? I get lots of useful information like when you registered and how many Trustees you have. But crucially for anyone applying for funding, two sections can reveal significant issues:

1. Activities in the charity overview – this is the box where you get to say what you do. A brief summary to give me a good introduction to your work and purpose. Sometimes it says “no information recorded” and sometimes it is out of date or written in archaic language. If so, you are missing a trick – this is a free marketing space, a concise summary in your own words for all funders to see.
    
2. Financial history – and more especially the warning triangle and red text that means you failed to report on time. This sets off alarm bells in my head about your financial management. Funders usually expect a timely report for any funding given and they will be very worried that you won’t comply with their requirements. If this is you, don’t let it happen again. Get your reports and accounts in on time. In the meantime, you will need to proactively address this issue for the five years it will show up in your entry. Be prepared to be questioned about it.  Be upfront and explain how it happened and what you have done to prevent it recurring.

All charities should know the importance of the message your charity commission entry is giving out and control this where you can. Why not make it a habit to check your entry?

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You are not unique - sorry

It is crucial that workers in the charity sector are committed to their cause. They should be motivated by the work they do and the difference it makes. Lets face it – it is likely to be demanding work and not usually well paid.

It is also important that charities try to stand out when writing their funding bids. Applying for grants is an increasingly competitive process.

The problem is that these two things often combine in funding bids with the result that just how special the charity is, is overplayed. I read lots of applications that say:

“we are the only ....”

“our service is unique”

“there is no one else offering this support”

“our unique approach”

And because I read lots of applications, my response may often be: “no, you’re not – I visited another charity doing similar work just last month”; or, “you are the 5^th one using this approach that I have read today”. Without backing up your claim, you have caused me to question not just this but all your assertions.

The trick is to stand out but avoid over-claiming. Rather than saying you are unique, back it up with some detail. You can still stand out with the quality of your work and the outcomes you achieve.

A message to givers – be more magpie

New research on magpie behaviour has shown they are not attracted to shiny things, as we like to believe, but instead they try to avoid them. It set me thinking about the lure of the shiny new innovative projects that can appeal to funders and philanthropists giving money to charities.

Charities do great work that changes lives and givers big and small want to support them to do this. But behind that great work is lots of far less interesting things that have to happen. Someone needs to do the payroll; insurance needs to be renewed; minibuses taken for their MOTs; risk assessments and plans written; databases need to be maintained.

Charities all say that it is hard to raise money for their core costs yet many grants exclude them. Full cost recovery and compacts try to address this but often charities have to find ways to package their overheads into their project costs to get them covered.  Or they spend precious time away from the frontline to gather unrestricted funding from events and sales.

As our understanding of magpies has changed, maybe we should learn from this and be more magpie. Rather than just funding the attractive work that gives us those shiny case studies. Perhaps we should find reward in funding what the charity wants and needs. So why is that more funders and philanthropists don’t willingly fund the photocopier service contract, the admin worker or the office cleaner when they might be dull but are so vital?

Writing successful funding bids: Tell me something I don’t know

Before you launch into your funding bid, stop and ask yourself what it is this funder needs to know to convince them to support you.

Why will this help? Well, fitting everything you want to say into strict word count limits is always a challenge. It can save you valuable space if you focus on the facts and evidence your chosen funder needs. And as someone who reads hundreds of bids, I can wholeheartedly agree that less is almost always more. A clear, concise bid which tells me exactly what I need to know and how that fits with my funding priorities is just what I want.

One consideration is whether you are applying to a specialist or a generalist funder.

If you are applying to a specialist funder then you can assume a greater level of knowledge in that area. For example, if the funder has already stated that their priority is homeless people, you don’t need to tell them the latest government statistics on homelessness and the poor outcomes for homeless people. You can assume that they get it already – that’s why they are looking to fund this area of work. Instead, tell them why your homelessness project is the one they should fund out of all the others they are considering.

Be specific, tell them about the need in your area; who else is delivering services and how you work with them; why you use your particular model; what is different about your approach; the experience and expertise you have; what results you get...

If they are a more general funder, perhaps a family charitable trust, then you may need to use your words to explain your cause and why it is important. In this situation, don’t make assumptions. Take time to explain the key background facts and figures surrounding your issue and how people are affected before you go into the specifics about you.

If you give general information to specialists, you risk wasting their time and missing the opportunity to give them the depth of detail they want. If you go into specifics with people who have more general knowledge, they may not understand what you do. In both situations:  get it right and you have a better chance of being successful.