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 at of the soluble' by group member Anthony Tomei

 

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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