Why funders should provide feedback

I am disappointed when I read in a grant maker’s guidance that they do not provide feedback to unsuccessful applicants. I don’t think it is good enough for these three reasons:

1. I think it is impolite not to.

Seeking funding is hard work. The environment is particularly competitive at the moment and success rates are falling. Fundraisers have to bear the weight of the charity’s future and their colleagues’ livelihoods on their shoulders. In the light of this, I think it is impolite not to acknowledge their efforts and let them know why their request was declined.

And yes, I know smaller funders and those with no paid staff say this is difficult given the administration costs. But I have seen it done well and cheaply using a polite email template with details of the most common reasons applications were unsuccessful (lack of financial sustainability, poor project planning, outside criteria etc.) with the relevant ones highlighted.

2. It wastes everyone’s time if you don’t.

If the funder doesn’t let an applicant know why they were unsuccessful then they may well keep applying. Funders will therefore continue to get applications with little chance of success that they will have to process and make decisions on. If the fundraiser is not told to stop or to do something differently, the funder will just have to keep responding. This wastes time for both the fundraiser and the funder.  In the long run giving feedback improves the quality of applications.

3. You owe it to the service users.

If a funder is turning an application down because the charity falls short on an area of good practice or quality compared to others then there is a duty on the funder to be open about this. Otherwise the charity won’t know to improve and their service users won’t benefit from this knowledge. And surely our whole point as a funder is to support quality work that makes a difference?

Giving feedback is not always easy. When you do it in person or on the phone you can get a very defensive reaction or upset someone. Sometimes it feels that you don’t have anything useful to say particularly if it was declined due to “insufficient funds”. But it is still a worthwhile activity. Even just saying there was not enough funding available means the fundraiser knows it wasn’t anything they did that let the charity down. And at least they know that it would be worth applying again.

It is not good enough to say “we don’t give feedback”. There are ways to manage the process to keep the time taken and costs down. And the fundraisers and service users deserve our openness and respect.

https://twitter.com/emmabeeston01

Why funding decisions are like The Voice

For those of you who have never watched the BBC Saturday night show, The Voice, it is a talent show where celebrity coaches get to pick singers for their team to then battle it out to be the top singer. The twist is that the coaches don’t get to see the singers and so judge their performance by ‘The Voice’ only. If they want the singer, only then do they get to swing their chair around and see them.

So what has this got to do with grant making? Well, the selection process on The Voice reminds me of decision making panels. For starters, all the applicants are good. The Voice is not one of those shows where people are encouraged, only to be humiliated on TV. Funders also approach applicants with respect and those with no chance of success are made aware of this at as early a point in the process as possible.

Then there is the case where one of the coaches picks the good singer. Or the panel is happy that the application is a good fit with the criteria and should be funded. So far so straightforward.

But then there is the situation where the power shifts. In the case of The Voice it is when all the coaches turn around. The singer is that good that they really stand out. In grant making this is the rare occasion when the charity you want to fund is not just good enough to be funded, but is one that you really want to fund and often wish you had more money available to give them.

What makes the difference is both obvious and hard to describe. The Voice coaches talk about connecting, of feeling the emotion, that there was something that made them push the button. I like to think that funders are more objective than this but there are still stand-out charities that you just want to support. It will be different for different funders and it is that magic something that all bid writers are trying to convey. Yes, there is the strong fit with programme aims. Yes, they are strong on all aspects from finances, governance, budgets, project planning, evidence and outcomes. And then there is the elusive something – perhaps some added drive or ambition that comes across; or that they are having success in a particularly challenging area; or just that quality shines through in everything they do.

Funders may not have spinning chairs but there will be something that grabs us. And it is a good reminder that the power is not really with the funder but what we are able to achieve through others.

https://twitter.com/emmabeeston01

Tax relief for charity workers

I have always had an issue with the story of the prodigal son. Whilst he got the big welcome and feast, the son who stayed home and did the right thing got little credit. I understood why the father celebrated the return of his son but, for balance, I also wanted there to be a party for the son who stayed.

I have a similar problem with the attitude toward people moving from the private sector into the charitable sphere. We applaud when an industry chief decides to bring their skills to the charitable sector as a Chair or Chief Executive. We also praise those who accumulate wealth in their business years and then decide to become philanthropic and give it away. Obviously, these acts are to be welcomed – I am not quite that curmudgeonly! – and they are certainly much better than not doing anything charitable.

But it does make me wonder why those who have chosen a path of working in the charitable sector from the outset do not get such praise? The wages in charities are generally lower – partly to keep overheads down but also because it is seen as a nice place to work with its own intrinsic rewards of making a difference. (As an aside, I never quite get how working to divert challenging young people from gangs is ‘nice’). Most charity workers are not motivated by their earnings. When you make the leap from for- to non- profit, it is seen. But when you are just working in it, you are below the radar and get no fanfare. And instead of winning praise, if workers move across into the commercial sector, they are accused of selling out.

So I learned with interest the other day that in Australia you get tax relief if you work for a charity.

“If you are classified as a charity, your staff can salary-package up to $30,000 worth of benefits before triggering the Fringe Benefits Tax (FBT).

Charities survive on a shoestring budget which can prevent them from matching the salaries offered by commercial employees. But the FBT breaks allow them to attract good quality staff by offering packages. Effectively, the staff get more for their salary dollar.”

From http://www.ourcommunity.com.au/financial/financial_article.jsp?articleId=2906

So as well as tax relief for charity donations by companies and philanthropists, how about adopting the same for charity workers in the UK? It could kick in after say 3 years and then increase over time as a reward for those who stay. Charity workers opt out of the for profit sector to support others so surely they should be appreciated and applauded?

https://twitter.com/emmabeeston01

Loans - what are they good for?

I do have doubts about loans for social purpose organisations (watch this space for a future blog on my reservations) but recently I went to an event where a clear case was made for some of the benefits.

 

The Funding South West meeting focused on loans, with presentations from three providers: St John’s Hospital (Bath), Somerset Community Foundation and Charity Bank. None of the providers were claiming that loans were the only solution. However, I did note down a number of positive things about loans:

• Straightforward, direct investment
• Encourage entrepreneurship
• Reach new social purpose organisations not eligible for traditional grants
• Enable earlier completion or start of work which needs funding
• Often come with business and investment readiness advice
• Can be used as match funding for a grant
• Less uncertain than competing for grants
• Can get organisation through to a point of getting paid under a payment by results contract

They are not suitable for everyone but I think the above list shows that loans do merit a place in the funding options and some proper consideration. I was persuaded of several situations where they could be a good idea. One example: imagine you are embarked on a capital build project and the costs are rising as you wait to raise the next tranche of funds. A loan could mean you carry on with the building work at current prices and then get on and start generating income from your activity planned to take place in that building.  Overall the costs could be lower than if you had to await the outcome of a lengthy capital appeal.


Given the increased competition for grants, a loan may also help reduce the uncertainty that comes with funding bids for those organisations that want to borrow and can afford to repay. They will be able to get on with their plans without waiting to see if they will be grant funded. And for the funder, a loan brings the benefit of recycling money to use again.

https://twitter.com/emmabeeston01