Shared ambition & belief: a new basis for bonding between funders & charities?

The National Lottery Community Fund is now distributing funding in ways that are more conversational and people-led. Our aim is to ensure that applying for and receiving funding is much more like an equal relationship between charities and funders. Dan Paskins, Senior Head of Development for our England portfolio, reflects on how charities and communities have shaped our new funding approach and what we’ve learned over the past year.

At NCVO’s annual conference their Chief Executive Sir Stuart Etherington called for a different kind of relationship between funders and charities.

“I’m not interested in asking for the return of a proliferation of disconnected, micro-managed grants, with the sector as the clients of government. I would like to see a real devolution of power and assets. Genuine belief in communities,” he said.

At The National Lottery Community Fund, we share that ambition – and we’ve been making significant changes to how we work in order to put it into practice.

A few years ago, the experience of seeking money from us was very similar to the process for getting local authority or other government contracts. There were a range of different programmes, each with their set of outcomes, and charities had to fill in forms in order to apply for this funding.

As a result, unsurprisingly, most of our larger and longer term funding went to charities that also received funding from the government, and to those who had developed their skills in becoming excellent at filling in forms.

Now, there are many brilliant charities (and a few not so brilliant ones) who are also good form fillers, but there are many more who are not. So when my team started to re-design our funding programmes, our development approach for our new funding was to start by listening – rather than deciding what our priorities were - to find out what matters the most to the communities we support. And we listened not just to those we’d funded, but also to those we hadn’t.

We listened to people running small charities who just didn’t have the time to read a complicated guidance document and application form, and to community groups who were still upset and angry about what it had been like to apply for funding they didn’t get.

We heard from people who felt that getting funding was a competition about who could write about how miserable and awful everything was in their community, rather than about the strengths and opportunities. We also heard from those who felt that getting funding depended on the ability to pay for professional fundraisers, rather than the quality of the work.

To address those challenges, last year we launched our new Reaching Communities funding in England offering grants over £10,000. We got rid of standardised application forms. People can now tell us about their ideas on their terms, in a way that makes sense to them.

We hired some new staff and shifted from around 25% of our staff being based in local communities to about 75% so they can get to know their local patch. Our grant management approach focuses on enabling people to learn and share to maximise their impact rather than just ticking boxes on monitoring forms. For all the projects we fund, we start with “what matters” to communities, not “what’s the matter” with communities.

With a new team and a very different approach to funding, I thought it would take us a long time before we started to see significant results from the changes to our funding process. I was wrong. In the year since we launched Reaching Communities:

• More smaller charities and community groups are receiving funding – 80% of our grants went to organisations with a turnover under £1 million
• Organisations are being funded across a wider range of places – at least one grant in 259 different local authority areas, up from 189 in the year before
• 20% of our grants have gone to organisations that we’d never funded before - up from 12% the year before
• The average time from application to award of funding has been reduced by 42 days - down from 155 to 112 days
• We’ve given grants, which were smaller in size, but longer in duration – 44% of four years or longer compared to 28%
• Every single grant we awarded was developed by and with the people in the communities who were intended to benefit.

As one applicant said, applying to us for funding “was an opportunity to have an intelligent conversation with a really engaged funder about your idea and the ways in which you may be able to make it ready for your application and be confident you will get a good hearing."

There is, of course, lots more to come in order to support communities more effectively with National Lottery good cause funding. As we build up our knowledge of local communities, we can do more to share learning from the amazing community activity we support, and to connect people to develop new collaborations and catalyse action.

We are keen that we increasingly support more core running costs, enabling the sector to build its capabilities, and test new ways of putting as much power and control over our funding into the hands of communities. This could mean involving communities in shaping our strategy and in getting more involved in taking decisions about who and how we award funding.

What is absolutely clear, is that having a genuine belief in communities is a crucial starting principle for funders and for charities. It’s a principle that has inspired us to make huge changes to our culture and how we work, which as Sir Stuart said, “enables charities of all kinds [to] connect and inspire and support people”.