Five questions for funders after COVID-19

When the pandemic broke at the end of March and we entered lockdown, lots of grant -making trusts and foundations acted really quickly. Many de-restricted existing grants, and some even awarded additional funding to grantees without them needing to apply for it. Our survey showed that 30% of charities received additional support from an existing funder in those early weeks.

Is light-touch grant making the future?

New programmes were created, resourced and opened within days and weeks of the pandemic breaking, with simple and accessible online application processes, and payments made to successful applicants without the need for pen and ink copies of everything signed by trustees. “We trust you” was the clear message. You need help, we are here to give it – and to make receiving it as easy as humanly possible.

The question now is, will this stick for more funders, and what will than mean for the accessibility of funds for new applicants? Allocating more future funding for existing grantees could give much needed stability to some organisations, but leave others out in the cold, especially those supporting BAME communities that are already not getting a proportionate share of available funds.

Has the application black hole gone?

Funds like the London Community Response Fund have shown that it’s possible for funders to work together, and move really quickly from “here’s a shared problem” to giving out money to those who are addressing it, within weeks. We know many grant administrators and programme managers are working frantically now to assess and award grants incredibly quickly, but the level of urgency we’re all feeling now, is pretty much felt by applicants all of the rest of the time. Keeping the quick turnarounds we’re seeing now could make life so much easier for applicants moving forward, and remove the (often months-long) agony of wondering whether that application sent in last year might yet be successful.

But is it coming at a cost? Are funders working harder to do their normal due-diligence, or are there real efficiencies being found – and if process are being trimmed, what impact might reductions in due-diligence at the application stage have further down the line with regard to the relative success or failure of projects?

Will government ever not be crap at grant making?

Ok, the answer is probably no, but it’s rarely been more stark just how bad central government is at making grants. Over the last couple of months we’ve seen one week deadlines (including over a bank holiday weekend) for collaborative funding bids, multiple announcements of the same pots of money that still don’t add up to £750m, and months of waiting that could quite possibly see us out of lockdown before any of the openly available government funding is actually awarded.

Government using the National Lottery Community Fund as the vehicle for administering the £200m Coronavirus Community Support Fund was a great idea on paper. A massive, established, progressive and experienced funder with all the tools and processes needed to get money out quickly to those in need – until the DCMS clown car rolls up to Lottery HQ and countless government officials tumble out and start telling them how to do things. If they’d just trusted NLCF to do what they do best, the money could be helping people already, instead of only just being open for applications two months after being announced by the Chancellor.

Is poor practice more open to challenge? 

As well as the more positive approaches from some trusts and foundations, some friction around less welcome decisions has also shown a possible shift in the power balance between funders and their potential applicants.

Ridiculously short deadlines for the government’s Tampon Tax Fund and women’s refuge space funding were both revised after strong challenges from the Women’s Resource Centre among others – the refuge funding opening on a Friday and giving only a week for collaborative applications to be submitted (over a bank holiday no less).

Similarly when Barclays announced their 100 x 100 grant programme with the bizarre condition that money couldn’t be spent on salaries, reaction from the sector resulted in another quick change of policy from the bank that paid its CEO £5.9m last year.

In previous years, similar complaints might not have resulted in any meaningful changes in practice, but these rapid u-turns are a sign that there’s definitely power to change things on the applicant’s side of the fence. How do applicants and grantees leverage that influence in the future, once these unusual, emergency conditions have passed?

What does the landscape look like now?

With so many funders switching priorities to deal with COVID in the short-term, what’s happening to all the unmet need that they would have been addressing in the meantime?
Are non-frontline organisations suffering disproportionately? If funds are diverted to COVID but there are no additional funds to backfill what that funding would have otherwise supported, somebody somewhere is missing out.

What is the short and longer term impact of that? Is money being drawn down from endowments for example, effectively borrowed from future years’ grants? What might be available in the future, given big drops in investment income for most trusts and foundations recently and potentially over the next few years?

In the short term it’s hard to predict what the impact of the pandemic might be on the funding ecosystem. If you take a medium term view, the total amount of money available will almost certainly shrink, and it’s hard to see increases in individual or corporate philanthropy, or more statutory funding, being enough to plug an ongoing shortfall that could run into the billions.

Additional short-term funding, deferred “usual” spending decisions, and reduced income from endowments and corporate support could all severely reduce what trusts and foundations are able to deliver over the coming years – and there’s no obvious source of income to fill any gap that’s left.

And although it may seem it from some angles, it’s not all negative. The new and emerging challenges we’re facing will inevitably be accompanied by new solutions, new funders and new formal and informal organisations looking for support. The current situation has shown just how responsive, quick-acting and light-touch funders can be in a crisis.

OK, that was probably closer to a hundred questions than five, and we’re not expecting answers to all of them straightaway! At DSC we’ll continue to  track the shifts in funding as part of our ongoing research, trying to distinguish between what COVID 19 focused funding is wholly new, and what is re-targeted or part of other future pots of giving, that will now not be given as they might have been – one thing is for sure, our next edition of The Directory of Grant Making Trusts will be interesting!