DSC have just released new research on the number of grant applications made every year and the number of refusals. This supports their Great Giving campaign. The nub of the argument is that almost a million applications were received by foundations: over a third of these were ineligible – and therefore a waste of effort. But it’s also worth noting that a similar number were eligible, but unsuccessful So the first story for me is that broadly speaking two thirds of all grant applications are unsuccessful regardless of the reason.
DSC are right to highlight the waste caused by applicants failing to adhere to grant criteria. They offer sensible guidance to funders and applicants on how to minimise this. But I wonder if all this will produce is a shift in applications from the ‘declined – criteria not met’ to the ‘declined – insufficient funds for distribution’ category? To see what this future looks like, look at the stats for the UK Research Councils. They routinely don’t fund the best research proposals (rated as ‘alpha’) because there simply isn’t enough money to go around. By the way, if you think life stinks trying to get a grant from a foundation, try being an academic trying to get a grant from the ESRC: stats for their ‘responsive’ fund (which is open to any new proposal) are 16% – ie half the success rate for applications to foundations. But as the following example shows, lower success rates doesn’t necessarily imply wasted effort.
Is there a better way to deal with the number of ineligible applications? The increasing use of prize challenges, where only the outcomes are specified, might be that way. Have a look at one of NESTA’s new reports on ‘mass localism’. I think this is a great piece of work. It reports on their Big Green Challenge process, essentially a way of crowdsourcing innovation and grant funding the best ideas. In this case the innovations are about CO2, but the process below could work for any grantmaking foundation (see below).
The potentially interesting lesson on process for foundations is that the only criteria specified is outcomes – many of the applicants didn’t work in the field, some formed especially to apply. I cant find any rules about eligibility, so in that sense there weren’t any wasted applications. Some winners found the process so useful they carried through the projects despite not being funded.
Of 350 applications, 4 were successful: so one response might be that this is a terrible solution to the problem highlighted by DSC’s research. But these 4 winners shared a £1 million – i.e. they got grants of a sufficient scale to make a difference. I’m currently reading “Billions of drops in millions of buckets” by Steven Goldberg, in which he argues that philanthropy/grantmaking doesn’t mend social problems. One of his opening arguments is that scale is a problem: the average grant from a top 100 grantmaker is $50,000, an amount Goldberg argues is a small proportion of a typical nonprofit’s operating costs. If DSC’s research is right, then the average grant from the top 2,500 foundations in the UK is roughly £7,500.
So is the real problem not too many ineligible grants, but too many eligible – and successful – grants from foundations? And can we learn from NESTA about a more effective process to deal with this? Over to you.
Karl Wilding served as NCVO's chief executive from September 2019 to February 2021. 
