The hallmarks of a model grant-maker

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The hallmarks of a model grant-maker

  1. 1. The hallmarks of a modelgrant-maker in the eyesof charitiesCian Murphy and Elin LindstromDecember 2012
  2. 2. The research - Free report:STAGE 1 Survey, Taking nothing Finding what an telephone for granted ideal grant- interviews, open - Powerpoint maker looks like forum with presentation charities with detailed resultsSTAGE 2 Grant-makers’ Report in Interviews point of view January 2013
  3. 3. Finding new sources offunding in tough timesCM 3
  4. 4. Trusts income is still growing in the recession Individuals 14.3 Statutory services 13.9 Voluntary sector 1.3 2.1 Income from Investments 2.4 grants Private sector 1.6 0.6 Trading subsidaries National lottery 0.5Source: 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/ 4
  5. 5. Trust-fundraising sees quick rewards with high returnSource: Gimme, gimme, gimme – A guide to fundraising for small organisations, 2011 5
  6. 6. Putting the Improvements to grants where Making grants the application they’re needed go the furthest processEL
  7. 7. Income from grant-making trusts All respondents Average income from grant-making trusts: £411,000 30% 20% 17% 15% 13% 5% Nothing <£100,000 £100,000-£150,000 £150,001-£300,000 £300,001-£500,000 £500,001+Q14: “What is your approximate total income from grant-making trusts (in the last 12 months)?”Base: 300 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 7
  8. 8. Small charities rely the most on trusts 2% income Largest charities % of income from trustsSmallest charities £978,000% of income from trusts 33% Mean income from grant- making trusts £452,000 £283,000 £82,000 Charities with less than 500k £501k - £2.5m £2.51m - £15m Charities with more than total income £15.1m total incomeQ14: “What is your approximate total income from grant-making trusts (in the last 12 months)?”Base: 300 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 8
  9. 9. Amount spent on fundraising from grant- making trusts All respondents Average amount spent: £5,400 24% 19% 20% 15% 10% 3% None Very little/ not £500 or under £501-£1000 £1001-£5000 £5001+ muchQ14: “How much do you spend on fundraising from grant-making trusts, excluding staff salaries?”Base: 279 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 9
  10. 10. Staff salaries for grant fundraising All respondents Average amount spent on salaries: £36,000 23% 17% 15% 12% 11% 10% 6% Nothing £15,000 or under £15,001-£25,000 £25,001-£30,000 £30,001-£40,000 £40,001-£50,000 £50,001+Q14: “How much do you spend on staff salaries for people working on grant-making trusts?”Base: 290 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 10
  11. 11. Few charities have large trust fundraising teams All respondents Average number of staff: 1 27% 26% 24% 23% None Less than 1 1 (1-1.49) More than 2 (1.50+)Q14: “How many full-time staff (FTE) are devoted to grant-making trusts?”Base: 307 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 11
  12. 12. Larger charities outperform smaller ones All The largest The smallest respondents charities charities Average grant £411,000 £978,000 £82,000 income Average costs £41,600 £86,600 £13,800 (salary plus non- salary) Income per £9.9 £11.3 £5.9 pound investedBase: 279-307 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 12
  13. 13. 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?
  14. 14. Putting the Improvements to grants where Making grants the application they’re needed go the furthest processCM
  15. 15. Imagine a grant-making trust had just offeredyou £1 million as a grant for a restricted project……They then offer to give you a grant which youcan spend on any of your work but for a loweramount than £1 million…What is the smallest sum you would accept inplace of the £1 million restrictive grant? 15
  16. 16. Charities are willing to accept lower grants in exchange for income being unrestricted £100k 18% £200k 3% £300k 5% The average lower amount accepted £400k 3% for an unrestricted grant was £630,000 £500k 15% £600k 4% £700k 8% £800k 11% £900k 7% £1 million - same as the original grant 28%Q5: “Imagine a grant-making trust had just offered you £1 million as a grant for a restricted project. They then offer to giveyou a grant which you can spend on any of your work but for a lower amount than £1 million. What is the smallest sum youwould accept in place of the £1 million restrictive grant? (please select one option only)”Base: 393 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 16
  17. 17. But larger charities are far less concerned about getting core funding Mean score £1,000,000 £800,000 £766,292.13 £666,666.67 £621,978.02 £600,000 £488,596.49 £400,000 £200,000 £0 Charities with less than £501k - £2.5m £2.51m - £15m Charities with more than 500k total income £15.1m total incomeQ5: “Imagine a grant-making trust had just offered you £1 million as a grant for a restricted project. They then offer to giveyou a grant which you can spend on any of your work but for a lower amount than £1 million. What is the smallest sum youwould accept in place of the £1 million restrictive grant? (please select one option only)”Base: 393 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 17
  18. 18. Arts charities are eager for core funding, while medical charities are least concerned £1,000,000 £800,000 £627,480.92 £643,636.36 £586,666.67 £582,142.86 £600,000 £557,692.31 £527,272.73 £400,000 £200,000 £0 All respondents Medical/ Overseas aid/ Disability Arts/Culture/ Environment/ Health/ Famine relief Heritage Conservation SicknessQ5: “Imagine a grant-making trust had just offered you £1 million as a grant for a restricted project. They then offer to giveyou a grant which you can spend on any of your work but for a lower amount than £1 million. What is the smallest sum youwould accept in place of the £1 million restrictive grant? (please select one option only)”Base: 393 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 18
  19. 19. Different perspectives on unrestricted funds “This is too hypothetical a question, as it entirely depends “Our clients need reliable and regular what the restricted project is - if on-going support, they often tell us it is of strategic importance then that it is far more valuable to them £1m restricted is as useful as than short-term projects. This means £1m unrestricted.” that unrestricted funding - funding that we could use to sustain and improve these core services - is hugely “I dont understand the question. valuable to us.” Why wouldnt we accept the larger grant with the restriction?”Q6: “Imagine a grant-making trust had just offered you £1 million as a grant for a restricted project. They then offer to giveyou a grant which you can spend on any of your work but for a lower amount than £1 million. What is the smallest sum youwould accept in place of the £1 million restrictive grant? (please select one option only)”Base: 166 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 19
  20. 20. 93% of respondents were keen for more unrestricted funds to be offered Agree Strongly agree I would like grant-makers to give better 32% 65% feedback on applications I would like grant-makers to provide more funds that were unrestricted or grants for 29% 64% core costs I think it would be/is very helpful when grant-making trusts allow multiple 46% 28% applications for different projects from the same organisation 0% 20% 40% 60% 80% 100%Q7: “Please indicate how strongly you agree or disagree with the following statements by ticking the appropriate box”Base: 414-417 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 20
  21. 21. ‘Grants plus’ less of a priority Agree Strongly agree I like online application processes 45% 25% I think the two-stage application process is a big improvement over a single-stage 42% 19% application process We often have to manipulate existing projects to meet grant-makers guidelines or 48% 18% restrictions I would like grant-makers to provide more support other than grants (e.g. fundraising 23% 10% training, business planning support, comms advice, etc) 0% 20% 40% 60% 80% 100%Q7: “Please indicate how strongly you agree or disagree with the following statements by ticking the appropriate box”Base: 414-417 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 21
  22. 22. The story so far......• 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
  23. 23. Putting the Improvements to grants where Making grants go the application they’re needed the furthest processEL
  24. 24. Application process a high priority for charities Top 5 attributes “Trusts that speak to the charities and help with the • Clear guidelines application process. Those that have good means of • Easy, fast application process communication, encourage questions and exploration of • Good communications relationship building.” • Relationship building • Helpful, providing guidanceQ15: “Which charitable trusts do you think should be role models for others and why?” NB Please refer to verbatim documentfor full comments.Base: 198 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 24
  25. 25. Charities want a mix of restrictions and flexibility in guidelines “Trusts that give very vague Very clear restrictions 12% guidelines about their priorities and receive lots of applications and then Quite clear restrictions with only reject most of them are annoying very limited flexibility 11% and a waste of everyones time.” Some restrictions and some clear 59% flexibility Few restrictions and 12% plenty of flexibility No restrictions/complete 6% flexibility 0% 20% 40% 60% 80% 100%Q9: “What would your preferred approach be to the restrictiveness or openness of a grant-making approach?”Base: 413 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 25
  26. 26. Reporting back on grants is working well Very difficult 1% Quite difficult 29% Not very difficult 53% Not at all difficult 14% Not sure/ Dont know 2% 0% 20% 40% 60% 80% 100%Q10: “In general, how difficult or burdensome is the reporting back on grants once awarded?”Base: 416 not-for-profit sector workers, Jan/Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy
  27. 27. Waiting for a decision 27
  28. 28. Ideal time to wait for a decision on a grant application All respondents A month or less 42% Around 3 months 57% Around 6 months 1% Average ideal time to wait: 2.2 months Around 9 months 0% Around a year 0% 0% 20% 40% 60% 80% 100%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.Base: 417 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 28
  29. 29. Similar priorities from the Open Forum for charities “Feedback is really useful and important. It would also cut down on pointless applications. Guidelines and criteria Acknowledgement of a failed application would also help planning.” Contact and relationships Fund core costs, continuity Feedback, acknowledge applicationsWe asked the 60 fundraisers taking part in the Open Forum to divide into groups and write down ideas for improvements infundraising from grant-making trusts. We then asked them to rank their suggestions according to how important they thoughtthey were.Base: 60 fundraisers, 27 March 2012Source: Open Forum on fundraising from grant-making trusts, nfpSynergy 29
  30. 30. But charities could do better too!CM 30
  31. 31. Success rates for the sector as a whole could be improved The average charity makes 166 applications a year, a success rate of 41 24.7% Average number of 125 unsuccessful applications Average number of successful applicationsQ14: “How many grant applications would you say you make a year? (approximately)” and Q14: “How many applicationswould you say were successful in a year? (approximately)”Base: 289 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 31
  32. 32. Different sectors have different success rates Average number of grant applications per year Average number of successful grant applications per year 300 Medical/ Health / Sickness had one of the 258 lowest success rates: 21% Overseas aid and Famine relief had one of the highest success rates: 46% 110 116 71 55 54 38 30 12 Arts Culture Heritage Disability Environment Medical Health Overseas aid Famine Conservation Sickness reliefQ14: “How many grant applications would you say you make a year? (approximately)” and Q14: “How many applicationswould you say were successful in a year? (approximately)”Base: 289 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 32
  33. 33. While larger charities have a much higher success rate Average number of grant applications per year Average number of successful applications per year 296 Success rate for the largest charities: 31% 264 Success rate for the smallest charities: 19% 88 93 60 55 24 11 Charities with less than 500k £501k - £2.5m £2.51m - £15m Charities with more than total income £15.1m total incomeQ14: “How many grant applications would you say you make a year? (approximately)” and Q14: “How many applicationswould you say were successful in a year? (approximately)”Base: 289 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 33
  34. 34. Professional fundraisers are crucial to the success of big charities Mean number of successful applications per year 109 37 18 7 No FTE staff working with <1 1 (1-1.49) More than 2 FTE staff working grant fundraising on trust fundraisingQ14: “How many applications would you say were successful in a year? (approximately)”Base: 292 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 34
  35. 35. How charities can reduce the number ofunsuccessful applicationsTailor applications Avoid straying Consider collaboratingto the trust outside of guidelines with other charities 35
  36. 36. The story so far......• 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
  37. 37. Things to think about Less wasting ofPutting funds More time andwhere they’re unrestricted and resources onmost needed core funds application process
  38. 38. What to do next... Grant-makers’ perspective http://nfpsynergy.net/free-reports-and-presentations 38
  39. 39. www.nfpsynergy.net2-6 Tenter GroundSpitalfieldsLondon E1 7NH 020 7426 8888insight@nfpsynergy.netwww.twitter.com/nfpsynergywww.linkedin.com/company/nfpsynergyRegistered office: 2-6 Tenter Ground Spitalfields London E1 7NH. Registered in England No. 04387900. VAT Registration 839 8186 72
  40. 40. Appendix – Who responded?
  41. 41. MethodologySample:417 charity sectors workersMethodology:We conducted the survey using an online questionnaireFieldwork:The fieldwork was conducted in-house by nfpSynergyFieldwork dates:30 January 2012 – 9 March 2012 41
  42. 42. What sectors the respondents work in All respondents Medical/Health/Sickness 29% Disability 11% Children/Young people 10% Accommodation/Housing 8% Overseas aid/Famine relief 7% Environment/Conservation 7% Education/ Training 6% Economic/Community development/Employment 5% Relief of poverty/Social welfare 4% Arts/Culture/Heritage 4% Animals 3% Elderly 2% Religious activities 2% Justice/Rights 2% Families/Family welfare 1% Advice 1% A/o answers 7%Q2: “Which sector does your organisation primarily operate in? (e.g. animal welfare/environment/etc.). Please choose what bestdescribes your sector.”Base: 403 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 42
  43. 43. Percentage of restricted income All respondents 34% 19% 17% 17% 13% 0-20% is restricted 21-40% 41-60% 61-80% 81-100% is restrictedQ4: “What percentage of your income would you estimate is restricted in some way (e.g. comes from a grant-making trust, theBig Lottery or local or central government)?”Base: 408 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 43
  44. 44. Income of the organisations taking part All respondents 29% 11% 12% 11% 10% 10% 7% 5% 5% 1% Less than £501,000 - £1.1m - £2.51m - £5.1m - £10.1m - £15.1m - £25.1m - £50m+ Not sure £500k £1m £2.5m £5m £10m £15m £25m £50mQ3: “What is your organisation’s total income (approximately)?”Base: 415 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 44
  45. 45. Sector of work by percentage of restricted income 18% Medical/Health/Sickness 35% 14% Disability 10% Children/Young people 10% Accommodation/Housing 11% 7% 7% Overseas aid/Famine relief 7% Environment/Conservation 8% Education/ Training 6% Economic/Community development/Employment 10% 3% 7% 61-100% restricted income Relief of poverty/Social welfare 3% 4% 0-60% restricted income Arts/Culture/Heritage 3% Animals 1% 4% Elderly 4% 2% 1% Religious activities 3% Justice/Rights 4% 2% Families/Family welfare 1% 2% AdviceQ2: “Which sector does your organisation primarily operate in? (e.g. animal welfare/environment/etc.). Please choose what bestdescribes your sector.”Base: 403 not-for-profit sector workers, Jan-Mar 2012Source: Fundraising from charitable trusts in 2012, nfpSynergy 45

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