Charity funding in a changing world

The third sector is in a financial downturn thanks to the pandemic.

However, this is an acceleration not a U-turn. Charities in Northern Ireland did not live in some cash-rich Shangri-La this time last year. Times were already tricky.

But the acceleration provided by Covid-19 is a massive one. The foot is on the floor, the effects are being felt already, and everyone needs to strap in for a chastening few years.

Furthermore, the socioeconomic effects of the pandemic are going to be enormous and long-lasting. Demand for the work of community and voluntary organisations is going to soar.

These are significant challenges but they also represent reality. But difficult does not mean impossible, and major funding streams continue to exist, while Covid-specific support channels have been created.

Kate Beggs, NI Director for the National Lottery Community Fund, told Scope that one of the third sector’s strengths is the ability of organisations to be nimble, and that adapting to changing circumstances will be important in the near future.

“We all understand there’s going to be a very tough public spending environment over the next few years.”

As well as its normal funding portfolio, the Fund is now also administering the Dormant Accounts Fund (DAF) – which is interesting not only because of where the money comes from, but also because it is designed to help organisations modernise, become more sustainable and more robust, and is not for use on frontline services.

“I can only speak for Lottery funding, and the Dormant Accounts Fund, and for me what we have seen from the sector is a huge amount of creativity and people coming together to adapt, and adapt their services. People have responded and shown they can adapt, perhaps in ways they didn’t know they could.

“We are looking at the shape of our whole Lottery portfolio at the minute, and adapting our projects. Lottery income has held up well and we are in a good position to keep funding people with that money that comes from Lottery players.”

Co-design

What big funders have been looking for in community and voluntary organisations has changed in some fundamental ways over the past decade or so.

One of the biggest changes is now established as best practice. Co-design with service users was an important new element for the National Lottery Community Fund (or the Big Lottery Fund, as it was then) back in 2015 (see here, and here).

However, while working closely with service users/target communities at every stage of service design is no longer a new idea, Ms Beggs said its importance is still being reaffirmed over time.

“We have seen fundamental shifts in our funding, to that very locally-based model. For us, during the pandemic it has become so clear that links with and closeness to the community are crucial. We are trying to put people in the lead.

“The way we have seen people coming together at a local level during Covid-19 has reinforced that this approach is right. We need to keep working on that.”

There are plenty of examples of this. One example is the innovative ways that food parcels and other essentials have been delivered to people’s doors – whether they are shielding, or ill, or for any other reason – during the past year of social and movement restrictions.

“Working like this can also build trusting relationships between funders and grant-funded organisations. For me, having a relationship of trust is incredibly important to make that collaboration work.

“If you have trusted relationships in the community, people are more able to tell us something is not going right, they need to take a different approach. That’s great if we are still working towards the core outcomes.

“During the pandemic, we have been able to demonstrate that trust. We were able to tell organisations to be flexible, and to do what they had to do to get through the next few weeks, whatever challenges were thrown up.”

Ms Beggs made the point that bureaucracy is not a fundamental. Bureaucracy exists to create and maintain good services, and that it is always important to remember this. As a principle, that cuts into another new area for organisations to ponder.

Data

Data is everywhere now. It can be used well or used badly. The third sector needs to embrace the former.

Public services and government have committed to outcomes-based accountability. Progress against these outcomes are measured, over time, by indicators. Underpinning the fundamentals of Stormont is something statistical.

Data can be daunting for some organisations. The Fund recognises this.

“There’s a really fine balance to be struck between making sure that we as funders have access to the information that’s needed for us to make good decisions, and what difference we are making with that funding and the bureaucratic burden that you can put on people.

“It’s a test of programme design, collecting the right information at the right time and work with people who are after that funding – and actually helping them to collect that information that assists them in speaking about themselves.

“That’s a work in progress, something that we are talking about and developing. Across the UK there are big discussions about how we, as a funder, use that.

“We want to make sure we do not become part of the problem. In some ways, the funding environment is one of the greatest obstacles to the sector. Sometimes bureaucracy can be created that only benefits the funder and not the sector itself.”

So the extent to which data is used, and how it is used, are both areas of expansion and innovation. Scope recently spoke with Dr Donna Kernaghan, someone with plenty of experience in NI’s third sector, about her new business Stats & Stories, which exists assist community and voluntary organisations in using data – to both improve their services and to better explain how and why their services are so valuable.

With the end of the pandemic now at least vaguely in sight – even if it is still months, or longer, away – a clearer picture is emerging of what our collective new reality will look like. But nothing every really stands still. And, it’s worth repeating, while things are going to be difficult, difficult does not mean impossible.