Potential of Institutional Funding

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Potential of Institutional Funding

  1. 1. UK Institutional Funding Potential or How to make more out of less… Lysa Ralph, Head of Programme Funding
  2. 2. What we will cover…> Definitions, purpose, methodology> Key trends, academic discourse> Results and benchmarking> Findings from external consultations> Recommendations> Questions & sharing your approach
  3. 3. Definitions> Institutional Funding (IF) = funding from governmental donors and those with similar behaviour and requirements e.g. Comic Relief and Big Lottery Fund> Grants and contracts, UK (central, devolved & local government) and European Commission
  4. 4. Purpose: terms of reference> Establish the size of the Institutional Funding market and the British Red Cross’ position> Learn from our own and others’ success and failure> Identify best practice in the sector> Identify routes in, trends, risks and opportunities towards diversification and growth of IF income
  5. 5. Methodology1. Desktop benchmarking, 41 charities, selected as comparators, within top 50 income > Together, they accounted for 13% (£1.5bn) of the £11.9bn public funding to charities 2010 > Income 2006-2011 analysed > Divided into three groups: mainly IF, mainly ‘other’, equal mixture of funding2. Qualitative surveys with nine organisations3. Internal consultations
  6. 6. Trends and academic discourse> Shift away from grants to contracts: > 2001 grants worth £4.6 billion, contracts £3.8 billion > By 2008, grants worth £3.7 billion, £9.1 billion worth of contracts> Development of full cost recovery principles to account for ‘hidden’ costs> Increase in ‘payment by results’; Social Return on Investment / Social Impact Bonds> Polarisation of the sector, consortia development> Need to evidence outcomes / impact> Increase in competition> Over dependency on the state
  7. 7. Trends and discourse> Variation in government: spending on health and education in devolved gov’ts higher than England: > Wales 8% reduction in revenue > Scotland and Northern Ireland 7% (2011-15)> Compares to UK central gov’t cuts of 19%, local authority cuts 26%> Lottery has followed a totally different trajectory, ticket sales highest ever in 2011, Olympics cash coming back in. Higher spend in 2011, set to continue> European Commission’s proposed budget for 2014-2020 is €1,025 billion, a 5% increase on the last cycle
  8. 8. Topline results> Despite the cuts, Institutional funding to charities increase of 4%> Current UK government following trend since 2001, where state funding to the voluntary sector far outpaced general growth in government spending
  9. 9. Institutional Funding - Top 10 Charities> ……………….………………….………no British Red Cross 
  10. 10. External surveys - participantsGrateful thanks to:Action for Children, Alzheimer’s Society, Age UK,Centrepoint, Mencap, National Trust, The PrincessRoyal Trust for Carers (now the Carer’s Trust) , Scopeand University College London (UCL)……………………………who took part in our survey
  11. 11. External survey: findings & recommendations > Invest in programmatic infrastructures, build an evidence base > Value for money / SROI modelling > Involvement of beneficiaries at all levels > Develop a partnership culture and strong governance > Hone your offer > Added value, don’t forget those ‘in kind’ inputs
  12. 12. External survey: key findings> Most comparators joined up Trusts & ‘Statutory’> Join up between policy, advocacy and fundraising> Engagement plans for Institutional donors> Integrate funding with service planning, tactical funding planning> Select only the strongest fit programmes with measurable changes for beneficiaries> Clear roles and responsibilities between teams and management of expectations
  13. 13. Other tips…> Assessors / advice line: make friends, use their advice during application development, ask questions> Budgeting: NVCO’s historical ‘Compact’ with government on full cost recovery– try & include match> ‘Best practice?’: e.g. for Lottery £300k+ grants - ‘needy’ project, strong project design responding to need / experience / partnerships> Triumph and disaster: treat failures as a learning opportunity, assessment reports , talking to others> Programme cycle approach: invest in fundraiser’s skills / knowledge in this area, spend time shadowing service colleagues> Balance: avoid over reliance on one source of funding
  14. 14. Narrative Objectively Means of Assumptions Summary Verifiable Verification / /Risks Indicators evidenceGoal =LotteryoutcomesProject aim Outcome SMART targetsOutcomes Outputs Lottery planningActivities Inputs Costs Aim triangle Logframe Outcomes Working out the donor’s system Activities
  15. 15. Questions… sharing your approach??Training courses BOND – project planning using a logical framework / impact assessment etc Charities Evaluation Services – developing your own indicators and outcomes Donor workshops …others? Lysa Ralph lralph@redcross.org.uk 020 7877 7094

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