A modest proposal

This, from New Philanthropy Capital, is most interesting. As I have blogged previously, Trusts and Foundations have taken as big a hit as anybody from the credit crunch (though having suggested last November that grants may not fall quite as harshly as endowment values, at least for larger foundations, I might now recant that opinion.)

NPC float the idea that Trusts could borrow now in order to meet the increased needs of struggling charities, servicing the debt later when investment returns improve and demand decreases. (It's essentially a micro-version of the Government's response to the recession.) I hope that the good people of NPC won't mind my linking to their post, and reproducing my own thoughts here:

"The logic is clear. Borrow carefully now, to meet the increased demands of charities in these difficult times; pay back the loan with investment income/growth when times are better AND demands decrease. Sounds like a win-win.

It also sounds, perhaps unsurprisingly, like the "International Finance Facility" which Gordon Brown was trumpeting a few years back - sell bonds to increase overseas aid now, pay it back in future with aid budgets when the demands on those budgets consequently decrease. It's the epitome of a 'Keynesian' solution.

But it's a gamble. Just as the outcome of the present macro-economic policy is genuinely unclear at the moment, so one cannot be absolutely sure that demands on Trusts and Foundations will decrease sufficiently in future to enable debts to be serviced without eating away at much-needed grants funds.

It's also a slightly paradoxical proposal when I think that everybody would wish to see the voluntary sector grow - growth which would be stymied if Trusts had to use grant budgets to service debts.

It's therefore not a bad "emergency" policy, if, indeed, we're facing an emergency. A look at the balance sheets of the Trusts that I oversee suggests that it may well be - some, which are hundreds of years old, have lost 33% of their value in less than a year. Yet, even so, can I envisage the Trustees whom I serve taking such a step? Probably not - and I have been very successful over the past year at encouraging them to be radical!"

UPDATE: might another solution be to find some way of unlocking the funds of the many (often geographically restricted) foundations which struggle to find beneficiaries? In my experience, there are many that struggle to spend money - including some of those that I look after.

Often, these are smaller organisations, but I wonder if the Charity Commission couldn't accelerate their present encouragement of mergers and put forward a programme which would allow small grantmakers who struggle to spend their income a way of both liberalising their objects, and pooling their resources?

I wonder if this would have sufficient impact? Would smaller foundations be amenable to a "sledgehammer" policy which might diminish their identity, if the outcomes for beneficiaries were clear and substantial?

A year's worth of grantmaking stats

Applications: 4. Rejects: 4. Cups of Coffee: None. Have become a migraineur and suspect the dreaded bean has something to do with it (see below). Applications being considered by the Trustees this week: 15.

Note: even more interesting stats follow!

Hello, funding fiends. It rather seems as though I fell into that "hole" again, non? (See previous entry.) In point of fact I did; it was a hole filled with a propensity to develop truly debilitating migraines at times of stress, as well as my final postgraduate exams - a vicious circle if ever there was one.

But I have emerged, with a new found resolve to blog my experiences in the hope that they might be of interest - and help - to grant-seeker and grant-maker alike! Hurrah!

Having now complete a year in the job, it's an appropriate moment at which to hop back on the hobby-horse which led me here in the first place - the phenomenal waste of time and resources involved both in the preparation and the consideration of inappropriate applications, and how it can best be addressed for everybody's benefit.

The stark fact of the matter is this. Since I started collecting data (something never done by these Trusts before) some 89% of applications have not even gone before the Trustees. Acting on my presumed but legally-dubious delegated authority, I have considered that fully 380 applications were too divergent from our guidelines to be worth bothering the Trustees with.

The Trustees have rejected 24% (11) of the applications put before them, (representing 3% of the total number of applications) whilst 76% of applications which reached the Committee resulted in grants (representing 8% of the total received.)

So:

380 rejected outright
11 declined by the Trustees
34 grants

Grants have ranged between £500 and £50,000, have averaged £7,228.51 and have been tenable for between one and three years. We have also been seeking to be more "proactive"* - and 29% of grants, and 42% of the total funds granted have been given to organisations who we have sought out ourselves, through a growing network of impartial yet locally knowledgable contacts across our beneficial area and sectors.

(Fear not, for the Trustees are committed to retaining a substantial reactive capacity, and will continue to consider unsolicited applications.)

Dear fundraiser, you may weep - just as I have wept before. Dear grantmaker, you may well weep also - if you can muster enough oxygen from underneath the swell of proposals, letters and reports which festoon your office.

This is why I'm passionate about bridging the 'gap' between funder and funded. But herein lies a problem. I thought that the best route to this (besides starting this blog, naturellement) would be to ensure that all of the main fundraising websites and directories had accurate information about our guidelines, preferences and application processes.

Having contacted many and seen a noticeable (yet minimal) impact on the number of inappropriate enquiries, I have been waiting eagerly for the next edition of the Directory of Social Change's Directory of Grant-Making Trusts to be put together. Surely, this is the main source of information, and surely there must be some red-herrings in our current entries? Alas, no! Our current entries are disturbingly accurate.

All of this leads me to say once again: funders, be transparent about your preferences, and publicise them as widely as possible! And fundraisers: do your research! Make phone calls, go on the web. Our guidelines are now published on our website, and funders - if yours aren't, may I implore you that your immediate priority is to make sure they are?

Until next time, peace and success.

*You may like to know that in these matters we have been guided, in our strategic infancy, by the outstanding work of New Philanthropy Capital and NCVO.

They represent the two sides of the voluntary sector coin - funders and implementors respectively, and we have made an indelicate attempt to incorporate and to balance their highly-developed views and suggestions on how funding "works" best. Check 'em out.