How charity funders have (mostly) stepped up to the challenges of Covid-19

We and many others have written quite a lot over the last few months about how charity fundraising might change post-pandemic. However, relatively little has been written about the amazing job (most) funders have done supporting essential services for vulnerable people and, quite frankly, keeping a large slice of the charity sector afloat.

A recent NCVO report has provided valuable insight into how charities and funders responded to the funding challenges of the pandemic. There a lot of rich information in the report, some of which we summarise here, but the most important thing we want to say to funders is:

Thank you

The NCVO report shows that most charities turned to institutional sources of funding (grants and contracts) early in the pandemic when it looked like many charities might fold. Others tried to increase public donations, some tried increasing traded income and a few sold off assets.

We’ve noted in a previous blog that many funders provided substantially more funding than in “normal times”. One of our clients, for example, increased their grant giving in 2020-21 by over 250% compared with the previous year and they provided considerable non-financial support to grantees. The NCVO report shows this is not a one off, with 58% of charities reporting that existing funders offered more funding during the pandemic. Of course, this cannot be sustained indefinitely and we should expect many funders to return to levels of grant giving below pre-pandemic levels so they can replenish reserves.

What the report also shows is the flexibility and compassion showed by many funders to help charities survive and to meet the needs of vulnerable communities, including:

• Switching money into “emergency funding” and then “rebuilding funding” as the pandemic unfolded, focusing in particular on communities and charities most negatively affected.

• Offering flexibility in how existing grants could be used, including shifting to unrestricted funding.

• Streamlining processes, including both applications and reports so that money could be provided quickly and without undue burden at a stressful time.

• Working much more collaboratively with grantees, through open, honest and trusting dialogue.

• Recognising and prioritising the need for racial justice in funding, responding both to the disproportionate impacts of Covid-19 on black, Asian and minoritised communities and the racial justice campaigns arising from the murder of George Floyd.

Of course this has not been a universal response, with some funders (sometimes out of necessity) withdrawing grants or contracts, ceasing new funding or refusing to be flexible about how funds are used. However, they have been in the small minority and for that we, and many of our clients, are truly grateful. Again, thank you.