Since the foundation launched in 2020, we have seen a continual rise in the amount of grant applications we receive at each funding round. Anecdotally, we have seen more organisations applying that perhaps wouldn’t have been looking to trusts/foundations for support in the past. As an organisation with a stated aim to support grassroots organisations, this could well be seen as a good thing, but it does point to a worrying decline in the traditional fundraising methods these small, local groups were once able to depend on, along with an ongoing increase in operating costs.

Funders have been criticised – and continue to be – for a lack of transparency around how they make decisions over funding. In the past many trusts and foundations existed in a largely private world, but there is now far more interest in how their funds are both invested and awarded. The criticism is not without reason, as more transparency around grant assessment processes tends to lead to fewer and better quality applications, saving charities valuable time in applying for a fund that, in reality, they have little chance of securing. In 2006 Diana Leat wrote that “designing grant making processes (and the content of information required for grant decisions) is further complicated in a context in which there is growing emphasis on effectiveness, fairness and transparency.” A sentiment reflected in the rise of sector-led initiatives, like GrantAdvisor, GlassPockets and 360Giving.

The Association of Charitable Foundations views transparency as: “an amalgamation of attitudes, actions, behaviours and cultures that result in usable and accessible information being available for a variety of purposes to a variety of stakeholders.” While revealing an organisation’s approach to scoring proposals may be seen as a risk by some (leading to proposals written solely to match criteria rather than reflect reality), there are an overriding number of reasons to do so. It builds trust and legitimacy, promotes efficiency, improves decision making, enhances impact and results in more equitable access to information.

The conscious decision to be open across all areas of its work, from its funding practices to its investments is also linked to the legal responsibilities of charity trustees outlined by the Charity Commission and the Charity Governance Code. The benefits of this can be summarised as:

● Reduces and manages risk
● Creates an audit trail for recording decisions
● Provides clear and consistent criteria by which beneficiaries are selected
● Ensures appropriate use of funds in furtherance of the charities aims and objectives
● Helps to manage and prevent conflicts of interest and retain independence in decision making
● Provides clarity to the trustees over the focus, impact, risk, and organisational capacity of grantees and allows for informed decisions based upon this
● Maintains integrity and builds public trust by ensuring the charity delivers on its purposes and provides a public benefit

Grant assessment has been called both an art and a science, and even if a uniform way of making grant applications was agreed (a common source of frustration for fundraisers), it’s likely that agreeing a uniform way of assessing them would be even harder to achieve. Typically, this will involve a mixture of instinct/experience/chemistry blended more recently with mechanistic/systematic approaches, although how these are weighted will also vary greatly. This diversity is a constant theme as Foundation’s work across the non-profit sector, where there is considerable diversity across almost every measure, from the large nationwide charity working on complex societal challenges, to the small volunteer-led community group providing local support services. Clearly the right approach for one organisation will not always be right (or even feasible) for another.

Effective assessment of grant proposals extends beyond ‘a best practice’ model and is underpinned by a fundamental legal responsibility. Crucially, the Association of Charitable Foundations states that “far from being mere administrative processes, funding practices are the manifestation of mission through which applicants, funded organisations and other stakeholders view and interact with the foundation.” It is for this reason that we take this responsibility very seriously at our organisation and constantly look to where we can improve or develop it.

Research by Leat concluded that: “In order to provide a sound basis for grant-making, foundations must close the ‘knowledge loop’, feeding back into assessment, knowledge of the conditions under which projects are most likely to be successful, drawing on the knowledge of staff and assessors.” Leat suggested that foundations operate on a continuum in grant assessment, between the explicit (typically large organisations with high volumes of applicants and high accountability demands) and the tacit (smaller programmes, less accountability, and no codified assessment process). This is no surprise, some funders will have large professional teams, while others operate with a volunteer administrator and little else. We see the same diversity in the wider charity sector, so it should come as no surprise that no two foundations tend to look the same.

Julia Unwin, who wrote the brilliant (and freely available) book ‘Grant Making Tango’ said that achieving the holy grail of assessment approaches is impossible to reach but our aim for some time has been to move the Foundation towards the middle of Leat’s continuum, introducing a codified approach that can provide an explicit framework for the more tacit elements to be wrapped around. In the past we have used an assessment rubric to form the basis of a plenary discussion to do this.

This year is the first time we are formally introducing the data from the Indices of Deprivation Index into our grant assessment process, and we felt it was important to share some of the reasoning behind this and the methods we have in place.

Deprivation data is available for England, Wales and Scotland, and while it certainly doesn’t tell the whole story – there is a clear correlation between high levels of income deprivation in older people and loneliness/isolation. Research from NFP shows that more deprived areas have reduced social capital and are less likely to be served by charities. Although research has shown that people with lower incomes actually give more as a % of household income, charities in deprived areas will face greater challenges in recruitment, fundraising, and volunteer recruitment.

Of course, loneliness and isolation can impact anyone and we recognise this. An example of this is in relatively less deprived rural areas, where there is often little in the way of public transport or social opportunities within an easy walking distance. However, locations with lower levels of social capital and higher deprivation compound these issues, for example, people are more likely to be experiencing other chronic health conditions, greater concerns over personal safety and security, lower levels of social support, less discretionary income to spend on attending social events/activities, and – as mentioned above – fewer third sector organisations providing more inclusive options.

We were concerned that not reviewing local data for deprivation may lead to grant making that further exacerbated the divide between less/more deprived areas and that by prioritising charities with high volunteer levels and strong local support , we may inadvertently be widening this gap, rather than closing it.

For those reasons, we now ask every applicant for specific data on the geographic area they cover in their work.

Again, this isn’t straightforward – deprivation data is broken down by LSOAs (lower layer super output areas), whereas charities – particularly small ones – will rarely have exact data on where their service users live. There is rarely a neat crossover between the data and the areas charities tend to cover. However, we do have a good level of confidence that our methods are robust enough to use this data, and we are also able to look at the ranking for the local authority alongside this.

With limited funds available for distribution, we will be using the local deprivation data as one of our key factors in weighing up which applications go forward to the grants sub-committee. Regrettably, this does mean that there will be applications we would consider eminently fundable that won’t be progressed (although we won’t use deprivation data as our only criteria and will continue to review the evidence of need, impact, value for money, and alignment with our strategic aims). We don’t take these decisions lightly, we know ourselves how difficult it is for every charity out there working with older people, and that within any community there will be some folks in desperate need of their support. However, we did feel it was really important that we introduced a further objective criteria for our assessors to base decisions on and want to share this with all of our applicants, past, present and future.

This remains of course a learning process for us. We know it can be frustrating when grant funders change their criteria annually, and if this is done without good reason then that is understandable, but being reflective and learning in order to best fulfil the many benefits listed above, can sometimes mean this is necessary.

As always, Julia and myself are available to talk this over (we try to reply to everyone as best we can, but please be aware that during the grants rounds we receive a very high volume of emails).

[email protected]

[email protected]

Thank you,

Graeme

Head of Foundation