Calling all funders: Five insights on how to help charities survive and thrive

Wouldn’t it be nice if increased funding resulted in stronger, more sustainable, and more resilient organisations? Even at the start of 2018, this is a question we still often ask ourselves. Good quality evidence of what actually works might lead to us having to ask that question less in the future.

Today we’re publishing the findings from our evaluation of the Local Sustainability Fund (LSF). This was a £20m programme funded by the Office for Civil Society and managed by the Big Lottery Fund, the largest funder of community activity in the UK. Today’s report examines what difference LSF made to the 257 organisations it funded, what worked, and what could have functioned better.

This report isn’t, however, just about the organisations who were funded through the programme. It tells us an enormous amount about how organisations – especially those that are smaller – can be effectively supported to become stronger and more resilient. The full report is available to read, but here I’d like to share five lessons that should be helpful for anyone with an interest in helping organisations to become more sustainable.

1. It’s the journey that’s important

Something that quickly became clear when talking to grant holders was that sustainability is not an absolute end point to be reached. Organisations receiving and offering support should instead recognise the multiple pathways that organisations go on as they seek operating models that work. We also found that the pace of change is often gradual – an important finding of the evaluation is that grant holders often wanted more time, not more money.

Much of this is about becoming more comfortable and effective in working with change. So rather than thinking ‘sustainability’ (with its implied exit strategies or magical shift to earned income), ‘resilience’ might be a better way of thinking about how organisations navigate a harsh environment.

2. Organisations need different types of funding at different stages of their life

All organisations are at different stages of their journey towards improved resilience. Some are considerably more advanced than others. We found that those organisations that were in relatively poor shape before LSF – those that were more volatile, and potentially a riskier prospect – benefitted more than those who were more stable. In other words, we found a familiar story of risk and return.

Funders offering support need to be clear about their risk appetite. They need to be clear about how they want to balance risk against the depth of impact they wish to see. We also found that tailoring interventions to the particular life-stage of the organisation being supported yielded greater impact.

3. If you trust organisations, they’ll achieve more

While LSF had funding criteria and boundaries, it placed considerable trust in the hands of its grant holders. They designed their projects and selected their external partners, while project monitoring and reporting was light-touch. This trust had an important role in helping the grant holders feel empowered and develop a real sense of ownership over their projects. We think that it probably helped to create more effective – and long-lasting – change. There’s a great deal of value in recognising that organisations themselves are best placed to articulate the problems that need to be tackled and – with the right support – lead the solutions.

4. That boring back office stuff is really important

An important pathway towards resilience observed in the evaluation was for organisations to focus on getting their internal systems and processes right first, then moving on to more externally-focused approaches. Addressing HR and finance procedures, or improving the way in which the board works with the senior staff team, can be a vital precursor to initiating new external partnerships or developing new services for traded income, for example. Moreover, this is about recognising that greater resilience is wider than getting more money and becoming bigger.

5. Effective interventions result from more than just money

Central to LSF was the external support provided to grant holders from local advisors and business partners. While there were some challenges to this element of the programme, the critical friend and mentoring role provided offered crucial external challenge, new perspectives on old problems, and encouragement to keep things moving. Organisations providing support have more to offer than just their money, and facilitating access to such input can make a huge difference. Equally, for this to be most effective, those organisations accessing support need to be comfortable with hearing difficult messages and accept the need to change.

Find out more

The full evaluation report is available to read and download now, as are a range of other resources, such as bulletins examining different findings in more detail and a series of case studies of organisations which received funding. I hope you enjoy reading these resources and find them useful, but I’d also love to hear what you think of them, and whether they resonate with your experience – so please do add any comments or thoughts below. And finally I’d like to say a huge thank you to all of the grant holders who’ve fed in to the evaluation over the past two years.