To Fund Impact or Activity, that is the Question
Posted By Alex Le Vey on October 24, 2011
Many charities have a bit of a problem on their hands when it comes to sourcing funds from large grant making bodies, such as the Big Lottery Fund (Big) – due to two reasons: competition and demonstrating / recording outcomes.
Not much can be done about competition, sadly, there is just not enough money to go around all of the worthy causes that deserve it, funds really are being very tightly stretched. This has never been more than in this age of austerity – funders are having to be even more selective about who they award grants to, and are, more often that not, using the impact.
Funders such as Big rightfully want to see what difference their grants will make to charities, and more importantly, how the money will improve the lives of their beneficiaries. Indeed in a recent interview Peter Wanless, Chief Executive at Big Lottery Fund recently stated ‘We’re interested in impact, not activity…Lots of applications describe what people are going to do, but don’t describe the difference they are going to make’.
Whilst I agree with Mr Wanless’ overall sentiment, I do think this can be slightly problematic for charities. What about the difference they are already making? More often than not to win the funding battle, charities are forced to show what more they would do if they were awarded a grant to increase their number of beneficiaries. Often this means expanding certain areas of their work, and increasing their level of activity, when they may not have the capacity or the need to do so. If charities have the capacity to grow, and want to… great! However, if they are already operating at optimum capacity and benefiting the optimum amount of people they can, why should they be forced to grow to secure funding?
Rapid, and sometimes un-necessary expansion can be very problematic for the future, Big say they want to see ‘Projects with the ability to have a lasting impact’, again, this is great, and obviously a good intention to have when funding a project, but by asking charities to increase their level of activity lasting impact can be damaged over the long run. After the funding period (say 3 years) has lapsed, charities that have not been lucky enough to secure alternative income streams could be faced with the prospect of withdrawing support for those that need it, or being saddled with an un-funded range of services that could eventually lead them into financial disrepute.
In these uncertain economic times, I would rather see charities consolidate what they are doing, ensure the short-medium term future of their services, and plan for future expansion if and when appropriate. For this reason I would urge Big and other funders to be more positive towards funding current activity and the outcomes charities are already achieving, rather than urging them to do more. It would be refreshing for a charity to put forward an application to Big (or one of the other large grant making bodies), based on maintaining its current level of beneficiaries, rather than increasing them and having that application accepted. If there are any charities out there that have had such a success I’d love to hear from you!
Outcome measurement and demonstration is though, clearly a problematic area for charities. Regardless of whether funders are asking for outcomes or not, we would strongly encourage you to measure them. For all those hoping to improve their impact reporting, please do take a look a the following links (courtesy of New Philanthropy Capital (NPC)). I hope they help:
Principles of good impact reporting
Full interview with Peter Wanless, Chief Executive, Big Lottery Fund
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