Types of Funding

There are several main sources of funding and each has different characteristics, criteria and eligibility – each with its own benefits and drawbacks. Some sources provide a range of funding types e.g. public bodies make grants but they also enter into contracts and service level agreements with voluntary organisations. When researching appropriate funding sources for your work – consider the type of support as well as the source.

Who Are They?

There are about 7,500 grant-making trusts and foundations in the UK, giving a total of approx ₤2 billion in grants each year to charities. Trusts’ total giving to charities is about the same as the total of grants given to charities by the UK government. Most trusts and foundations derive their income from an endowment, i.e. a capital sum given to them by a rich individual, family or company. The endowment may take the form of cash, stocks, shares, or land. It provides a tax-exempt income which funds their grant-giving. Some trusts and foundations receive their income from other sources: e.g. gifts from a company’s current profits, or a regular appeal on TV and radio. Some trusts act as a broker for donors and collectors of endowment, either in a local area (a community trust) or in a specialist field (an intermediary trust).

Who Can Apply?

Trust income comes from an endowment i.e. an individual, family or company. The interest made is given out in grants. No tax is paid to the government but in return, trusts can only fund charitable causes. Consequently, they often only give to or via a registered charity or to organisations which are accepted as charitable e.g. churches.

What Do They Fund?

Trusts and foundations like to fund what government does not fund:

  • New methods of tackling problems;
  • Disadvantaged and minority groups that face barriers in accessing services, or which have inadequate access to services;
  • Responses to new or newly discovered needs and problems;
  • Work which is hard to finance through conventional fundraising;
  • One-off purchases or projects;
  • Short and medium-term work which is likely to bring a long-term benefit and/or to attract long-term funding from elsewhere.
  • About 70 per cent of trusts and foundations give in the health and social welfare fields. 30 per cent give to the arts and recreation and 9 per cent give to causes related to religion. About 7 per cent of their funds are given internationally. They might fund a slide for a playgroup or fund a 3 year project to deal with drug addiction amongst young people.

Pros:

  • Simple procedures
  • Flexible about what they can fund
  • Wide range of interests
  • Often prepared to fund something new and untried
  • Often prepared to fund more unpopular causes

Cons:

  • Few give large grants (tends to be ₤100s rather than ₤1000s). Most are too small to fund salaries
  • Need research
  • Many don't meet more than twice a year, so the process can be slow
  • Those that do make large grants are interested in setting-up costs, not long-term running costs

How do you apply?

Usually in writing. Find out what they require from you. Some require in depth information. There is information below about how to find trusts that might fund you.

How much?

Usually small amounts, although there are some larger trusts that provide funding for more than one year.

For more information on Charitable Trusts go to www.members.community-matters.org.uk.

The National Lottery contributes to good causes through its many grant programmes.

Who can apply?

The National Lottery works in partnership with lottery distributors, to support ‘Good Causes’ in the arts, heritage, health, education, environment, community and charity sectors.

Each Lottery ‘Good Cause’ funds its programmes with their own criteria and application process.

Each distributor makes decisions about who shall receive awards independently of the government and according to guidelines established by the Department of Culture, Media and Sport.

What do they fund?

‘Good Causes’ in the arts, sports, heritage, health, education, environment, community and charity sectors.

How do you apply?

Application form. It is best to contact the appropriate body to discuss your project idea.

How much?

The amount you can apply for varies – anything from a small amount for new or small groups to large amounts over a number of years. The amount you can apply for is stated for each funding programme.

Pros:

  • Funds a wide variety of good causes
  • Can be large grants, including salaries
  • Some pots of money require very little or no match funding e.g. Big Lottery and Awards for All
  • Can provide medium term project funding
  • Very communicative funder and support usually available

Cons:

  • Larger applications can be complicated and time consuming
  • There is less money available as less people are doing the lottery
  • There can be ethical issues for some groups not wanting to access money raised from gambling

Lottery Funding

Lottery Funding is a joint website run by all Lottery funders in the UK. This site allows you to search information on current funding programmes across the UK. The funding search will help you to find the funding programmes that best match your project. It will search programmes offered by Lottery funders that are currently open to applications. The funding search will take you through a series of four questions about: the location of your project; about you as an applicant; about the project itself; and about the amount of money you are applying for.

Website: www.lotteryfunding.org.uk

The Lottery Good Causes Distributors

Big Lottery Fund - www.biglotteryfund.org.uk
Regional Offices are listed on their website.

Awards For All

The BIG Lottery Fund launched its own new version of the highly popular Awards for All small grants scheme in England and Wales from 1st April 2009. The programme aims to make a difference to communities and the lives of those most in need and will focus on social and environmental projects that benefit local communities.

The application form, available in English and Welsh, can be downloaded, filled in and emailed direct to the Big Lottery Fund as well as being available in hard copy. Application forms are available from the website: www.awardsforall.org.uk.

Arts Council England

Arts Council England works to get great art to everyone in England by championing, developing and investing in artistic experiences that enrich people’s lives. To find out more and apply visit their website: www.artscouncil.org.uk.

Sport England

Sport England’s vision is to make England an active and successful sporting nation. They have a range of different funding strands, but for most people the key one is:

Sport England – Small Grant Scheme (replacement for Awards for All)

Sport England’s small grants scheme funds community projects that encourage people to become involved in sport and ensure that they have a quality sporting experience. The scheme also helps people to improve their performance in their chosen sport. The scheme is for not-for-profit sports clubs, voluntary and community organisations, local authorities and education institutions.

Grants of between £300 and £10,000 are available for revenue and small capital projects.

Application is via a single-stage online form. They offer advice and support to applicants, and the whole process, from receipt of application to decision, will take no longer than six weeks. Visit Website: www.sportengland.org.

Heritage Lottery Fund

Using money raised through the National Lottery, the Heritage Lottery Fund (HLF) sustains and transforms a wide range of heritage for present and future generations to take part in, learn from and enjoy. From museums, parks and historic places to archaeology, natural environment and cultural traditions, they invest in every part of our diverse heritage. HLF has awarded over £4 billion in grants to heritage projects throughout the UK.

Heritage Lottery Fund – Small grants (replacement for Awards for All)

The Heritage Lottery Fund have two small grants schemes:

Young Roots – This scheme makes grants to involve 13-25 year-olds in finding out about their heritage, developing skills, building confidence and promoting community involvement. Your Heritage – This scheme supports projects that relate to the local, regional or national heritage of the UK and that help people to learn about and look after their heritage.

Young Roots makes grants of between £3,000 and £25,000, and Your Heritage between £3,000 and £50,000.

They offer advice and help before you apply, the application forms are short and simple and they can offer you a mentor to help you run your project. You can apply at any time and will receive a decision on your application within 10 weeks of them receiving your completed application. Visit Website: www.hlf.org.uk.

There are specific funds for Scotland and Northern Ireland.

For more information and support go to www.members.community-matters.org.uk.

Public or Statutory Funding

 What are they?

 UK Government departments. Local Councils, NHS and Clinical Commissioning Groups. Very few of these are now grants, the majority are contracts.

  Who can apply?

 Anybody usually.

  What do they fund?

 Any type of work that meets the statutory organisations outcomes.

  How do you apply?

 Often through a formal tender process or via a grant application

 

 Pros

  •  Contracts are often for large amounts of money
  •  Often for a fixed number of years often 3 or 5 with options to extend
  •  You get paid to deliver specific outputs

  Cons

  •  Contracts potentially incur VAT
  •  If its an existing piece of work you may need to TUPE staff
  •  There are penalties for non-delivery
  •  Usually paid in arrears

 

Information sources

 Information about a range of sources often there is a regional tender portal ask your local council for details.

 

The Government Funding Website is operated by Directory of Social Change and is now a subscription service, www.governmentfunding.org.uk

 

There are also a number of Government websites that provide entry points for information about UK Government Departments. These can be found via www.direct.gov.uk  or www.number-10.gov.uk

 

For more information please go to www.members.community-matters.org.uk

Company Funding

Raising support and income from companies is often a new and untried task for voluntary organisations or community groups. Many small and large organisations do successfully work with companies, and the number of companies who promote their links with charities is increasing.

Who can apply?

This varies according to the company. There is a genuine wish by most companies to contribute to charitable and community activity on an international, national or local basis. With some companies this is organised and structured, sometimes with foundations independently set up disbursing a proportion of their profits through formal and accountable application procedures. The larger of these trusts will be covered in the section on funding from Trusts and Foundations.

At the other end of the scale it may be left to a marketing department or a whimsical process, dependent on furthering their company profile or the personal interest or inclination of board members. This does not mean that it is not worth pursuing contact with this sort of company. They may be able to be far more flexible in their giving and be very generous. You may be ideally placed to give a presentation to a board member or make an appointment with a local company manager or to have an informal chat with an employee that could lead to the funding or other help you seek. If there is no formal plan for giving or precedence you can be more inventive in your approach. You have little to lose. Most like to fund things of local interest.

What do they fund?

Most companies don’t have published donation policies. Mostly they cover a wide range of good causes, or attempt to deal with each appeal on its own merits.

How do you apply?

A personal contact can help. Find out about the company and what they offer either through looking at their website or by phone. Applications are usually made in writing. Use a personal letter. Find out who you need to write to by name.

How much?

Companies vary considerably in the amount they will give. Some provide core funding of hundreds of thousands of pounds to national high profile charities. Others only give small donations to projects in the communities they where they have a presence. It is useful to know their giving patterns so you avoid asking for an inappropriate amount. If it is not clear ask.

Pros:

  • Little bureaucracy
  • Can often respond quite quickly
  • Secondees salaries can be used as match funding
  • Minimal monitoring required

Cons:  

  • May depend on personal contacts
  • Usually small amounts
  • Some causes more popular than others, e.g. children’s toy appeals do better than work with offenders
  • Some companies may not fit with the aims and ethos of your organisation due to various ethical issues

Why do companies give to voluntary and community organisations?

Company giving is just part of what they now term ‘Corporate Responsibility’. This also covers their impact on the environment and on the communities where they operate, their terms and conditions for suppliers and the working conditions for their workers.

The give for a variety of reasons:

  • philanthropy
  • to generate goodwill in the communities where they have a presence
  • to develop a particular image for the company – association with helping schools or hospitals, funding sport and activity, sponsoring opera or theatre
  • conscience – banks supporting debt advice services, tobacco companies supporting medical research, petrol companies supporting environment projects
  • to help market their services – computers for schools tokens, low price or free software for charities, 2p for sport when you buy a chocolate bar
  • to support their staff and develop their relationship with them – time off for charity activity, encouraging their collections for charity
  • to satisfy legal requirements – ameliorating the impact of a mining, compensating for landfill operations through environmental project support, helping with retraining when they downsize or close operations
  • to take advantage of tax concessions – payroll giving, matching employee donations
  • to pass on unsold goods or recycle – supermarkets donating perishable foods to those working with the poor or homeless, passing replaced office equipment to charities

Many companies are becoming pro-active in their support for good causes – setting their priorities well in advance and pro-actively choosing the causes they will support, rather than simply responding to requests.

Some companies choose to build a close relationship with a charity working within the sector appropriate to their activity. Pharmaceutical companies support health charities. Building developers may give help to housing associations and tenant groups.

How do companies give?

As you see companies do not just give money, they give support in a variety of other ways. They also support their employees and their community interests.

Apart from organised funding, companies may offer help such as:

  • Donations
  • Regular giving from staff salary
  • Gifts in kind – Do-it-Yourself stores may give materials for repairing a community centre.
  • Support for volunteers – community clean up events, painting the village hall
  • Staff involvement – paid time for staff to give to voluntary work/projects
  • Secondment of skilled staff offering skills and company expertise – accountancy, lawyers time, fundraising
  • Publicity – local radio giving exposure or appeals, help with promotion materials from advertising companies
  • Sponsorship of local events
  • Providing premises, grounds for events
  • Giving surplus stock

Why companies may not give?

Corporate image is very important. Companies do not like to court controversy. They like to be associated with causes that are simple to understand and universally popular. Sport for children is more likely to be supported than drug rehabilitation. They will probably avoid giving to animal rights organisations or for political ends. It is worth considering where you fit in the popularity stakes before you start. Unpopular causes may be better placed when applying to trusts and foundations.

For more information go to www.members.community-matters.org.uk

Loan Funding

This is a relatively new form of finance to the sector which can make things happen quickly. A diverse range of bodies now offer loans including:

  • commercial high street lenders
  • national providers for charities eg Unity Trust Bank, Charity Bank
  • community development lenders working on a regional basis e.g Key Fund

Loans are a financial tool which can be used to ‘bridge gaps’ e.g. between grant payments or when a large sum of money is needed quickly for projects such as developing a building or providing funds for start up costs for a new enterprise.

They are particularly useful to enable groups not to miss an opportunity whilst they are spending time on traditional forms of fundraising. Loans can be flexible (unlike grants which are tied to specific project outcomes) and loans encourage long term planning. Loans can also be used to help start up contract or trading activities, e.g covering the costs of development work, preparing tenders, training new staff, purchasing equipment or managing lead-in times between producing goods and services and receiving cash for sales.

When going for loans you may need to check that your constitution or legal structure will allow you to take out a loan; research a wide range of loan providers; ensure you have financial systems in place; and demonstrate that you have the ability to budget and plan ahead ensuring you can repay the loan.

There is a diverse range of bodies now offering loans, including commercial high street lenders, national providers for charities, and community development lenders that tend to work on a regional basis – some have developed specifically to meet the needs of VCOs such as Key Fund. These lenders are good at assessing the risks of lending and investing to VCOs and often offer support and flexible terms.

For more information go to www.members.community-matters.org.uk

Our Vision

The Community Matters vision is to provide a sustainable and effective "hub" of learning, support, advice and guidance, enabling local communities and organisations to grow and achieve through the provision of a high quality service.

We do this in a number of ways through our various projects which at the moment concentrate on working with children, young people and families. But not exclusively. We are able to provide training, learning opportunities and business related advice, guidance and information to individuals and organisations.