Funding Practices

Funding Practices is one of the six Stronger Foundations working groups. Its principal purpose is to examine, discuss and debate challenging questions about foundation practice related to its theme. On this page you can find snapshots of each meeting to date, including content, reading materials and outputs. The group's work will contribute significantly to the raw material gathered through the initiative as a whole, from which ACF will create a variety of products, including a 'rapporteur's report' summarising the breadth of discussions and evidence gathered.
 
The group is comprised of senior foundation representatives drawn from across ACF's membership, who will meet 7 times over an 18 month period. The meetings, which will vary in format depending on the topic and desired content, will include presentation of evidence (by experts from within and beyond the foundation sector), small group discussions, whole group exercises and visits. The group's full terms of reference can be found here.
 
The members of the group are: Chris Llewellyn, CriSeren Foundation (group chair); Nicky Lappin, Tudor Trust; Kate Franks, Innocent Foundation; Celine Gagnon
The Funding Network; Sara Thurman, United St Saviour's Charity; Manny Hothi, Trust for London; Rosy Phillips, Mercers' Company; Nick Addington, William Grant Foundation; Fiona Bickley, Barts Charity; Rhiannon Bearne, Millfield House Foundation; Pete Barrett, Community Foundation Tyne & Wear and Northumberland; Jenny Impey, John Laing Charitable Trust; Darryl Tidd, Talbot Village Trust; Flora Craig, Garfield Weston Foundation; Lise Jackson, Cole Charitable Trust; Anthony Tomei, Bell Foundation and ACF Trustee.
 
 

Meeting Snapshots

Meeting #1 (February 2019) - Introduction

The Funding Practices working group, chaired by Chris Llewellyn of CriSeren Foundation, had its first meeting in February. The group comprises members with a variety of approaches to funding, which was reflected in the wide range of issues raised; from macro level issues about using all foundation assets effectively and foundations’ impact on the wider voluntary sector, to micro level issues around grant-making processes and finding suitable applicants.

A theme which emerged throughout the session was the importance of relationships: with grantees, with applicants, with other foundations. In recent years many foundations have been thinking about – and in some cases making significant changes to – their grant-making processes so that they are based on building trust and developing relationships with grantees. Similarly, at ACF we often hear conversations about the importance of collaboration between foundations and what it can achieve. However, working in different ways has implications for the allocation of foundation resources and can entail some fundamental changes to a foundation’s overall approach and structure.   

The group aired a number of knotty questions covering divergent board and staff views, accessing a wider applicant base, giving and receiving feedback, and ensuring foundations and their funding practices are fit for the future. ACF will work with the group’s chair Chris to synthesis all the ideas raised and will develop a work plan for the next six sessions, including inviting external experts and hearing from critical friends.

 

Meeting #2 (April 2019) - Are grants the past or the future?

Amy Solder from Nesta and Alice Millest from the European Venture Philanthropy Association (EVPA) joined the second meeting of the working group which looked at the question ‘are grants the future or the past?’

To kick off, the group plotted the range of tools being used in their own organisations, from different types of grants to carrying out programmes and campaigns, to new models of finance.

Amy and Alice then presented to the group. Based on lessons from Nesta’s recent report Funding innovation: a practical guide, Amy summarised the range of funding tools that characterise the funding landscape. Amy also talked through Nesta’s approach to funding, which provided insight into how foundations might consider risk and the impact of their funding. Alice complemented this by talking about the opportunities presented by venture philanthropy, and how methods used in the technology development field could be applicable to how funders develop their own programmes and projects. Alice posed the question of whether grants are always the most effective way to achieve impact.

These provocations sparked a lively discussion. Reflections included: how well foundations meet need and demand; what else foundations can offer beyond grants; the uniqueness of grants present in comparison to some other tools; and the need to deploy resources for maximum impact, regardless of the tools used.
The group then debated two propositions: one side argued that grants have had their day, and the other that grants still have a key role to play. It was broadly agreed that there is still a place for grants, although whether they are always the best solution was hotly contended. Key issues the group considered were: the ability and desire of organisations to take on alternative models of finance; the need for capacity building and non-financial support; and whether philanthropic funding had a unique role to play in filling gaps or leveraging other types of support.
 
Blog: 'Choosing the Right Funding Tool', by group member Anthony Tomei

 

Meeting #3 (June 2019) - 'Relational' funding

The Funding Practices working group’s third meeting was kindly hosted by Facebook, where Beth Murray stimulated discussions on the topic of ‘relational funding’. Beth leads on Facebook’s Workplace programme and spoke from her perspective of Facebook’s engagement and relationship with its users. She also presented her research funded by Winston Churchill Memorial Trust into the characteristics and behaviours of high-performing tech companies and how these might be relevant to charities and foundations.

While the term ‘relational funding’ is commonly used in the sector, there is relatively little to define what it is. The group wanted to explore this further by asking what it means, what it looks like, and who benefits from this approach in the context of power dynamics between foundations and grantees.

In considering its definition, there were some common themes arising such as the concept of trust, listening, a willingness to acknowledge that foundations don’t always know best, interdependency and ‘hand shake not hand out’.

Following this initial discussion, Beth highlighted the five key attributes of a user-centred company to provide food for thought:

  1. Be open and don’t see failure as a problem
  2. Be clear
  3. Be frictionless
  4. Be talent-focussed
  5. Continuously seek to improve.
     

The group decided that the term ‘user-centred funding’ made more sense than ‘relational funding’ as it clearly puts the focus on the user (whether that’s the funded organisation or their communities of interest). This led the group to reflect that if you have a user-centred approach it’s very important that organisations are funded properly and have all the resources that they need to do their work.

The group then carried out an exercise to consider user-centred funding from the perspective of both the funder and funded organisation. Reflections included the variation along a spectrum of what can be considered ‘relational’ funding, a need to define what its standards are, and the role core funding can play. Group members also discussed how foundation processes must demonstrate trust and clarity in engagement, and be more open to talking about failure.

 

Meeting #4 (September 2019) - 'Digital'

For its fourth meeting, the Funding Practices working group delved into the topic of ‘digital’. It discussed whether foundations are making best use of ‘digital’ to interact with stakeholders and increase the impact of their funding.

To start, the group endeavoured to define what ‘digital’ means. Various areas of work in which ‘digital’ is used were considered, including communications, engagement and networking, fundraising, grant applications and virtual convening. Tricky issues around privacy and data ownership emerged, as well as the problems that can arise from differences in access to ‘digital’ between rural and urban areas.

The group then welcomed Duncan Parker, Charity and Philanthropy Director at Crowdfunder. Duncan explained how the Crowdfunder platform works and what its potential is for bringing together funders with relevant projects and social enterprises. Duncan’s presentation provoked lively discussions around how digital tools and platforms such as Crowdfunder can support funders in reaching out to different communities of interest.

Following a fruitful Q&A session that touched on Crowdfunder’s legal structure, impact, monitoring, and criteria for success, the working group broke off into smaller circles to answer: ‘How can we use digital better to interact with stakeholders, increase impact, reach diverse actors and carry out policy and advocacy work?’

The groups raised points around improved communication and connectivity through virtual meetings, educational webinars, and videos for applicants. Some groups also pointed out the benefits of 'digital' in measuring and monitoring with real time information, efficient grants data analysis, digital audits, as well as compliance with GDPR.

The working group identified potential improvements in the use of 'digital' to engage young people, build communities and develop audiences. It was emphasised that 'digital' is merely a tool and a means to an end, rather than the end in and of itself, which – with the right investment and training – can advance, strengthen and create new avenues for social impact.

 

Meeting #5 (November 2019) - grantee/recipient perspective

The working group’s fifth meeting considered the perspective of the grantee/recipient, and the inherent power dynamics within a foundation’s relationship with its grantees. The group were joined by Warren Carter who leads Moulsecoomb Forest Garden, a grassroots community organisation and provided an insight on the challenges faced by grantees. 

Warren argued that monitoring and reporting processes needs to be simplified as foundations place too many demands on funding recipients. He posed that foundations should aim to build long-term relationships with grantees and urged foundations to consider different levels of literacy and the increasing demand for services that charities are faced with. He sees the funder relationship as one-sided in that foundations fail to put in an equal amount of time towards being accessible, offering feedback or visiting applicants. 

The group also welcomed Nick Perks, an independent consultant who is helping to pilot GrantAdvisor in the UK. GrantAdvisor is an online service which allows grantees to leave public, anonymous feedback for funders as well as advice for future applicants. It aims to create greater transparency and address the power dynamics that can shape some of foundations’ typical mechanisms for obtaining feedback. It also facilitates a dialogue as funders can respond to the feedback they receive.  

The presentations generated lively debate around how funders can enable and encourage feedback from grantees. Warren’s criticisms resonated with the group, who felt that foundations ought to question their own processes and the requirements they place on applicants. Members argued that requirements should be stripped back and made proportional to the funding on offer. Others suggested that the sector could collaborate to develop common principles and standardise grant reporting, as explored by IVAR.

For the funder relationship to be more equal, the group agreed that foundations should be transparent about their own processes. It was felt that funders should be honest about what they can and cannot fund, and more open with the feedback they give to grantees in order to encourage honest feedback in return. Other members stressed that foundations need to be ready to listen to the feedback they ask for, even if it is difficult to hear.

It was argued that funders should do more to be visible and accessible to their grantees. This could mean actively seeking feedback at different points of the funding process and through different avenues. It could also mean signposting available methods of communication and assigning a named person for the grantee to contact. Frequent, ongoing communication can help to build trust and a longer-term relationship, which can encourage more honest feedback. While reflecting on the session, some members shared that they will be looking to clarify the language used by their foundation to make guidance more accessible. 

 

Blog:' Thinking big, acting small', by group member Rhiannon Bearne 

Blog: 'Foundations and the art of the soluble' by group member Anthony Tomei

 

Meeting #6 (January 2020) - Applying a DEI lens

The working group met to consider how foundations can apply a DEI lens to their funding practices. To stimulate discussions, we welcomed Cleveland Henry and Kate Hainsworth from Leeds Community Foundation as speakers. Leeds Community Foundation are members of the DEI coalition and came along to share they are taking a DEI approach in their work.

Using ACF’s pillars of stronger foundation practice in diversity, equity and inclusion as a framework, Cleveland shared his experience as a trustee of Leeds Community Foundation and the journey they are on to embed DEI across their funding practices. Actions have included designating a ‘trustee champion’, collecting and analysing data on applicants, reviewing and amending recruitment processes, and publicly stating their commitment to being diverse, equitable and inclusive.

The group followed up with questions on staffing, recruitment and the board. This was seen to be a key area where foundations could make changes, but it was often complex. The group also reflected on their own foundations and in particular their relationships with the communities they serve. It was commented that a good and granular understanding of where applicants are coming from can help foundations listen and invest strategically, but developing that understanding and relationship takes time. There was also a discussion about the importance of going beyond ‘visualising’ diversity and internalising it as an organisation – in all its forms.

Following the discussion, the group broke into pairs to consider from the perspective of their organisation:

  1. Who are your ‘communities’ and how can you meet their needs through your funding practices?
  2. What might you need to change about current practice?
  3. What are the barriers to change and how might you address them?

The group discussed steps that they had already taken and identified areas where more work needed to be done. Bringing in people with lived experience on decision panels, taking more risks and reviewing application processes were among existing practice and the group discussed the nuances of undertaking different approaches. For example, simplifying application processes by using online portals can be more open to some groups, but others may have issues with connectivity or accessibility. Flexibility was highlighted as an important factor in applying a DEI lens across funding practices.

For the final part of the meeting, the group reflected on themes that had emerged in previous meetings. It noted how its exploration of ‘funding practices’ had been broad and expansive, ranging from values to mechanisms to behaviours. It also identified the power imbalance between foundations and funded organisations as a fundamental issue and at the heart of discussions on DEI. Flexibility and intentionality again emerged as guiding principles by which foundations should carry out their work.

 

Meeting #7 (March 2020) - Collaboration and leverage

The Funding Practices working group met for its final meeting at the offices of Community Foundation Tyne and Wear and Northumberland (CFTWN) in Newcastle. The topic for consideration was ‘collaboration and leverage’ and we were delighted to be joined by Adam Lopardo, Director of External Affairs at CFTWN.

As an introductory exercise, the group considered the experiences of collaboration in their own foundation. The following points were made by the group:

  • Leadership is key. The more people who are involved the more difficult decision-making can be so someone needs to take the lead. There has to be a willingness by others to yield power and we must trust each other.
  • If you find the right partner and buy into the joint aim it’s easier to accept a less than ‘front and centre’ role. We need to have the trust and groundwork in place to facilitate this.
  • There is an important point about foundations knowing each other and trusting each other. The Stronger Foundations initiative, any continuation of it or similar initiatives, will be really important to facilitating thi

When asked to think about key words associated with collaboration and leverage, the following were suggested: accessing additional resources, connecting, pump priming/proof of concept, advocacy, strength, trust, reputation, humility.

Adam then presented to the group and talked through the journey which CFTWN has been on over the last five years in terms of its collaborations in the region. The focus of Adam’s role was to facilitate more funder collaboration and investment and increased sector support on governance and business planning. CFTWN became the eyes and ears of funders not based in the region. CFTWN spent a lot of time reaching out beyond the region and joined ACF as a result, which opened them up to a room of collaborators.

Following Adam’s presentation, the Chair opened up the discussion. The group reflected on the journey that CFTWN had been on and how, through experience and learning from mistakes, it had come to a clear understanding of its role, where it adds value and a recognition that humility is important, as is stepping back when you’re not the right organisation to deliver.

The group felt that there is more appetite for collaboration now than in the past but that this might take a number of forms and not necessarily formal collaboration. They considered whether there is an inverse relationship between willingness to collaborate and a thirst for attribution, recognising that for fundraising foundations it is important to be able to demonstrate impact.

The group went on to discuss the following questions: ‘what are the most successful or challenging examples of collaboration/leverage’? and ‘what were the key ingredients of success and what were the issues where it didn’t produce the results you’d hoped for’? The following observations were made:

  • Collaboration flowing through one person entails a lot of risks.
  • We are involved in an initiative where all involved are known to each other, and there is a clear lead. It’s a very safe environment in an area where we’ve funded before.
  • Successful partnerships are borne out of alignment of perspectives, a pooled fund, quick decision-making processes, a willingness to cede control to the lead partner and for them to feel empowered to take the initiative.
  • We need flexibility and autonomy rather than having to work through a slow bureaucratic process. We need to take time to work out what the joint vision is and how to work together. We also need to be flexible about the detail of how to get there.
  • Power – if there’s one organisation that has a disproportionate amount of power, this can have a massive impact (e.g. if they go and leave a vacuum).
  • Communications are key – people sometimes hear what they want to hear.
  • When you bring the most money to the table people assume that you want to be in the lead and want to please you. This can lead to a circular conversation driven by power.
  • To do it well, a relationship takes effort, resource and capacity.
  • Collaborations can sometimes take a long time to work, and you have to stick with it.
  • I ask myself five questions before embarking on funder collaboration: are you trying to solve the same problem? How big a role do you want to play? Do you trust your partner? Do we share the same values? Do you have the same theory of change?

This was the final meeting of the Funding Practices working group. The final report on this theme will be published in the summer 2020.

Further reading

Below you will find a suggested reading list, which the working group identified and considered as part of its deliberations. If you would like to send suggestions to us, please do by emailing Max@acf.org.uk

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