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The Future of Trusts, Statutory and Institutional Fundraising

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Funding

by Stuart Milliner - Trusts, Statutory and Institutional Fundraising specialist  

We have already seen some significant, dynamic shifts from funders to address the rapidly changing environment that charities are operating, but what do senior managers in Trusts, Statutory and Institutional funding think the future holds for their funding streams?

Emergency funding 

Emergency funding was made available almost instantly after the announcement of lockdown. This was crucial for charities to gain income at a critical time where huge amounts were lost from  Community, Events and Corporate fundraising. 

‘After all the incredible emergency funding that was made available so quickly in response to the  pandemic and lockdown restrictions, the biggest challenge as I see it, is how we fund the recovery  period and what role trusts and statutory bodies can play given they brought forward so much  funding’ – Senior Trusts Manager – National Youth charity 

Budgeting for this emergency funding is a hard task, especially when looking into next year. For those charities that received a good amount from funders, it’s realistic to consider that the same may not be available in the next financial year. It’s a concerning feeling to know that you have weathered the initial storm of COVID and now have a task of making up the funding that won’t be available next year, given that we will likely still be in the quagmire of COVID at that time.  

‘I am anticipating a dip in the funds available from trusts and statutory funding pots over the next  financial years, as we have 'borrowed' from future years to create emergency funds to take us  through the last six months’ – Trusts and Grants Manager – Children’s Mental health charity 

Relationship Management 

The main focus for TSI fundraisers moving forward is relationship management. Naturally, this was a  common practice prior to lockdown, but sector experts believe that this is going to be more important than ever before.  

There won’t be as much money available for new funding opportunities, so the focus will be on the funders that are already committed to your charity and ensuring those relationships are as strong as they can possibly be.  

‘Our emphasis, also our success, has come from working with those funders who have given to us previously. We have found through COVID that our closest funders have been more generous than before. We have simply been very clear and honest with our position; the response has been  tremendous’ – Head of Trusts – Children’s welfare charity 

Transparency in the sector has been incredibly important in recent years in light of some negative media attention. Numerous ‘Heads of’ have spoken to me about the incredible success they have had with warm funders. Being completely open and honest about the current challenges their charity is facing and the likely impact on beneficiaries has led to successful asks for additional support.  

Some great advice shared with me on this topic includes: making interactions with funders more personal; using case studies; being memorable and making sure you stick to your time frames.  

The extra bits you can be doing to strengthen these relationships will have more of an impact in the current climate, particularly as there will be more competition now than ever before.  

‘More one-to-one dialogue with funders (albeit virtual) and closer relationships, collaboration and engagement between trusts and charities. Greater competition will require more impact data,  business planning and evidence of need in applications. I suspect the most vulnerable communities  will attract most funding.’ Karen Ruskin – Head of Trusts and Foundations – Teenage Cancer Trust  

Diversifying funding and applications 

During COVID, funders have widened their goalposts and been open to more applications that may have fallen outside of their criteria previously. They have also been more open to digital applications.  

‘The biggest change I’ve seen is funders becoming more flexible e.g.: allowing charities to use  grants in different ways when projects have had to be cancelled, broadening their application  criteria, and more trusts accepting digital applications rather than paper postage, which was  essential when working from home during lockdown’ Faye Gunton – Trusts and Statutory Manager  – Asthma UK 

Considering how we have all had to adapt to a different way of working, it is safe to make an assumption that funders may permanently change how they receive applications. In much the same way as we have adapted to home working and flexible working, funders are becoming accustomed to primarily receiving digital applications.  

As well as the style of application, there is increased diversity in the organisations being funded. Historically, charities with strong reserves have missed out and charities with strong applications and without significant reserves have been prioritised. However, many charities have now had to dip into the reserves to stay afloat. Funders are aware of this and are now more inclined to fund those charities with reserves as this pandemic has outlined the importance of having that pot available.  

‘Previously, funders would potentially be more closed off to those charities with higher reserves.  Since the pandemic, funders have become more aware of the need for charities to hold reserves, to overcome crisis such as this, and therefore more open to offering funds to charities whose reserve  levels may have been deemed too high in years gone by. This is something that may continue in the future’. Kev Mounce – Trusts and Foundations Manager – Starlight Children’s Foundation

It has been a good period to see funders being more open to how the money is used at charities.  With a huge amount of programmes coming to a temporary end, allowing charities to spend their money with more flexibility has been important.

Regardless of the status of your funds or the style of your application, there are two things that are of primary importance to funders - case studies and clarity.   I spoke with a Grants Manager who has been in a very hectic role throughout COVID, his charity has been screening applications more frequently than ever before. He told me that case studies cannot be undervalued. There are some incredible stories about organisations adapting to meet their beneficiaries needs through COVID which should be heard. Working closely with your internal teams will only strengthen your work when putting together compelling applications. There is much to gain from regular communication with your programme teams, as they are the ones on the frontline with the benefactors of the charity’s services, and will be your source for case studies. 

Changing financial targets to KPIs 

At Charity People we work towards financial targets rather than KPIs. Given that there has been a downturn in income, it’s a difficult time to budget and set financial targets. KPIs are an alternative to setting the financial target for the year. It’s hard to predict a quantitative target at the moment and many organisations, like Charity People, have found other ways of  assessing performances.  

Should we continue to set financial targets for the short term or move to KPIs? It’s been a great question to put forward to a number of senior managers who are actively making this decision. 

‘We have changed the way we view success. Rather than risking the team falling short of targets,  we have created a method of assessing performance through such things as, quality prospects,  strengthening warm prospects, new business and more’ - Head of Trusts and Statutory –  International Development charity  

The worst thing at the moment would be to set fundraisers in your team unrealistic targets. Basing targets on the charity's spend simply shouldn’t happen. There should be a conversation with them to come up with something that is achievable. It may be worth looking at KPIs instead, some  examples could include: 

- How many new funders have been contacted? 

- Were there any solid prospects engaged this week/month? 

- How many warm funders have you spoken with? 

- What are you doing out of the ordinary to engage new or existing funders? 

It’s something worth considering as it can be a tool used for motivation as well as building confidence.  

Lastly, you should feel comfortable discussing your target with your line manager. It can be a tough conversation, but it’s particularly important to do so at this time. However, you should go into those meetings with evidence when re-assessing your targets. Ensure that the pipeline is clear and that future prospects are accounted for when speaking to your line manager. This may not apply to many, but for those who are in a situation where they feel the target is too ambitious at this time,  it’s worth considering.  

Moving forward

I was fortunate to speak with so many talented fundraisers from the sector when gathering this information. After hearing from these professionals, I have no doubt that we will come out of the other side of this stronger.  I hope you find this information useful and encourages you to have further conversations with your peers.  

If you would like to share any of your experiences or insights with me, please do not hesitate to get in touch.  

A big thank you to those who set aside time to speak with me and share their knowledge with all of us.

Stuart Milliner: LinkedIn, Charity People