The inexplicable dominance of one-year grants

There are good reasons for a funder to limit the length of grants awarded:

1. To keep flexibility - tying up all future funding makes it difficult to shift priorities or respond to new applicants and emerging needs.
2. To be able to stop funding if problems arise - such as the organisation failing to deliver or changes its focus (though this can usually be better addressed through terms and conditions and grant management).
3. If it is the sole funder of the organisation so the reliance on one income stream makes the grant recipient vulnerable (a time limit and tapering down of funding may well be appropriate in this instance).

Otherwise, funders should award grants for as long as they possibly can. Multi-year funding means lower operating costs on both sides.  Applicants don’t have to reapply and the funder does not have to take the request through its full processes again. It also encourages a relationship between the funder and funded. For the grant recipient, it provides financial security and enables planning.

 

So why do so many trusts and foundations make annual grants?

 

Grantmakers for Effective Organisation’s 2014 survey (see link below) found an increase in the number of grantmakers that give multiyear grants at least sometimes to 58% in 2014. But that still leaves 42% who don’t.

 

Dependency is certainly cited by funders as a reason not to keep funding an organisation. But I think this is the funder’s issue - I don’t think the grant recipient worries about it. I have never had anyone say to me that they only wanted a one year grant as they did not want to rely on the funding. As long as the communication is clear at the start – e.g. “this grant is for four years only and you cannot reapply”- and you are not the sole funder, then dependency should not arise.

 

It may be that funders are uncertain about their own future income or want to prioritise flexibility and the ability to fund different causes. Perhaps it is all to do with accounting practice. Or is it that funding one-off project costs is still winning out over investing for long-term change?  I can find research on the benefits of multi-year funding but no particular references or research into the benefits of an annual grant cycle. So I remain puzzled. If anyone knows how the annual funding cycle arose, why it is so persistent and any research into its benefits, then please do get in touch.

 

www.geofunders.org/field-study

 

 

https://twitter.com/emmabeeston01

 

 

 

Read this blog on immediacy NOW

A recent survey found that we have become ever more impatient over the past 5 years. We wait an average 10 seconds for a web page to load, 5 minutes for a drink at a bar, 10 minutes in a post office queue and 13 minutes sitting in traffic before we lose our patience.  And if, like me, you read those and think they are reasonable, chances are this shift to immediacy is with us to stay.

So how does this affect grant makers who take their time to sift, assess and decide on applications?

Well first of all, it affects those we support. Charities and fundraisers have already adapted to this change with ‘click to donate’, ‘text to give’ and crowdfunding. According to Blackbaud’s 2014 Charitable Giving Report, online giving grew 8.9% in 2014 compared to 2013. The rise was sharpest in smaller organisations and the report concludes “these agile organisations are embracing new approaches and modern technologies to fuel their growth”. When assessing financial sustainability and funding strategies we can expect to see an increased role for social media as well as loan funding  (which is very much about having the funds now and paying it back later). The shift from legacies to ‘giving while living’ will also change the future income streams for some charities.

Some funders already have experience of creating a sense of urgency to gain their funds. BBC Children in Need and Comic Relief both create a ‘one day only’ sense of excitement for their appeals and then spend their funds throughout the year through their grant programmes. The UK Community Foundations raised £45.8m last year through their time-limited scheme, Community First, where donations were matched by central government funding. But for Trusts and Foundations who don’t need to raise funds (like those with large endowments), is there a need to respond to this desire for immediacy?

There is room for improvement in customer service. Funders could acknowledge applications promptly and could look at ways to improve the time taken to get a decision through delegating authority to staff or rolling programmes. The Big Lottery Fund is currently trialling instant decision-making out in the field for its Awards for All programme. With the sector under such huge financial pressure, I am sure any decrease in time spent waiting for funding decisions would be welcomed.

Where I think it is hard to respond to immediacy is in giving feedback on results. Crowdfunding provides instant gratification for your donation but also pretty quick feedback on whether or not the target amount was achieved. This works where your donation is tied to outputs (your £25 will pay for...) and capital appeals with tangible results. But it does not work where a funder is supporting long-term change for complex social problems such as poverty. Here, what charities need is long-term funding over as many years as possible. Esmee Fairbairn’s new grant strategy includes this goal: “We look for catalysts to change systems and challenge existing orthodoxies. This may mean allocating significant sums of money for the long-term”.

Independent grant makers can challenge immediacy through a long-term outlook which comes from a history of giving and the security of endowments. But we should not let this make us complacent. I don’t think it is OK for applicants to put up with lengthy decision processes when we could change things to respond more quickly. After all, if we’re only prepared to wait 5 minutes for service at a bar, how long should anyone have to wait for a funding decision?

https://twitter.com/emmabeeston01



http://www.telegraph.co.uk/news/newstopics/howaboutthat/11373010/Britons-lose-patience-after-waiting-five-minutes-to-be-served-at-a-bar.html

https://www.blackbaud.com/nonprofit-resources/charitablegiving

The fundraiser as internal project manager

I am pleased to present fundraising expert Jane Selman as this week's Guest Blogger...

Fundraising is much more than identifying donors, building and stewarding donor relationships and asking for the money.

All fundraisers know that it’s a good idea to fully grasp the scope, scale, nuances, language, stories and energy of the work that you are fundraising for.  And one significant way to do this is to talk with, and have good working relationships with, colleagues who deliver the projects/services.  

All well and good so far….the money is in, the work is funded, the project staff are delighted and the fundraiser can move onto the next “ask”. 

However, the fundraiser and project staff continue to need each other.  At the end of the year, the fundraiser needs to produce the monitoring and evaluation report required by the funder.

This is where the fundraiser has to extend their skills to become an internal project manager.  The fundraiser needs to be part of, or at least help to drive, the internal process and procedures that ensure the charity remains on track to meet the terms and conditions of a donation / grant. 

Why? Because, the fundraiser needs to make sure she/he can do the job of excellent donor stewardship, writing an accurate report and being the external ambassador for their cause.

And this is where the hiccups happen….because people are busy, have naturally different priorities and performance targets to that of the fundraiser. 

What do I mean by the fundraiser as internal project manager?

• Finance: is the spend going to budget and according to what was said to the donor? Are your finance colleagues aware of how and when you need to report spend to the funder?
• Keeping an eye on the monitoring ball: are all monitoring systems working? Is relevant data being collected and recorded on time by project staff?  Are you able to report against outcomes as well as outputs? Are case studies and anecdotes being collected as well as quantitative data?  Who is taking the photos of activities?
• Are there any changes in planned project activities, beneficiaries, staffing, volunteers? 

Ever heard of the RASCI project management system? The RASCI matrix is a useful tool for defining the participation of various roles in completing tasks, responsibilities and authority of any project. It is a particularly useful model for projects where several people who have different areas of expertise, need to be involved.   I know of several fundraisers who have used this to their advantage.

http://www.projectsmart.co.uk/how-to-do-raci-charting-and-analysis.php

http://www.thecqi.org/Documents/community/South%20Western/Wessex%20Branch/CQI%20Wessex%20-%20RACI%20approach%207Sep10.pdf

So, however your organisation does this, whatever the process and procedures that are already in place to internally manage projects, I urge the fundraiser to also see their role as being a part of project management.

And don’t forget to build in more time, persistence and patience than you initially think is required, in order to receive the information you need to produce that funding report on time.

jane@janeselmanfundrasing.co.uk

www.janeselmanfundraising.co.uk

My weekly blogs give a funder's perspective on charities and funding them. It is good to hear other view points, like Jane's, so if you would like to be a guest blogger, please get in touch with your idea - Emma Beeston
https://twitter.com/emmabeeston01

 

3 reasons for funders to use twitter as a grant management tool

I am what the tech people call ‘a late adopter’ but now I am on twitter, I find it a surprisingly useful tool.  I can’t see it replacing grant report forms or monitoring visits, but I do think it has a role to play in grant management. I have added it to my toolkit and try to ‘follow’ every charity I fund. This is what I think it adds:

1. Because twitter is another way in which charities present themselves externally, following a charity you fund can provide you with a sense of their activity, how they respond to donors, and how they promote their cause. I don’t read every tweet, but it is one source of information in reviewing how things are going. Mostly this will be informative and reassuring but there are times when it may well prompt me to pick up the phone and get in touch. For example, noticing a job advert for a new CEO or a ‘keep us from closure’ appeal may be extremely useful information to see if you have not been told directly.
2. Charities working in a particular field or locality often share information that is relevant to their work and clients. Reading this can help keep you informed about the issues their service users are dealing with - such as the impact of welfare reforms and other government policies. Films in particular can be a great way to bring their work alive and deepen your understanding of what you are funding.
3. Part of grant management is offering help when you can. A retweet from a funder can help raise the charity’s profile with a new audience. It is an easy way to offer in-kind support and can often be win-win where it raises the profile of the funder as well e.g. when a funded charity wins an award.

Personally, I don’t use Facebook for work, but there are also funders using Facebook to good effect.

I would not suggest that funders become the drivers of a charity’s social media strategy. But I do think you should bear in mind that they are one audience for your communications. According to a recent poll, only 16% of non-profit organisations follow their grantors on Facebook or Twitter (see link), so the rest may be missing out on useful information about projects funded and funding available. In the US, 45% of foundations use social media: 65% using Facebook and 40% using twitter (see link). So remember to follow funders, and potential funders, on twitter. Use it to thank funders for your grant, tell them about significant happenings like winning awards and update them on events and publication launches.

And for fellow funders, I encourage you to start using twitter to follow the organisations you fund. In addition to having it as a grant management tool, you will get access to lots of interesting sector conversations and findings, and you can ask infrastructure bodies to promote the funds you have available.

Not bad for a late adopter!

 

https://twitter.com/emmabeeston01

 

http://www.nfpaccounting.com/blog-0/bid/184430/Social-Media-An-Effective-Grant-Management-Tool

http://www.grantcraft.org/infographics/whats-trending-with-foundations-and-social-media

Please don't please me

Like it or not there is an imbalance of power in the relationship between the funder and fund seeker. The funder has the money and makes the decisions about who gets it. Whilst we can argue that without organisations to give the money to, the funder cannot fulfil their mission (so they need you as much as you need them), it rarely feels like that to those who are applying.

But this imbalance of power can get in the way of funders being able to help. For example, if you have received a grant from a funder who offers ‘funding plus’, there can be additional support on top of the grant. This can be the chance to network with peers; additional training; employee engagement for corporate funders or paid-for expertise such as an accountant or consultant. If the grant recipient does not feel able to openly reveal areas of organisational weakness, they can miss out on this valuable opportunity.  And if they do say they want help with e.g. business planning but feel unable to mention that there are issues in the leadership team, then any help provided is unlikely to succeed.

On the other hand, the funder may have noticed an area which needs strengthening. We get to see lots of examples of good practice and may by comparison observe areas for improvement in e.g. user involvement or governance. Our motivation is to help strengthen the organisations we fund. We want to improve outcomes for service users or increase the chances of the organisation continuing and securing other funding. At an individual level, I feel it is my duty to share anything I have noticed. However, funders are not experts in delivery and won’t have the complete picture. So my observations may well be wrong or other inter-related issues may rightly have a higher priority. If I tell the grantee my thoughts and they do not feel able to disagree then they may go ahead with my suggestion in order to ‘please the funder'.  This results in wasted effort as the support could be misplaced and the organisation is unlikely to give it their full attention and commitment.

Not surprisingly, the urge to please a funder is strong. But it shouldn’t get in the way of working in partnership. As the one with the power, it is up to the funder to try and create the conditions for a grantee to be open, to feel able to disagree, to challenge suggestions and decline offers of support. When I ask for feedback on our funding process, it is a strangely reaffirming experience if I get negative feedback from a charity we fund. It means they feel able to ‘speak truth to power’ and we are all the better for it.

https://twitter.com/emmabeeston01

Who wants to be a secret millionaire?

There is a long-held cultural belief that anonymous giving is good:

“When you give to the needy,

do not announce it with trumpets”

Matthew 6:2

An anonymous donation means someone wants to give money to a cause and doesn’t want or need any recognition for their generosity. Sounds very altruistic, however, there are a mixture of reasons for either staying anonymous or making your donation public and they don’t fall neatly into good or bad.


Giving anonymously keeps the attention on the cause and not the donor. It means the individual avoids getting swamped with further requests for money and may help reduce the risk to their personal safety. But it does mean that they escape public scrutiny of their giving. This may be a significant factor in their decision, especially if they are funding something controversial or something that falls outside of their associated public profile.


For those who ‘trumpet’ their giving, going public may bring recognition and status. Donors declaring their charitable gifts are taking a risk when they make this public expression of their personal values – literally putting their money where their mouth is. Their open support can lend credibility to a cause and inspire others to give. This is certainly the case with the ‘giving pledge’ for the super-rich but also works for other philanthropists. I recently met with one who said they give openly because they want to be a role model and encourage others like them to give.


But what about the charities getting these gifts? Getting a no-strings attached cheque in the post has a certain appeal, but actually it can put charities in a difficult position. First of all, they miss out on building a relationship with the donor and benefiting from the other help they could bring: credibility, leverage, expertise. And truly anonymous gifts, trigger an ethical discussion. In the Institute of Fundraising’s ‘Donation Acceptance & Refusal’ guidance it states that gifts over £25k must be reported to the Charity Commission because of the issues of money laundering and other criminal activity. A quick Google search brings up several examples of organisations having policies refusing anonymous gifts as “the risks of accepting a gift with no idea of its provenance are too great” (see link below).


So whilst there may be a strong cultural pressure to be humble and shun the spotlight, there are a number of good reasons for donors to be open that may actually benefit your cause more.


http://alumni.reading.ac.uk/page.aspx?pid=912

https://twitter.com/emmabeeston01

Plans: get them out of your head and on to a page

Doing the paperwork rarely gets a positive reaction. More often it is seen as a necessary evil and is described in terms of an external driver such as “we have to do this for our funders”. There is a real sense that charity staff producing documents are swapping front line work for tick-boxing exercises.

But I am a big fan of writing things down, and here’s why.

One situation where I think it is really important to write things down is planning. When I visit a charity and the CEO says “we have not written down our plan but we all know what it is”, my immediate thought is “Really?” When there is a jointly created and clearly written plan, a group of Trustees are still likely to interpret and describe it in different ways, giving more emphasis to their priorities. Even if it was true now, what about new staff – do they get told the full plan when they join? How are they helped to remember it and implement it in their everyday work?

A written plan aids strategic thinking. The very act of agreeing on the exact wording to write down helps to get clear agreement. Otherwise everyone holds a slight variation in their heads and the differences go unidentified and unchallenged.

It also saves lots of time. You really would not want to tell everyone your 1, 3, 5 and 10 year vision every time it is asked for. Much better is to have it in a simple document that can be referred to at Trustee meetings, given to funders, and used for staff induction. Not a piece of paper that sits in a drawer but one that is regularly used, reviewed and updated.

The plan belongs to the charity and not the individual. When it is held in the CEO’s head then it can easily be lost or changed. What happens when they leave or go off sick? Or change their mind? The CEO or Chair may well be the driver of the strategy but it is much more likely to be achieved if the whole organisation is part of the process and working to a shared aim. It is hard for others to own the plan when it is in someone else’s head.

Research has also shown (see link below) that we are more likely to achieve things we have written down. You can imagine why this works – you have committed to a public statement and so can both hold yourself to account and be held accountable. Trustees can measure the performance of staff and the charity against the stated ambitions. And you will also know when you have achieved something you set out to do and can celebrate your success.

So when it comes to paperwork, don’t think policies, procedures and plans are a distraction from your ‘proper’ work that you only produce for funders. Think of them as important aspects of your work that ensure everyone is literally on the same page and that stop you having to repeat yourself over and over again. If you roll your eyes when asked to produce your plan, it is probably time to write it down and value it for the helpful record and tool that it is.

Dr. Gail Matthews found that you are 42% more likely to achieve your goals just by writing them down. http://www.goalband.co.uk/uploads/1/0/6/5/10653372/gail_matthews_research_summary.pdf

https://twitter.com/emmabeeston01