Richard Gutch Chief Officers Feb 2011

Funding Commission FUNDING THE FUTURE
A 10-year framework for civil society
Supported by NCVO
Sponsored by Capacitybuilders,
Joseph Rowntree Foundation and
Unity Trust Bank

Background to the Commission
Set up by NCVO in February 2009
Response to sector’s concerns and uncertainty about funding
Aim is to set a new funding agenda for the next 10 years
Report launched on 6 December 2010

Funding Commission members
Chair: Fiona Ellis, Interim Director, Philanthropy UK and former Director Northern Rock Foundation
Vice- Chair: Stephen Dunmore, Chair Capacitybuilders and former CEO Big Lottery Fund
Members comprise: Paul Amadi (Chair IoF), Dawn Austwick (Esme Fairbairn), Michael Brophy (Capital Community Foundation), Dinah Cox (Safer London Foundation), Claire Dove (Chair SEC), Toby Eccles (Social Finance), Brian Horner (Voluntary Norfolk) and John Low (CAF)

Approach
The Commission began work in February 2009 and signed off its report after the October 2010 Spending Review. Its work has included:
Initial consultation exercise with an on-line questionnaire
A call for evidence and meetings with interested parties
Interviews with over 100 experts in the field
Commissioned papers on key issues of interest
Theme papers on the website
Consultation meetings on draft recommendations.
These provide the evidence base for the report

Context- long term changes
An ageing population
A more diverse population and household structure
Development of new technology
Climate change
Ethical consumerism and social values

Context- more immediate changes
Public finance deficit reduction
The Big Society
Localism
Reform of public services
Transparency and accountability

Recent funding context
Public sector grants and contracts/fees (£12.8bn)
Trading on the open market (£8.3bn)
Individual giving (£7.8bn)
These three (=79% of charities income) accounted for nearly all the £10bn growth from 2000/01 to 2007/08

Current funding context
Public expenditure cuts
Reduction in trading on open market between 2006 and 2008
Reduction of 11% in individual giving between 2007 and 2009
Other income fairly steady so far

Two future scenarios
Pessimistic: public services cut to the bone; commercial organisations take over; CSOs overstreched and unsustainable: disadvantage increases.
Optimistic; radical changes to way public services are delivered; co-production with service users; new social contract; increased commercial and voluntary contributions; CSOs have been able to step up to the mark’
Heading for the first, but want to try and create the second. Four things need to happen to bring about the second scenario.

Four areas for action
CSOs must step up to the mark
Funders and commissioners of public services must make better use of current resources
NCVO must work with other infrastructure bodies to increase the sector’s income
The Government must also play its part.

CSOs must step up to the mark
Increasing impact
Increasing financial capability
Making better use of social media and technology
Promoting the value of CSOs to commissioners
More and better collaborative working
Developing sustainable and effective infrastructure

Funders and commissioners must make better use of existing resources
1. Increasing Impact Fund: BIG and other major funders should establish a fund of £5m p.a. for 3 years to help CSOs get better at developing, measuring and reporting on their impact
2. Financial capability programmes: The financial services industry and other funders should sponsor a series of financial literacy programmes (£2.8m over 3 years) for trustees and senior staff, led by the Charity Finance Directors Group

Making better use of existing resources (cont)
3. Investment of trust’ and foundations’ assets: The Association of Charitable Foundations should conduct a survey of its members’ social investment practice and develop guidance
4. Good grant-making: The ACF should also identify good practice in grant-making and promote it.

NCVO must work with other infrastructure bodies to increase the sector’s income
5. The Better Asking campaign: NCVO should work with the Institute of Fundraising and others to secure £10m from the commercial sector for a six year campaign aimed at improving fundraising, especially at the local level.
6. Trading up; NCVO and the Social Enterprise Coalition should secure £1.5m from a range of sources to develop better support for charities and social enterprises involved in trading to increase their access to finance, skills and markets

Increasing the sector’s income (cont.)
7. Mutual benefit with the commercial sector: NCVO, CAF and Business in the Community should secure £700k from the commercial sector for a 5 year programme aimed at expanding brokerage arrangements and developing the relationship between CSOs and SMEs at the local level.

The Government must play its part
8. Restructuring Fund: Government should establish a 3 year fund of £20m p.a. to support one-off costs involved in developing collaborative working; £5m p.a. should be earmarked for rationalising national, regional and local infrastructure
9. Big Society grants: Government should develop a series of small or micro light-touch grant programmes totalling £27m over 5 years, to support community initiatives.

Government (cont)
10. Commissioning for the future: Government should promote a user led approach to commissioning in its forthcoming White Paper, with greater emphasis on trust-based commissioning
11. Attracting new private capital: Government should use the Big Society Bank to develop and underwrite new mechanisms for attracting private investment such as Social Impact Bonds and Social Gilts

Government (cont)
12. Government endorsement: Government should endorse all the Commission’s recommendations and work with NCVO and others in taking them forward.

Costs
Increasing Impact Fund (£15m)
Big Society grants ( £27m)
Restructuring Fund (£60m)
Better Asking Campaign (£10m)
Other recommendations (£5.4m)
Total: £117.4m

Outcomes
Increased income for the sector (extra £11.3bn p.a. by 2020)
Increased social investment in the sector (extra £10bn private investment by 2020)
Increased efficiency/reduced costs
Wider social impact

Next steps
Full report and summary report, together with background papers and theme papers, all downloadable from http://www.ncvo-vol.org.uk/fundingcommission
NCVO will work with relevant infrastructure bodies and Government on implementing the recommendations, including securing the resources to implement them
Funding to be sought from Government, BIG, commercial sponsorship and trusts and foundations.

Thank you for listening

Richard Gutch Chief Officers Feb 2011

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