Key findings summary

This case study is part of a series of work undertaken by the Scottish Council for Voluntary Organisations (SCVO) looking into the funding situation of Scottish voluntary organisations. In this paper, we draw upon the experiences of voluntary sector intermediaries to shine a light on how the Scottish Government directly funds voluntary organisations, including the processes it adopts and how it interacts with those that receive funding. 

Intermediaries are organisations whose members are primarily other voluntary sector organisations or individuals that share a common interest or purpose. Also called umbrella bodies, membership bodies or network bodies, their primary role is to support and represent these members. National intermediaries are effective partners for government, parliament, and funders, with their members and networks contributing to vital policies and strategic outcomes. These organisations also serve as a conduit or bridge between their members and others. They support their members by building and sharing intelligence, providing information, and offering organisational development and capacity building.

Serving as a case study of how the Scottish Government funds voluntary organisations more broadly, this briefing makes the case that national intermediaries, as with other voluntary organisations, are at risk because of a lack of fair funding. In this paper, we summarise and publish the views of senior leaders of voluntary sector intermediaries from across Scotland, highlighting the impact of unfair funding on national intermediaries. We outline what is by no means an exhaustive account of what needs to change in how the Scottish Government funds national intermediaries and other voluntary organisations over the next two years to deliver fair funding for Scotland's voluntary sector.

This paper focuses on the funding that intermediaries receive directly from the Scottish Government, which includes funding that is disseminated by organisations on behalf of the Scottish Government. Many intermediaries recognise these issues in the funding they receive from non-departmental public bodies and via third-party organisations. We intend for this paper to assist all those responsible for improving the experience of grantees, including across all devolved Scottish Government funds.    

The main funding challenges that intermediaries face with Scottish Government funding include:

• The uncertain annual cycle of year-to-year funding

• Untimely decision making and payment of Scottish Government grants

• Static levels of funding with no inflationary uplift, sometimes up to six years
• Inconsistent relationships with senior civil servants that have power to make changes

• A lack of flexibility in existing funding arrangements

The impact of these funding challenges on voluntary sector intermediaries include:

• An inability to plan for the long-term reducing the impact organisations can have

• Putting pressure on governance in a way that creates difficulties for leaders to comply with legal duties

• Constraining service delivery by focusing on what government wants, rather than what is needed

• Harming financial sustainability by leaving organisations vulnerable before each financial year

• Diminishing the workforce’s wellbeing through limiting fair work practices such as secure jobs

• Limiting capacity to have the most impact by forcing leaders to chase small, short-term pots of funding

Factors contributing to good funding relationships between voluntary sector intermediaries and the Scottish Government include:

• Good quality communications with civil servants at all levels and in all relevant teams

• Familiarity and consistency in the funding relationship with the Scottish Government

• Supporting learning and capacity building to improve approaches and outcomes together
• Trusting each other to manage and overcome challenges in two-way relationships

• Focusing on outcomes and how partners can work best together to achieve these

A convincing response from the Scottish Government and those responsible for disseminating funds would include:

• Adopting timely processes for funding decision making and payment of funds

• Providing written documentation for effective and consistent communication

• Offering real multi-year funding falling between at least 3-5 years with uplifts

• Providing an inflationary uplift to ensure that organisations and their staff can meet rising costs

• Providing meaningful core costs to help to build services and support income generation
• Being transparent around funding to organisations and from government

• Offering flexible unrestricted funding to support changing need and gaps

• Modernising approaches to monitoring and reporting to capture real success

• Building consistent and accessible applications and fund information to help with planning

•  Establishing visible relationships and partnership from senior civil servants who
   have power.
  
  

To address these challenges, those interviewed said that on funding issues, SCVO should:

• lead on sector funding issues and finding solutions with Scottish Government and intermediaries  

•  support a strong collective voice between intermediaries and the wider sector to influence funding

•  work with intermediaries to get the balance right in pushing for change on funding

More generally, SCVO should:

• continue one-to-one conversations similar to the calls as part of this investigation 

• enhance the resources it already provides, such as the guide to intermediaries 

• ensure its engagement and influencing activity is accessible for all organisations   

• make the case for intermediaries and voluntary sector infrastructure whenever possible 

• always build evidence that is fair and representative to maximise support and impact