the hallmarks of a model grant-maker

The hallmarks of a model grant-maker in the eyes of charities Cian Murphy and Elin Lindstrom

December 2012

Finding what an ideal grant-

maker looks like

Survey, telephone

interviews, open forum with charities

- Free report: Taking nothing

for granted - Powerpoint presentation with detailed

results

The research S

TA

GE

1

ST

AG

E 2

Grant-makers’ point of view

Interviews Report in

January 2013

Finding new sources of funding in tough times

3 CM

Trusts income is still growing in the recession

4 Source: NCVO, What is the voluntary sector’s total income and expenditure?, http://data.ncvo-vol.org.uk/almanac/voluntary-sector/finance-the-big-picture/what-is-the-voluntary-sectors-total-income-and-expenditure/

0.5

2.4

13.9

14.3

1.3

1.6

0.6

2.1

National lottery

Trading subsidaries

Private sector

Investments

Voluntary sector

Statutory services

Individuals

Income from grants

Trust-fundraising sees quick rewards with high return

5 Source: Gimme, gimme, gimme – A guide to fundraising for small organisations, 2011

Putting the grants where

they’re needed

Making grants go the furthest

Improvements to the application

process

EL

5%

30%

13%

17%15%

20%

Nothing <£100,000 £100,000-£150,000 £150,001-£300,000 £300,001-£500,000 £500,001+

All respondents

Income from grant-making trusts

Average income from grant-making trusts: £411,000

7 Base: 300 not-for-profit sector workers, Jan-Mar 2012 Source: Fundraising from charitable trusts in 2012, nfpSynergy

Q14: “What is your approximate total income from grant-making trusts (in the last 12 months)?”

Small charities rely the most on trusts income

£82,000

£283,000

£452,000

£978,000

Charities with less than 500k

total income

£501k - £2.5m £2.51m - £15m Charities with more than

£15.1m total income

Mean income from grant-making trusts

2%


Q14: “What is your approximate total income from grant-making trusts (in the last 12 months)?”

33%

Smallest charities % of income from trusts

Largest charities % of income from trusts

24%

3%

19%

10%

20%

15%

None Very little/ not

much

£500 or under £501-£1000 £1001-£5000 £5001+

All respondents

Average amount spent: £5,400


Amount spent on fundraising from grant-making trusts

Q14: “How much do you spend on fundraising from grant-making trusts, excluding staff salaries?”

Staff salaries for grant fundraising

11%

23%

15%

12%10%

6%

17%

Nothing £15,000 or under £15,001-£25,000 £25,001-£30,000 £30,001-£40,000 £40,001-£50,000 £50,001+

All respondents

Average amount spent on salaries: £36,000


Q14: “How much do you spend on staff salaries for people working on grant-making trusts?”

24%26%

27%

23%

None Less than 1 1 (1-1.49) More than 2 (1.50+)

All respondents

Few charities have large trust fundraising teams


Average number of staff: 1

Q14: “How many full-time staff (FTE) are devoted to grant-making trusts?”

Larger charities outperform smaller ones

12 Base: 279-307 not-for-profit sector workers, Jan-Mar 2012 Source: Fundraising from charitable trusts in 2012, nfpSynergy

All respondents

The largest charities

The smallest charities

Average grant income

£411,000 £978,000

£82,000

Average costs

(salary plus non-salary)

£41,600 £86,600

£13,800

Income per pound invested

£9.9 £11.3

£5.9

The story so far......

• Smaller charities much more dependent on grant-making trusts

• But smaller charities have the lowest return on investment

• What can grant-makers do to make sure funds reach those who need them most?


they’re needed



process

CM

Imagine a grant-making trust had just offered you £1 million as a grant for a restricted project…

15

…They then offer to give you a grant which you can spend on any of your work but for a lower amount than £1 million…

What is the smallest sum you would accept in place of the £1 million restrictive grant?

28%

7%

11%

8%

4%

15%

3%

5%

3%

18%

£1 million - same as the original grant

£900k

£800k

£700k

£600k

£500k

£400k

£300k

£200k

£100k

Base: 393 not-for-profit sector workers, Jan-Mar 2012 Source: Fundraising from charitable trusts in 2012, nfpSynergy

Charities are willing to accept lower grants in exchange for income being unrestricted

The average lower amount accepted for an unrestricted grant was £630,000

16

Q5: “Imagine a grant-making trust had just offered you £1 million as a grant for a restricted project. They then offer to give you a grant which you can spend on any of your work but for a lower amount than £1 million. What is the smallest sum you would accept in place of the £1 million restrictive grant? (please select one option only)”

£488,596.49

£621,978.02£666,666.67

£766,292.13

£0

£200,000

£400,000

£600,000

£800,000

£1,000,000

Charities with less than

500k total income



Mean score

But larger charities are far less concerned about getting core funding



£627,480.92 £643,636.36

£557,692.31£586,666.67

£527,272.73

£582,142.86

£0

£200,000

£400,000

£600,000

£800,000

£1,000,000

All respondents Medical/

Health/

Sickness

Overseas aid/

Famine relief

Disability Arts/Culture/

Heritage

Environment/

Conservation

Arts charities are eager for core funding, while medical charities are least concerned



“This is too hypothetical a question, as it entirely depends what the restricted project is - if it is of strategic importance then £1m restricted is as useful as £1m unrestricted.”

“I don't understand the question. Why wouldn't we accept the larger grant with the restriction?”

“Our clients need reliable and regular on-going support, they often tell us that it is far more valuable to them than short-term projects. This means that unrestricted funding - funding that we could use to sustain and improve these core services - is hugely valuable to us.”



Different perspectives on unrestricted funds

32%

29%

46% 28%

64%

65%

0% 20% 40% 60% 80% 100%

I think it would be/is very helpful when

grant-making trusts allow multiple

applications for different projects from the

same organisation

I would like grant-makers to provide more

funds that were unrestricted or grants for

core costs

I would like grant-makers to give better

feedback on applications

Agree Strongly agree

93% of respondents were keen for more unrestricted funds to be offered


Q7: “Please indicate how strongly you agree or disagree with the following statements by ticking the appropriate box”

42%

45%

48%

23% 10%

18%

25%

19%

0% 20% 40% 60% 80% 100%

I would like grant-makers to provide more

support other than grants (e.g. fundraising

training, business planning support, comms

advice, etc)

We often have to manipulate existing

projects to meet grant-makers' guidelines or

restrictions

I think the two-stage application process is a

big improvement over a single-stage

application process

I like online application processes

Agree Strongly agree

‘Grants plus’ less of a priority


Q7: “Please indicate how strongly you agree or disagree with the following statements by ticking the appropriate box”


• Smaller charities much more dependent on grant-making trusts

• But smaller charities have the lowest return on investment

• Potential win-win to make sure grants reach those who need them the most?

• Unrestricted is worth more than restricted for many organisations

• And particularly for smaller organisations and those from certain sectors

• Charities think they can make grant-makers money go further if it is unrestricted


they’re needed



process

EL

Application process a high priority for charities


Q15: “Which charitable trusts do you think should be role models for others and why?” NB Please refer to verbatim document for full comments.

Top 5 attributes

• Clear guidelines

• Easy, fast application process

• Good communications

• Relationship building

• Helpful, providing guidance

“Trusts that speak to the charities and help with the application process. Those that have good means of communication, encourage questions and exploration of relationship building.”

6%

12%

59%

11%

12%

0% 20% 40% 60% 80% 100%

No

restrictions/complete

flexibility

Few restrictions and

plenty of flexibility

Some restrictions

and some clear

flexibility

Quite clear

restrictions with only

very limited flexibility

Very clear restrictions


Charities want a mix of restrictions and flexibility in guidelines

Q9: “What would your preferred approach be to the restrictiveness or openness of a grant-making approach?”

“Trusts that give very vague guidelines about their priorities and receive lots of applications and then reject most of them are annoying and a waste of everyone's time.”

Reporting back on grants is working well

Q10: “In general, how difficult or burdensome is the reporting back on grants once awarded?”

2%

14%

53%

29%

1%

0% 20% 40% 60% 80% 100%

Not sure/ Don't know

Not at all difficult

Not very difficult

Quite difficult

Very difficult

Base: 416 not-for-profit sector workers, Jan/Mar 2012 Source: Fundraising from charitable trusts in 2012, nfpSynergy

Waiting for a decision

27

0%

0%

1%

57%

42%

0% 20% 40% 60% 80% 100%

Around a year

Around 9 months

Around 6 months

Around 3 months

A month or less

All respondents

Ideal time to wait for a decision on a grant application


Average ideal time to wait: 2.2 months

Q8: “What would be your ideal length of time for a decision to made on a grant application?” NB the scale on this slide is 100%, whereas it is 50% on most other slides.

Guidelines and criteria

Contact and relationships

Fund core costs, continuity

Feedback, acknowledge applications

Similar priorities from the Open Forum for charities

29 Base: 60 fundraisers, 27 March 2012 Source: Open Forum on fundraising from grant-making trusts, nfpSynergy

We asked the 60 fundraisers taking part in the Open Forum to divide into groups and write down ideas for improvements in fundraising from grant-making trusts. We then asked them to rank their suggestions according to how important they thought they were.

“Feedback is really useful and important. It would also cut down on pointless applications. Acknowledgement of a failed application would also help planning.”

But charities could do better too!

30 CM

Success rates for the sector as a whole could be improved


Q14: “How many grant applications would you say you make a year? (approximately)” and Q14: “How many applications would you say were successful in a year? (approximately)”

125

41

Average number of unsuccessful applications

Average number of successful applications

The average charity makes 166 applications a year, a success rate of 24.7%

38

300

110

258

116

12

71

30

55 54

Arts Culture Heritage Disability Environment

Conservation

Medical Health

Sickness

Overseas aid Famine

relief

Average number of grant applications per year Average number of successful grant applications per year

Different sectors have different success rates


Overseas aid and Famine relief had one of the highest success rates: 46%

Medical/ Health / Sickness had one of the lowest success rates: 21%


60

88

264

296

1124

55

93

Charities with less than 500k

total income



Average number of grant applications per year Average number of successful applications per year

While larger charities have a much higher success rate


Success rate for the smallest charities: 19%

Success rate for the largest charities: 31%



718

37

109

No FTE staff working with

grant fundraising

<1 1 (1-1.49) More than 2 FTE staff working

on trust fundraising

Mean number of successful applications per year

Q14: “How many applications would you say were successful in a year? (approximately)”

Professional fundraisers are crucial to the success of big charities

How charities can reduce the number of unsuccessful applications

35

Tailor applications to the trust

Avoid straying outside of guidelines

Consider collaborating with other charities


• Smaller charities much more dependent on grant-making trusts • But smaller charities have the lowest return on investment • Potential win-win to make sure grants reach those who need them the

most? • Un-restricted is worth more than restricted for many organisations • And particularly for smaller organisations and those from certain sectors • Charities think they can make grant-makers money go further if it is

unrestricted – potential win-win

• Huge number of applications made, with quite low success rates

• Small charities struggle to get through and have a particularly low success rate

• Cutting the number of hopeless applications: clear, accessible and up to date criteria and guidelines

Things to think about

Putting funds where they’re most needed

More unrestricted and

core funds

Less wasting of time and

resources on application

process



core funds



process



core funds



process

What to do next...

38 http://nfpsynergy.net/free-reports-and-presentations

Grant-makers’ perspective

2-6 Tenter Ground Spitalfields London E1 7NH 020 7426 8888 [email protected] www.twitter.com/nfpsynergy www.linkedin.com/company/nfpsynergy

www.nfpsynergy.net

Registered office: 2-6 Tenter Ground Spitalfields London E1 7NH. Registered in England No. 04387900. VAT Registration 839 8186 72

Appendix – Who responded?

Sample: 417 charity sectors workers

Methodology: We conducted the survey using an online questionnaire

Fieldwork: The fieldwork was conducted in-house by nfpSynergy

Fieldwork dates: 30 January 2012 – 9 March 2012

Methodology

41

7%

1%

1%

2%

2%

2%

3%

4%

4%5%

6%

7%

7%

8%

10%

11%

29%

A/o answers

Advice

Families/Family welfare

Justice/Rights

Religious activities

Elderly

Animals

Arts/Culture/Heritage

Relief of poverty/Social welfare

Economic/Community development/Employment

Education/ Training

Environment/Conservation

Overseas aid/Famine relief

Accommodation/Housing

Children/Young people

Disability

Medical/Health/Sickness

All respondents


Q2: “Which sector does your organisation primarily operate in? (e.g. animal welfare/environment/etc.). Please choose what best describes your sector.”

What sectors the respondents work in

34%

19%

13%

17% 17%

0-20% is restricted 21-40% 41-60% 61-80% 81-100% is restricted

All respondents

Percentage of restricted income


Q4: “What percentage of your income would you estimate is restricted in some way (e.g. comes from a grant-making trust, the Big Lottery or local or central government)?”

29%

11% 12% 11%10%

5%7%

5%

1%

10%

Less than

£500k

£501,000 -

£1m

£1.1m -

£2.5m

£2.51m -

£5m

£5.1m -

£10m

£10.1m -

£15m

£15.1m -

£25m

£25.1m -

£50m

£50m+ Not sure

All respondents

Income of the organisations taking part


Q3: “What is your organisation’s total income (approximately)?”

3%

3%

6%

8%

7%

10%

10%

35%

4%

7%

10%

7%

7%

11%

14%

18%

2%

3%

2%

4%

3%

1%

2%

1%

4%

1%

4%

Advice

Families/Family welfare

Justice/Rights

Religious activities

Elderly

Animals

Arts/Culture/Heritage

Relief of poverty/Social welfare

Economic/Community development/Employment

Education/ Training

Environment/Conservation

Overseas aid/Famine relief

Accommodation/Housing

Children/Young people

Disability

Medical/Health/Sickness

61-100% restricted income

0-60% restricted income

Sector of work by percentage of restricted income


Q2: “Which sector does your organisation primarily operate in? (e.g. animal welfare/environment/etc.). Please choose what best describes your sector.”

the hallmarks of a model grant-maker

Documents

trusts income

income frominvestments

respondentsaverage income

voluntary sectors total

grantedideal grantinterviews

research free report

grantsprivate sector1

open powerpointmaker