This document discusses different types of funding available to voluntary and charity organizations, including gifts, grants, contracts, and open market income. It notes the current trends away from grants towards contracts with government. It also outlines some common misconceptions around funding. The document aims to provide a realistic overview of funding opportunities and challenges, and suggests organizations consider diversifying their income sources rather than relying on any single type.

1. “The Funding Pick n’ Mix”
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Ged Simpson
Capacity Building Manager
LCVS

2. Whilst every effort has been
made to ensure accuracy,
Liverpool Charity and Voluntary
Services accept no liability for
any loss suffered as a result of
following any advice contained
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in this document.

3. “Today I will solve all your
funding problems in 45 mins…
…and have time for questions”
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“Yeah, whatever !”

4. Let’s start with some more realistic
truths….we will look at
• Some current messages you hear
• Where are you now?
• Types of income – pros and cons
• Next steps
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Confusing messages?
“Well they all need to become social enterprises”
“As the state contracts there will be more opportunities for
contracts with local and central government”
“We need to seek more donations and legacies”
“You can’t keep relying on grants”
“Just follow a sustainable business model like the private sector”
“Can’t you merge and cut your costs?”

6. Social Entrepreneur or charity worker ?
Social entrepreneur :“a person who establishes an enterprise with the aim of solving social
problems or effecting social change” (Oxford Dictionary)
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Charity worker………………..any different ?

7. A quick snapshot
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8. Funding of VCF Sector - National Trends
• 11.1 billion in contracts and received £2.6 billion in grants in
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2011/12.
• 80% of the government funding now in the form of contracts
for delivering services rather than grants to support their
work, compared to 49% in 2000/01.
• Grant income has fallen in real terms, and this has been most
pronounced in grants from local government. Those grants
decreased in real terms by 53%

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National trends
Grant income from central government over the same period fell
by only 4%, to £1.7billion.

10. National trends – by size of organisation
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65%
proportion of micro organisations’
income from individuals’ donations
Source : NCVO UK Civil Society Almanac and NCVO/ The Third Sector Research Centre

12. Your partners/competitors views
93% of fundraisers reported that the climate has got tougher over the
last twelve months
58% of charities reported Government measures had a negative impact
on levels of funding
50% had taken steps to reduce wages and salary costs
85% were exploring new fundraising options
21% had merged or were considering merging
63% are considering or planning to draw on reserves
67% of respondents reporting an increase in demand 2012 and 72%
expecting a higher demand for services in 2013
Donor attrition has improved since last year. 14% fewer charities
reported an increase in attrition
55% had increased trading or social enterprise activity since the start of
the downturn
Institute of Fundraising/the Charity Finance Group
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Diversity of income
– an old old concept ?
What’s out there ?
• Gifts
• Grants
• Contracts
• Open market

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Gifts
Donor relationship ?
Gifts made to further the mission of the organisation.
e.g. community fundraising, individual giving, regular
donations, philanthropy, corporate support, legacies and
much more.
Often this income is unrestricted, as the donor trusts the
organisation to use the money to achieve its aims

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Grants
Funder relationship ?
Restricted funding to deliver specified outputs or mutually
agreed outcomes.
Most often there is an application process,
The funder has clear expectations about what will be
achieved and they will monitor how the grant is used.

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Contracts
Purchaser relationship ?
Payment for provision of products or services according to
agreed terms with a third party purchaser from the public,
private or voluntary sectors.
There is usually a competitive tendering process at the start
and contract management throughout to check that the
objectives are being achieved.

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Open market
Customer relationship?
Selling products or services to customers, not as part of a
long-term structured contract.
The open market includes trading and enterprise activity such
as providing education, training, paid-for advice, selling
publications or other retail.
Trading can directly further the organisation’s mission or can
be purely to generate profit. Any surplus income is
unrestricted.

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Gifts
• Opportunities
• Challenges
• The way in

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Grants
• Opportunities
• Challenges or barriers
• The way in

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Contracts
• Opportunities
• Challenges or barriers
• The way in
Google : The Chest

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Open Market
• Opportunities
• Challenges or barriers
• The way in

22. Conclusions – by way of clichés!
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“Eggs all in one basket”
Not the wisest – crisis to crisis
“Horses for courses”
Not every income source works for every organisation but others can surprise
you
“In my day…..”
Was there a golden age of funding ?
“It’ll change once this lot are out…………”
Not getting into that debate but will it ?
“Ummm………may have a look at that”
Have you explored what possibilities there are?

23. LCVS Capacity Building Team
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info@lcvs.org.uk
0151 227 5177
www.lcvs.org.uk