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Launch Seminar
Cathy Pharoah
31.03.2014
Research questions and approach
• With reducing statutory funds, what is current funding experience of small-medium organisations?
• What could help support income generation, and build a sustainable future funding base in NE?
Inter-relationship of factors affecting income generation
Design of research study
4 research strands
• review of research already carried out in the North East
• telephone survey of small-medium voluntary organisations, semi-structured, 20-minutes+
• follow-up in-depth interviews with 20 representative survey participants
• interviews with senior executive staff in 9 public and voluntary sector infrastructure agencies.
Main research topics
• organisations’ income, activity, geographical remit, funding sources
• current funding experience, outlook and mix
• trends in service demand
• approaches to fundraising/income generation; engagement in planning and review
• role of Board and trustees in income generation; resources for change; new initiatives.
Sample for survey
• organisations with incomes below £3 million
• frontline community, youth or welfare services
• purposive sample - with any previous contact with GWF, and equivalent sample selected from Register
• 48% response rate, split evenly between ‘previous contact’ (96), and ‘non-contact’ (86) groups.
Funding environment
• 86% said there was a particular need to strengthen fundraising/ income generation in NE at present
• 64% said government cuts had affected their income
Current income and future expectations
Average income by future income expectation
Activities by income band
“there’s not enough funders for our type of charity – our transport helps lunch clubs, schools, elderly and
disabled. There really needs to be a change in funder attitude. Projects that provide vital support to communities
week in, week out, can’t be dressed up as new – they’re old but successful…a youth group has been using our
minibuses for years twice weekly – funders can’t see the value in sustaining that, in our kind of deprived area.”
Sub-region infrastructure gaps?
Main (>25%) sources of current funding
Average number of funding sources 6
• 86% get income from at least one statutory source
• >half funded by quangos, partnerships, landfill tax, lottery
• 76% get funding from foundations
• 38% get funding from Big Lottery
• few ‘main’ sources
Trends in service demand
Current funding mix
Around 1/3 had done little/nothing about change: 2/3 (particularly large) said a review or change underway
Change in resources for income generation
Mixed capacity around income generation
• Majority say income generation is a priority, and an organisation-wide responsibility
• Almost 75% say there is a culture of change
• 79% say they have the knowledge/ expertise to change
• Two-thirds have a documented strategy
• Two-thirds said confident of income generation ability: 25% were not
We’ve had to change
everything that we do,
other than the very,
very, frontline work
Trying to get core costs
• Core costs – 82% said more difficult than getting project costs
Budgeting for core costs – an area of confusion?
“The reason that mitigates against full cost recovery is that they want to help
people…by putting in bids (that take) advantage of opportunities that will make
things happen quickly.. So rather than quibble about full costs, they will loan out
workers for a fee rather than the full cost of that time. And they don’t want to start
profiting by charging £20 per hour when the actual cost to them is £12 per hour.”
• 62% said they build core costs into budgets; 25% did not
• Lack of clarity about core costs eg photocopying, IT, Investors in People
• Reluctance to start charging if they have not done it historically
Role of trustees
• Generally trustees had little experience of income generation or fundraising
• Variety in recruitment practice, ease, success in recruiting – fundraising not a priority
• Some feel that to change approach, they would need different trustee skills, attitudes
..it’s very difficult (to be entrepreneurial) when we have a group of trustees who
are relatively risk-averse. So when you are looking at a brand new social
enterprise initiative that perhaps needs a lot of development money and might
not in the end pay dividends, there is some reluctance to fund those initiatives.
Likelihood of approaching foundations
“We probably feel more confident with more regional funders, like funders based in the
North East, because it’s highly likely that we’ve got some sort of relationship with them
Resources needed to build income generation
• Just under half (47%) felt their organisation did not have sufficient staff time
• Over one-third (35%) felt the organisation did not have sufficient finance to invest in it
Coping with change
Some
models
Challenges of new enterprise activities
“We have in the past had approaches (to make use of our facilities), but usually it isn’t worth the
extra time and effort…..people wanted them for nothing….why should we pay a charity?
It was the same with a minibus: I sought a mileage charge that reflected maintenance etc, and
nobody wanted to pay… We came to the conclusion that trying to do this..had the potential for
‘mission drift’ .. a distraction, and would not earn additional worthwhile income.”
“We have looked at income generation and possibly ‘selling on’ our services. An employer wanted
us to provide financial capability training to their staff. It seems the nature of what we do, but
with the complexity of this area, the supervision which staff needed to be fully trained, the
administration, suitable premises etc, this just could not work…….it’s a distraction.
We have also looked at community fund-raising projects, and this could be developed but it’s
fizzled out a bit, due to capacity constraints.”
Conclusions from research
• Shortfall in maximising potential support from foundations is not an isolated issue, but related to:
o sector capacity and infrastructure region-wide
o the stretch on internal resources to meet the changes in demand and in available funding
o time, new skills/expertise/relationships needed to put funding/service delivery on new footing
o exacerbation of problems, some of which are not new, in the current context
• Polarisation between those which have successfully adapted, and those coming to terms with change
• Scale of resources is a risk factor
• Organisations see their greatest strength as their service delivery, and feel this should be enough
• Organisations at different stages in change process have different support needs
What might help strengthen the resource base?
Establishing more local connections to build knowledge and confidence around applying
Reviewing application procedures seen as barriers - criteria around reserves; complexity and
detailed outcomes data required in applications; rules on what can be funded, part-funding
Building infrastructure in geographical areas whose existing voluntary infrastructure seems weak
Individual core/development support for transition to new ways of operating, generating income or
delivery, not tied to specific project delivery and outcomes
Flexible income generation advice and support, led by organizational need/stage in transition
• ‘safe’ places to develop embryonic ideas, or review progress of initiatives already in place
• expertise/analysis re assets, business plans, budgets, potential markets
• locally-based trustee and board development
• support for mentoring, knowledge-sharing and partnering by successful models
• building the skills /knowledge base around philanthropic income generation
Some re-balancing of grants from project to core/development may be essential
Increase in available grant funding/ raising awareness amongst funders

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An insight into funding in ne slide presentation - cathy pharoah 31.03.14

  • 2. Research questions and approach • With reducing statutory funds, what is current funding experience of small-medium organisations? • What could help support income generation, and build a sustainable future funding base in NE? Inter-relationship of factors affecting income generation
  • 3. Design of research study 4 research strands • review of research already carried out in the North East • telephone survey of small-medium voluntary organisations, semi-structured, 20-minutes+ • follow-up in-depth interviews with 20 representative survey participants • interviews with senior executive staff in 9 public and voluntary sector infrastructure agencies. Main research topics • organisations’ income, activity, geographical remit, funding sources • current funding experience, outlook and mix • trends in service demand • approaches to fundraising/income generation; engagement in planning and review • role of Board and trustees in income generation; resources for change; new initiatives. Sample for survey • organisations with incomes below £3 million • frontline community, youth or welfare services • purposive sample - with any previous contact with GWF, and equivalent sample selected from Register • 48% response rate, split evenly between ‘previous contact’ (96), and ‘non-contact’ (86) groups.
  • 4. Funding environment • 86% said there was a particular need to strengthen fundraising/ income generation in NE at present • 64% said government cuts had affected their income
  • 5. Current income and future expectations
  • 6. Average income by future income expectation
  • 7. Activities by income band “there’s not enough funders for our type of charity – our transport helps lunch clubs, schools, elderly and disabled. There really needs to be a change in funder attitude. Projects that provide vital support to communities week in, week out, can’t be dressed up as new – they’re old but successful…a youth group has been using our minibuses for years twice weekly – funders can’t see the value in sustaining that, in our kind of deprived area.”
  • 9. Main (>25%) sources of current funding Average number of funding sources 6 • 86% get income from at least one statutory source • >half funded by quangos, partnerships, landfill tax, lottery • 76% get funding from foundations • 38% get funding from Big Lottery • few ‘main’ sources
  • 11. Current funding mix Around 1/3 had done little/nothing about change: 2/3 (particularly large) said a review or change underway
  • 12. Change in resources for income generation
  • 13. Mixed capacity around income generation • Majority say income generation is a priority, and an organisation-wide responsibility • Almost 75% say there is a culture of change • 79% say they have the knowledge/ expertise to change • Two-thirds have a documented strategy • Two-thirds said confident of income generation ability: 25% were not We’ve had to change everything that we do, other than the very, very, frontline work
  • 14. Trying to get core costs • Core costs – 82% said more difficult than getting project costs
  • 15. Budgeting for core costs – an area of confusion? “The reason that mitigates against full cost recovery is that they want to help people…by putting in bids (that take) advantage of opportunities that will make things happen quickly.. So rather than quibble about full costs, they will loan out workers for a fee rather than the full cost of that time. And they don’t want to start profiting by charging £20 per hour when the actual cost to them is £12 per hour.” • 62% said they build core costs into budgets; 25% did not • Lack of clarity about core costs eg photocopying, IT, Investors in People • Reluctance to start charging if they have not done it historically
  • 16. Role of trustees • Generally trustees had little experience of income generation or fundraising • Variety in recruitment practice, ease, success in recruiting – fundraising not a priority • Some feel that to change approach, they would need different trustee skills, attitudes ..it’s very difficult (to be entrepreneurial) when we have a group of trustees who are relatively risk-averse. So when you are looking at a brand new social enterprise initiative that perhaps needs a lot of development money and might not in the end pay dividends, there is some reluctance to fund those initiatives.
  • 17. Likelihood of approaching foundations “We probably feel more confident with more regional funders, like funders based in the North East, because it’s highly likely that we’ve got some sort of relationship with them
  • 18. Resources needed to build income generation • Just under half (47%) felt their organisation did not have sufficient staff time • Over one-third (35%) felt the organisation did not have sufficient finance to invest in it
  • 20. Challenges of new enterprise activities “We have in the past had approaches (to make use of our facilities), but usually it isn’t worth the extra time and effort…..people wanted them for nothing….why should we pay a charity? It was the same with a minibus: I sought a mileage charge that reflected maintenance etc, and nobody wanted to pay… We came to the conclusion that trying to do this..had the potential for ‘mission drift’ .. a distraction, and would not earn additional worthwhile income.” “We have looked at income generation and possibly ‘selling on’ our services. An employer wanted us to provide financial capability training to their staff. It seems the nature of what we do, but with the complexity of this area, the supervision which staff needed to be fully trained, the administration, suitable premises etc, this just could not work…….it’s a distraction. We have also looked at community fund-raising projects, and this could be developed but it’s fizzled out a bit, due to capacity constraints.”
  • 21. Conclusions from research • Shortfall in maximising potential support from foundations is not an isolated issue, but related to: o sector capacity and infrastructure region-wide o the stretch on internal resources to meet the changes in demand and in available funding o time, new skills/expertise/relationships needed to put funding/service delivery on new footing o exacerbation of problems, some of which are not new, in the current context • Polarisation between those which have successfully adapted, and those coming to terms with change • Scale of resources is a risk factor • Organisations see their greatest strength as their service delivery, and feel this should be enough • Organisations at different stages in change process have different support needs
  • 22. What might help strengthen the resource base? Establishing more local connections to build knowledge and confidence around applying Reviewing application procedures seen as barriers - criteria around reserves; complexity and detailed outcomes data required in applications; rules on what can be funded, part-funding Building infrastructure in geographical areas whose existing voluntary infrastructure seems weak Individual core/development support for transition to new ways of operating, generating income or delivery, not tied to specific project delivery and outcomes Flexible income generation advice and support, led by organizational need/stage in transition • ‘safe’ places to develop embryonic ideas, or review progress of initiatives already in place • expertise/analysis re assets, business plans, budgets, potential markets • locally-based trustee and board development • support for mentoring, knowledge-sharing and partnering by successful models • building the skills /knowledge base around philanthropic income generation Some re-balancing of grants from project to core/development may be essential Increase in available grant funding/ raising awareness amongst funders