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Supporting Scotland's vibrant voluntary sector

Scottish Council for Voluntary Organisations

The Scottish Council for Voluntary Organisations is the membership organisation for Scotland's charities, voluntary organisations and social enterprises. Charity registered in Scotland SC003558. Registered office Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB.

Fair Funding: Collaborate, Challenge, Change - The Gathering 2022

Context

The Fair Funding – Collaborate, Challenge, Change event at this year’s Gathering was organised by SCVO and our Strengthening Collaboration partners (the Scottish Government, COSLA & the TSI Network). The event brought together leaders from across the sector to look at learning from the pandemic, share inspiring stories of collaboration, look at what we got right & what we didn’t, and pinpoint what the sector needs from funders in order to be secure.

Attendees were given the opportunity to hear from Neil Ritchie, Director of the National Lottery Community Fund, and Carolyn Sawyer, Chief Executive of the Corra Foundation, on the topic of fair funding, before the focus of the event turned towards discussions around each table.

Within groups there was a mixture of voluntary organisations and funders, with the facilitated discussion focussing on areas of key learning and action plans looking at how best to collaborate going forward, identifying challenges and highlighting what we need to do as a community to overcome them. The overarching driver was to build more trust between voluntary organisations and funders to achieve a fairer funding environment.

These discussions focussed on SCVO’s four priority themes of fair funding – multi-year funding, flexible funding, accessible funding, and sustainable funding – and sought to understand what each of these areas means to sector organisations and funders alike. After being allocated one of the four priority themes, groups were asked to consider what the theme meant to them, what barriers to success they felt existed, and what would need to happen to overcome those barriers and make efficient progress.

Image shows a word cloud containing the first two words that come to mind when they think about “fair funding”. The main words displayed as the largest are, accessible, long-term, unrestricted, flexible.
Word cloud: Attendees were asked for the first two words that come to mind when they think about “fair funding”.

Summary

Before the discussions took place, each group was given information on what we at SCVO mean by each of our four priority areas. In short, these are:

  • Multi-Year Funding – Longer-term funding models in place of the common annual cycle.
  • Flexible Funding – Unrestricted or core funding, as well as greater flexibility from funders.
  • Sustainable Funding – Specific measures and approaches to ensure funding is sustainable, such as full cost recovery and inflationary uplifts.
  • Accessible Funding – Accessible applications and funding processes.

For those discussing multi-year funding, there was widespread agreement that, without it, there is a lack of security and stability which results in an inability to plan for the future and difficulties with retaining staff members. There was agreement that there exists a culture within the funding world that focusses on yearly budgets, which is detrimental to the voluntary sector, particularly disadvantaging small and medium organisations. Suggestions to overcome this included better communication and stronger relationships with funders, with a particular focus on developing trust.

For flexible funding, it was clear that there exists a frustration within the sector that funders do not seem to understand the importance of core or unrestricted funding and how, without it, there can be no projects or services. It was suggested that, if funders had more trust in the sector’s use of funds, they would perhaps provide more unrestricted funding. It was also highlighted that the pandemic had already proven quite effectively that funders can be flexible if they choose to be. Across groups, there was a desire for stronger relationships and greater partnership working to achieve more flexible funding and funding practices.

With regards to sustainable funding, attendees highlighted a need for a long-term vision from funders, allied to greater support provided to organisations. The necessity of inflationary uplifts in order to avoid real term cuts to funding was recognised, as was the need for more opportunities for full cost recovery. There was a suggestion that, again, a lack of understanding on the part of funders had a detrimental part to play, and there was even discussion around anxiety when approaching funders to discuss some of these aspects. In many groups, there was a desire for more open relationships with funders, and events organised specifically designed to improve that dialogue.

When discussing accessible funding, it was agreed that application processes were too long and complex. A need for timely, inclusive, and straight-forward applications was highlighted, as was the necessity for more clarity and clearer guidance. There were also discussions around the need for funders to provide more innovative, creative application processes, rather than the ongoing focus on restrictive forms. Again, better communication was cited as a requirement in working towards more accessible funding, with some attendees expressing a reluctance to provide feedback to funders on overly complex processes for fear of souring their relationships.

With each group providing a variety of experience and insight, the event generated a great deal of valuable discussion – both in terms of reinforcing what we believe are key aspects of ensuring fair funding and providing an opportunity for fresh new ideas and viewpoints to be discussed. As expected, each priority area discussed brings with it its own unique barriers and potential solutions, but what appears to tie them all together is a real desire on the part of the voluntary sector to build worthwhile and collaborative relationships and partnerships with funders. Be it multi-year or flexible funding, sustainable or accessible funding, effective and productive communication with funders was both a key necessity identified for each. It appears that only by building those relationships with funders can we really move forward in achieving fair funding for Scotland’s voluntary sector.

The image is of an illustration produced by the Floating Designer. It displays and artistic representation of the session on Fair Funding, which is explained in full detail in these notes.
Floating Designer: Artistic representation of the session, designed by the Floating Designer (www.floatingdesigner.com).

Views on fair funding

Multi-year funding

For the groups discussing multi-year funding, there were some consistent views regarding its benefits and importance. Sustainability for staff, with skilled individuals often being lost towards the end of projects due to annual funding preventing the ability to plan for the future, was a key theme raised, as was the desire to provide more stability for the community by ensuring more secure, long-term projects and services. In addition, there was agreement that the constant need to apply and re-apply for funding on an annual basis took up a great deal of time, resources, and capacity that could be better used elsewhere. As a result, there seemed to be a consensus across the groups that multi-year funding can allow projects, services, and organisations themselves to grow and, ultimately, have a far greater impact, rather than facing the regular “cliff-edges” associated with short-term funding. There seemed agreement to some degree in most groups that “it’s imperative to make real systemic change” with regards to longer-term funding.

There were also certain issues with the multi-year funding streams currently available also highlighted. There was a suggestion that funding applications for these were often “too long, with too much detail needed” due to the requirement of providing financial forecasting for the next 3-5 years. There were also points raised around the lack of unrestricted funding provided on a multi-year basis, as well as discussion around how multi-year funding can actually be “restrictive to development if set to outcomes”. One attendee warned against viewing multi-year funding as “a panacea”, instead urging the need to “also think about accessibility, sustainability, and flexibility too”. Another suggested that “unrestricted funding is more important than multi-year”.

Barriers to multi-year funding

Some of the discussions around barriers to multi-year funding centred around both decision-making and culture. For the former, there was a concern raised that, often, it was not necessarily the lack of multi-year funding that was the problem but, in fact, the way in which funders go about deciding who deserves the funding. It was suggested that frequently the information required in this process, such as the financial forecasting mentioned above, is simply impossible to provide. And in terms of the current cultural aspect, there was a belief expressed that there is a widespread mindset amongst funders “around yearly budgets” that needs to be challenged.

Competition between organisations for funding, and a general lack of capacity, were identified as barriers primarily to collaborative funding bids. Issues around monitoring and reporting were also widely accepted as being problematic aspects of multi-year funding, with one attendee suggesting that “smaller organisations are disadvantaged” disproportionately as a result. Some groups noted that multi-year funding required their organisations to create a new role just to meet the frequent demands of reporting, despite there being uncertainty around whether the role would always be supported by funding going forward creating “a catch-22 problem”.

What needs to happen

Groups discussed a variety of aspects that would be required for efficient multi-year funding to be established. A key theme that emerged during these discussions was the important need for better communication and stronger relationships with funders, with a particular focus on building trust. In addition, there were calls more collaboration with other sector organisations, said to be a potentially crucial aspect in ensuring more multi-year funding is made available. Some groups advocated for a greater sharing of good practice, with one attendee suggesting that the sector should collaborate with funders to “match projects and organisations together to make a bigger difference”.

There were also specific calls on funders to provide more “multi-year funding for long-term core work, not innovative new projects” and greater funding for “anchor organisations for longer-term to deliver projects that matter to communities”. In addition, one group discussed how “progressive funding” rather than multi-year funding would be a positive step, “recognising that projects go through different stages of forming, growth and winding down when need is met over their life spans”.

Flexible funding

The groups tasked with tackling the theme of flexible funding all seemed to agree that more core or unrestricted funding, alongside project costs, is essential. Again and again, attendees highlighted the importance of unrestricted funding, highlighting the need for “more flexible core-type funding that can move across different funding streams” and “having flexibility to cover core costs so you don’t have to switch your focus”. There was some discussion around the uncertainty and stress resulting from the need to try and budget for core costs when these are not covered, with the mapping out of future income flow and forecasting made extremely difficult. For some, it was clear that the need for flexible funding was the number one priority in relation to funding, with a number of attendees making it clear that, without core costs being met, there was simply no way to then provide projects and services.

There was a feeling in some groups that, where flexible funding existed, it suggested a degree of trust in organisations and their use of funds, with a need for better relationships and partnerships with funders across the sector, as well as a more equitable power balance, discussed. It was also highlighted that changes to approach from funders over the course of the pandemic had “shown funders can be flexible”, and there were specific calls on funders to show a greater degree of openness so that “they can be approached to propose ideas”. Flexibility around budgets and outcomes was also discussed, with this said to provide a great deal of “relief when having the flexibility to just do what you need to do”. One attendee described the need to fill the immediate hole in their budget as being “stuck in a treadmill of applications”, and another described how inflexibility of funds as a medium-sized organisations meant finding themselves ineligible to apply for both smaller and larger funding posts, leaving them “between a rock and a hard place”.

Barriers to flexible funding

For those discussing flexible funding, there were a number of barriers identified by attendees. Several groups seemed to agreed that a particular barrier to flexible funding was a lack of understanding on the part of funders themselves regarding the necessity of core costs. It was acknowledged by many participants that there was a lack of direct contact with funders, contributing to this lack of understanding, although some also acknowledged that organisations needed to do more to “make it easier for funders to understand the work they do, its impact and importance”. There was also recognition that “funding organisations themselves often have uncertainty about their funding position” which could provide a further barrier to their ability to provide flexible funding.

Other barriers highlighted included a lack of trust on the part of funders, impersonal processes, and the threatened removal of funding “unless doing agreed services and projects”. There was also a suggestion from one participant that too many funders tend to approach their funding of organisations based on figures “but sometimes life is different”, highlighting how a lack of desire by funders to be flexible can itself be a barrier to more flexible funding.

What needs to happen

To achievable flexible funding attendees suggested that there needed to be more “room for innovation without it impacting on future funding”, with funders moving away from “pre-determined outcomes” and changing “how they measure success rather than just focussing on figures”. There was also a suggestion that there needed to be better communication from the sector around the need for core costs in a bid to better inform funders. The importance of communication was developed further by some groups, with calls for “funders to come together to create a guideline for responsible use of funding”, open discussions with funders on the importance of flexible funding, and identifying ways in which to build more collaborative, partnership-based relationships with funders.

The visibility of funds available was also highlighted, with some groups proposing that funders should replace their paper or computer-based methods for understanding the sector and its need for funding with more effective approaches, including visits to organisations, services, and projects. A number of groups highlighted that these visits, along with better communication, could go far in allowing funders to builder a greater knowledge and understanding of what flexible funding entails and why it is so important. One attendee commented “we invest the time – so should funders!”

Sustainable funding

Across the groups discussing sustainable funding, there were various contributions on exactly what that might mean. For some, sustainable funding was about “making best use of available resources” and being able to obtain support alongside funding. For others, it was primarily about having a “long-term vision for funding” and access to funds to allow organisations themselves to grow and become sustainable.

The importance of inflationary uplifts was highlighted by some groups, particularly given the current cost of living crisis, with one attendee suggesting that, with no uplifts, voluntary sector organisations are unable to “compete against global organisations”, other businesses, and local authorities. One group in particular noted that, in order to ensure that both funding and organisations can be sustainable, there must be less risk and anxiety linked to the potential of funding being cut based on specific outcomes and targets, rather than the long-term goals of an organisation, project or service.

Barriers to sustainable funding

Barriers to sustainable funding were identified across the groups, including those imposed by a lack of understanding on the part of funders with regards to the organisations that they are funding, and too many organisations feeling forced to “tick funders’ boxes while they ignore the true needs of communities”. Organisations becoming “too dependent on funders” was also highlighted as being unsustainable by one attendee. There was also a fear of speaking to funders that was noted by some groups, with one participant commenting “sometimes we feel reluctant to go back and ask for more if we have been successful in securing a grant”. Delays in funding, budget changes, and the fact that “many funds are for new projects rather than those that have been running for two years” were also suggested during the discussions as being barriers to sustainable funding.

The lack of opportunity for full cost recovery was described as “very difficult” by one group who identified this as an important aspect of, and barrier to, sustainable funding. In addition, a number of groups lamented the amount of funding going towards core costs “decreasing massively” at a time of real terms cut to funding as a result of a lack of inflationary uplifts. This was particularly highlighted as being a simply unsustainable approach to funding which was, in turn, making many organisations fear for their own sustainability going forward.

What needs to happen

In order to achieve sustainable funding, groups highlighted a few steps in particular. Firstly, there was a call for funders to have a greater “recognition of growth”, understanding that sustainable funding would, in turn, allow organisations to grow and become more sustainable themselves. One attendee asked for funders to “take a step back and focus on the longer-term in order to make organisations, and the funding they receive, more sustainable” and there were calls for training and advice to be provided for organisations, perhaps by Third Sector Interfaces.

The important aspects of more opportunities for full cost recovery and inflationary uplifts being built into funding were mentioned across groups, but there was also, as with some of the other priority areas being discussed, a particular focus on the need for better communication and stronger relationships with funders. One group spent some of their time discussing the need for “more open and frank discussions with funders” and the importance of strong relationships with funders, explaining that organisations “need to build these to be more confident with funding”. Some participants also proposed regular and collaborative “networking events with funders”, allowing both to work together towards more sustainable funding.

Accessible funding

For those groups tasked with discussing accessible funding, there was a fair amount of agreement across the room in terms of what that means. Application and funding processes which are “easy to navigate”, timely, inclusive, include clear guidelines, and provide “clarity on the criteria and what funders want” were all identified as key aspects of accessible funding. There was a particular suggestion that “no acronyms and clear language” was important, with one attendee highlighting that “some people are good at writing or speaking and others aren’t, so this can cause inequality” when funding is not truly accessible. There was also a suggestion from one group that accessible funding must include support for staff and volunteers navigating the funding landscape.

Like with flexible funding, accessible funding was said to be the result of trust on the part of funders, with poor relationships or a lack of understanding being a primary cause for funding that is not accessible. One attendee suggested that funding “needs to be bottom up and organisation-led rather than funder-led” for it to be accessible, with another questioning whether truly accessible funding is necessarily a sensible goal, suggesting that “making applying easier would result in more applications and assessments which would, therefore, cost more”.

Barriers to accessible funding

The complexity of funding application processes was a primary barrier to accessible funding identified by groups. There was a general feeling that “one size doesn’t fit all” in terms of what makes a good, flexible, accessible application process, and a general sense that “on paper application forms are demanding and don’t always allow organisations to demonstrate their work or impact effectively”. A number of attendees described struggling with application forms, a lack of clarity of guidelines and processes, and difficulty in providing feedback to funders when an application is overly complex for “fear of damaging their relationship or disadvantaging their organisation in some way”. One participant suggested that application forms by their very nature were a barrier, telling their group that they “can’t tell the full story in a restrictive form”.

The time and resources required to navigate multiple application processes was also cited as a difficult barrier to overcome with regards to accessible funding. One attendee suggested that the “effort in applying was not always commensurate with the outcome” in terms of “size of award, term of funding or the likelihood of success”, with “unrealistic timescales for organisations” mentioned by another participant as a potential barrier.

What needs to happen

Once again, groups highlighted better communication and collaboration with funders as a key step towards accessible funding, discussing the need for “forums to facilitate relationships” and giving funders the “opportunity to build a relationship and truly understand the organisation’s needs and ways of working”. There were also calls for funders to set fewer restrictions on funding, and to assess “how they promote funds and can be more innovative”. One attendee suggested that “more transparency” was required with regards to funding, with another suggesting that, where possible, decision-makers and assessors “with lived-experience, more diversity, and a connection” to the project or service would be preferred.

In terms of application processes, there appeared to be widespread agreement that as much of the process should be standardised as possible, with application forms made as simple as possible. There were some suggestions that funders should look to “move away from written applications” and embrace other methods, such as video or audio, with one attendee suggesting applications should be made “through conversation”. There was general support in groups for processes that allow “access to a person, not just an application form” so that funders are “available to applicants, providing support and assistance throughout the process”. Clearer guidelines, more information, and greater clarity around decision timescales were all also mentioned frequently in discussions.

Workshop participant pledges

At the end of the event, we asked attendees to jot down one thing that they could do in future that would help to make funding fairer. Here is a selection of some of those responses.

I am going to help make funding fairer by:

  • Having more conversations and sharing experiences.
  • Considering core costs and the wider needs of charities beyond delivery.
  • Providing regular feedback of challenges.
  • Being bolder in asking for longer-term funding.
  • Acknowledging the difference in capacity of full-time fundraising staff versus someone doing everything.
  • Addressing the power dynamic of “generous funders giving to grateful charities”.
  • Sharing my knowledge about funding and how it can help both funders and organisations.
  • Adopting a co-production approach to funding.
  • Continuing to talk to funders and partners about the importance of multi-year funding.
  • Exploring more meaningful and mutually beneficial collaboration.
  • Working together to create collective bargaining.
  • Applying for more appropriate funding.
  • Being a voice for my organisation and building positive relationships with funders.
  • Increasing our proportion of multi-year unrestricted funding available to the sector.
  • Feeding into policy and consultations to shape funding outcomes.
  • Continuing to have internal and external conversations around shifting the power.
  • Advocating for funders to listen to real-life problems in the voluntary sector.
  • Advocating to make funding applications simpler and more accessible.
  • Sharing my fundraising knowledge and experience with staff and volunteers from smaller organisations who are often excluded due to lack of knowledge or resources.
  • Providing constructive feedback to funders on where processes have presented barriers.
  • Communicating with funders to establish relationships.
  • Trying to remember that funders are human beings too, who have feelings and are available to answer questions.
  • Being more explicit about the funding challenges, particularly in monitoring and reporting.
  • Sharing what a good application looks like with new organisations.
  • Sharing funding information with all the organisations I work with and helping them to make connections.
  • Focussing on funds with the priorities best aligned to us and the value of awards that will make a real difference, leaving smaller funds for smaller organisations.
  • Working collaboratively with other organisations and across different sectors.
Last modified on 31 October 2022