Dawn Austwick

From grant dependency to great grant making

I was reading recently in Third Sector about a new piece of research looking at how grants help smaller charities to thrive and grow and ‘crowd in’ other sources of funding. For every pound of Lottery grant received, medium-sized charities increased their income on average by £1.60 after four years. 

I found this particularly striking as many decision-makers – in good times as well as bad – have been reducing their grant budgets and encouraging the sector to move away from what they call ‘grant dependency’. The whole shift away from grant funding appears to be based on a fundamental misconception that giving and receiving grants is a problem rather than a solution.

As you would expect from someone who has worked for many years in grant making and has recently started as the new chief executive at the Big Lottery Fund, this is a subject close to my heart. At Esmée Fairbairn I experienced a myriad of exceptional people benefiting from grants both from Esmée and other funders. People like the Orchardville Society in Northern Ireland or the African Diaspora women’s charity, Forward.

So I’m going to say something a little unfashionable – I think great grant making has a crucial role to play in enabling the voluntary and community sector to transform people’s lives.

In the first few weeks of my new job, I was delighted to hear that the Big Lottery Fund’s Reaching Communities programme is now offering twice as much in grants as it did five years ago. This is important and is core to what we do.

Of course, it is valuable to help charities to develop skills to diversify their income, and there is a role for new forms of funding such as social investment in helping to achieve this. But these complement rather than replace grant funding. They can be used at different times in the funding cycle and for different purposes.

There are two themes of significant interest to the sector and to policy-makers where great grant making is particularly important:

– Preventing problems, rather than picking up the pieces – Grant funding is a particularly effective way of supporting projects which take a preventative approach, whether that’s one of our Awards for All projects such as the Building Ballysally Together Healthy Eating Cafe in Coleraine, or the great work which Baring Foundation, Trust for London and Comic Relief have been doing to strengthen the social welfare legal advice sector.

The flexibility of long term grant funding makes it particularly well suited to enabling the shift from picking up the pieces once problems have occurred, to high quality early intervention services. Making that long term commitment isn’t always easy for grant funders and often needs courage and an appetite for risk.

– ‘First (or last) brick in the wall’ –  Grant funding can be ‘the first brick in the wall’ – enabling voluntary groups and organisations to get started, to try new activities and take risks. It can also serve as the ‘last brick in the wall’, where community groups have been able to raise some but not all of the funding that they need from community share offers, crowd funding, loan finance or other sources. In these situations a small amount of grant funding can have a big impact.

The people working at the grassroots have always known that grant funding is a fantastic way of changing people’s lives for the better. Funders just need to give them the grants and the support to get on with it.

  • Sherry

    I couldn’t agree more – grant making which has a concentrated focus on prevention has the power to change the prospects of communities. The essential ingredients are co-production, thinking long term, a focus on building resilience rather than dependency and seeing the assets within communities and places when designing solutions and solving Bricks are good, but we need strong foundations too! That starts by building strong and resilient communities.

  • Barney Mynott

    This is a really welcome message from the Big Lottery. As well as the funding they provide we should not under-estimate the role the Big Lottery play in leading the debate on how we fund charities and voluntary organisations. The role of grants in preventative work (or early intervention) is really important – and should be something that cash-strapped public bodies take a moment to consider. It is still frustrating that despite key decision makers accepting the value of grants, with the exception of BIG, they do not protect them as they should.

  • Jay Kennedy

    Spot on and great to hear from the new chief of one of the most important grantmakers in the country. Policy makers please take note…

  • James Renton

    You are to be commended for your continued commitment towards the Reaching Communities (RC) programme but your comment that “Big Lottery Fund’s Reaching Communities programme is now offering twice as much in grants as it did five years ago” needs to be put in some sort of context. A quick analysis of the figures shows RC with a budget of £60m (20% of England expenditure) in 2008/09 and £167m (23% of England expenditure) in 2013/14. It’s gone up: a) because no more funding to the Olympics; b) the massive increase in lottery ticket sales; c) your admin costs in relation to funding are going down. These figures also highlight that your small grants scheme – Awards for All (A4A) had a budget of £35m (11.6% of England expenditure) in 2008/09 and £57m (7.7% of England expenditure) in 2013/14. The overall budget for RC and A4A as a % of overall expenditure in England has been largely stable over the last 5 years? I am a massive fan of the work of the Big Lottery Fund like others on this forum but you need to do much better at explaining why you think so much of your funds should aimed at strategic investments e.g. £50m to be allocated to the Centre for Ageing Better – how will this be a good investment? This body is hardly going to propose increasing taxation to pay of care costs or more state intervention (they recently appointed as their chair Lord Filkin who works for NSL Ltd a leading niche outsourcing business). Instead this Centre will cheerlead for outsourcing, increasing user charges, greater focus on the role of families/community, more use of volunteers, greater use of new assistive technologies etc – which are all part and parcel of an increasing political “consensus” on this issue. Why do you need to spend £50m selling a model politicians already want and are making steps towards adopting?