What's going on with charity grant funding?

It’s been tough to be a grants fundraiser over the last few months. In the first few weeks after the lockdown was imposed in March there was chaos in the market, with dramatic changes occurring daily (and sometimes hourly). Some funders stopped funding altogether (at least temporarily). Some prioritised Covid-response funding. Some prioritised existing grant holders. Some would only fund emergency Covid-response projects. Very few stuck to business as usual.

Of course, some new funding streams also opened up, including to distribute the limited Government funding on offer.

Since then the market has opened up somewhat, with criteria widening to recognise the very broad scope of the impacts of the pandemic. It’s by no means back to business as normal. We think it will be a long time before that happens and even then it will be a new normal; some things will have changed forever.

In recent weeks the biggest shifts have been away from emergency projects and urgent funding to avert financial collapse towards a focus on recovery. There is still a welcome recognition of the cashflow difficulties many charities are facing (and will face as emergency Government support schemes unwind), but such funding now tends to go hand in hand with financial and non-financial support for charities to adapt to, and ultimately thrive within, the new normal.

It’s also pleasing to see funders being prepared to take a few risks, to recognise that no one knows what shape the new normal will take, but that to wait until there is more clarity will mean many vital voluntary services will cease altogether.

However, we remain frustrated that many funders appear to be asking the wrong questions to decide which charities are “worthy” of this support. As our recent blog explained, we think that crude questions about reserves and past surpluses don’t reveal much about how well a charity has adapted to new needs and circumstances or whether they have taken on board that learning to develop credible plans for the future. Past performance is no guarantee of future success after seismic shifts of the kind we have seen recently.

Some funders are starting to recognise this through more sophisticated approaches that ask better questions and, in many cases, they offering non-financial support for experts to get alongside the charity to help them make the changes needed to survive and thrive in the new normal (and to be more agile as circumstances continue to evolve). Some good examples include the CAF Resilience Fund, Lloyds Bank Foundation’s Covid Recovery Fund and the Peter Sowerby Foundation Increasing Access Funds, and we understand more are on the way including from Clarion Futures. It must also be recognised that, after some early turmoil, the various National Lottery funds have also provided flexible and responsive funding, which is also pivoting to recovery funding.

The landscape is likely to continue to be difficult to navigate for some time yet, but the direction of travel feels positive. Our advice to small and medium sized charities is take some time out to reflect on learning since lockdown. develop plans based on a range of future scenarios and keep checking how your target funders are evolving their programmes and criteria as the situation continues to develop.

There is no easy answer to staying on top of the ever-shifting sands of the grant funding market but having a flexible and agile approach to future planning will mean that your charity will be better placed to access funding as it comes available.

Networking with other like-minded charities can be a big help both in developing ideas for the future and keeping on top of funding opportunities. Maintaining relationships with existing, prospective and recent past funders will be crucial. If they know who you are, what you are doing and that they can further their objectives by supporting you, that will pay dividends later as funding comes available.

Meanwhile, if you would like to explore how we can help your charity develop “better than before” plans or how we can help with grants fundraising, please contact us at julian@almondtreeconsulting.co.uk.