Case Studies

With funding from the Scottish Government, local authorities, and numerous national funders, Organisation A is a national intermediary organisation that, from the outside looking in, could appear to have a solid funding foundation. However, the funding landscape for the voluntary sector is such that the organisation still faces a myriad of struggles – particularly with a lack of flexible, multi-year flexible funding.

With a need to submit proposals on an annual basis, even for programmes with outcomes that are a strong priority of funders, there is a huge drain of time and resources. For a lengthy period of each year, Organisation A’s senior management team must devote a sizeable portion of capacity towards sourcing funding ahead of the following year, taking valuable staff members away from programme management, staff development, and strategic planning. A lack of flexible funding simply compounds these issues, with a need to seek out specific pots of cash to cover the core costs of the organisation making the entire process relentless and seemingly never-ending.

Even with the best will in the world, Organisation A cannot help but face continuous barriers when seeking to provide its services, helping people through programmes and working with local organisations and communities, and faced with uncertainties around the length of financial support. This has, at times, even led to the offering of voluntary redundancies, as the organisation has sought to cut capacity out of necessity.

With local authority contracts in particular, the lack of multi-year funding on offer – and the subsequent ongoing uncertainty – is a major issue. In addition, the disproportionate time and hugely complex process involved in the bidding for contracts, with more hoops to jump through once awarded, means that, on balance, it is often not worth the effort for the organisation in the first place.

Being able to rely on multi-year, flexible funding would be a game-changer for Organisation A, providing the space to plan and sound out the most effective ways in which to produce the best outcomes possible, instead of spending huge amounts of time just trying to source enough funding to survive, and helping to avoid the kinds of challenges that have, in the past, led to valuable staff members losing their roles.

Providing vital youth work, promoting human rights and equality, and delivering crucial programmes that positively change lives, Organisation B’s charitable work across the length and breadth of Scotland is widely commended. Despite this, the organisation continues to face many of the same funding barriers as many other voluntary sector organisations. However, one aspect that has truly provided a secure and stable base on which to progress has been the introduction of inflationary uplifts as part of the multi-year funding provided from a handful of funders.

Prior to the inclusion of those uplifts, with 80% of costs being that of salaries, the organisation was unable to increase the cost-of-living aspect of pay for staff to anything close to what was required, resulting in the consistent threat of experienced and skilled team members potentially moving on. And as the economic climate has continued to worsen, Organisation B even took to encouraging staff to use offices in order to benefit from heating and lighting, instead of incurring increased energy bills at home.

However, unrestricted uplifts, including one of 10%, have been an invaluable development for Organisation B. With those uplifts, the organisation has been able to provide the kind of cost-of-living increases that staff members require in the current climate, making it easier to retain irreplaceable employees and allowing gaps in funding to be filled, giving the organisation real breathing space at an uncertain time. It may still take the organisation around three years to slowly increase income in order to meet the level of staff salaries aimed for, but the uplifts have ensured that a positive trajectory is now in place.

With plans to develop a new service to assist with the mental health pandemic that has followed on from COVID-19, the ability to recruit and retain staff on adequate salaries has been vital. Without these uplifts, the organisation simply would not be developing and expanding, with less young people receiving access to life-changing and, potentially, life-saving services, as programmes and projects would have been delayed or even scrapped. This alternative scenario, with the clear consequences Organisation B would be facing without uplifts built into funding, has now led to a belief within the organisation that relying on multi-year funding without inflationary uplifts in future would be simply economically disastrous.

Instead, with the security and sustainability provided by uplifts, as well as a belief that the introduction of such shows a real trust and respect in what the organisation does, Organisation B is able to continue to provide, develop, and introduce invaluable services that Scotland could not afford to lose.

For a small, local community development project tackling poverty and inequality, Organisation C has found a lack of funding for core costs an issue for years now, receiving funding that only covers around a third of total core costs. During the pandemic, the organisation recognised the efforts that funders went to streamline and improve processes, placing more trust in organisations, but unfortunately now feels that most of the progressive steps taken out of urgency have now been abandoned.

A combination of a lack of core funding, which the organisation believes is, at least partly, the result of short-sightedness on the part of the local authority, and a perceived power dynamic, which results in organisations being unable to feedback when funding does not meet their requirements, has led to an ongoing financial instability. Organisation C has no relationships with local authority or Scottish Government funders, which is in stark contrast to fruitful relationships, and strong communication, with charitable trusts, resulting in an inability to communicate the sheer importance of core funding at that level. Ultimately, the organisation feels like these funders, in particular the local authority, fail to treat them with trust, honesty, and respect.

Despite undertaking work with positive impacts that are easy to evidence, Organisation C’s ability to meet outcomes is still hampered hugely by a lack of core funding, despite shared priorities with the local authority. Capacity that could be spent on planning for the future, delivering services, and developing partnerships, is instead spent plugging funding holes consistently. In terms of sourcing enough funding to maintain core staff and services, as well the organisation’s building, the organisation has to devote large amounts of time and resource to working on applications for the vast majority of the year. The process is relentless, leading to burnout for the organisation’s staff.

If all core funding was to cease, Organisation C’s budgets for the next 18-months would have to change radically. Given the way in which decisions have been made on funding applications previously, the organisation would potentially consider bringing in additional staff in order to give a greater chance of then obtaining core funding, resulting in a potentially disastrous financial situation if they were unsuccessful.

In an ideal world where all core costs were met, Organisation C would have the space to think more boldly and provide more innovative services, developing programmes and engaging with communities, and unlocking the ability to generate further income through services and other sources. This would lead to a reduced reliance on revenue funding from the local authority which would be hugely beneficial on both sides.

Organisation D may be a relatively new organisation but it is one providing incredibly valuable work improving the mental wellbeing of and providing positive destinations for young people. The high demand of the city-based organisation’s services has resulted in growth year on year, as young people benefit hugely from the support provided and priorities of both the local authority and Scottish Government are achieved. Despite this, Organisation D has struggled hugely to access funding at either local authority or government level.

For Organisation D, there appears to be insurmountable barriers caused by the current culture that surrounds such funding. Whether it is Integration Joint Boards, Health & Social Care Partnerships, local councils, or the Scottish Government, the organisation has found the funding on offer simply unobtainable, with a reluctance on the part of funders to take a chance on new, innovative organisations and projects, and a lack of feedback subsequently provided after processes that are usually complicated and bureaucratic. In fact, it is the void of communication from such funders that Organisation D pinpoints as a particular frustration.

Additionally, Organisation D does not just feel the strain from a lack of access to the funding provided at local authority and Scottish Government level, but also the social capital that it can provide - unlocking networks, unearthing opportunities, and creating connections within the funding landscape, something of particular importance to a new, growing organisation currently on the outside looking in.

In contrast to this inaccessible funding, the complex web of independent funders and trusts that the organisation relies on tend to provide far more cutting-edge approaches, a greater level of accessible funding, and an offer of both good communication and mutually beneficial relationships. However, despite these positives, such funding is also not without its issues – multi-year funding remains a rarity for the organisation, for example.

The inability to secure funding at local authority or Scottish Government level, despite delivering the outcomes desired by local and national government, allied to a lack of secure multi-year funding, has resulted in a situation where the organisation has to channel vital time and resources away from services and, instead, into mitigating funding concerns. In addition, the uncertainty is such that an ongoing threat of ultimate closure is never eradicated.

If the door to this inaccessible funding was to be opened, Organisation D would be able to establish more security and sustainability, achieving more of the ambitions and goals that are shared across the organisation, the local authority, and the Scottish Government.