Ensuring enough funding through coronavirus
For many charities across the UK, fundraising efforts have been profoundly impacted by Covid-19. Some may have been affected in a positive way – benefiting from the abundance of new government loans and grants now on offer. However, for many, securing funds in the current climate is a struggle that has engulfed the sector.
The contrast between having access to limited resources and still needing to provide all-important services – some of which have experienced increased demand since the start of the pandemic – is a challenge that’s pushing many charities to the brink of dissolution.
Some charities will be lucky enough to have built up reserves over recent years that has allowed them to financially fight the impact of Covid-19. But for those that rely heavily on a steady stream of fundraising events and initiatives to keep them afloat, lockdown has had an undeniable impact on their financial stability.
While the criteria for accessing grants is widening, the government provision of funding remains an extremely competitive process.
Although charities cannot rely solely on this source of income, there are measures charities can take to secure support to ensure they make it out the other side of the pandemic and remain operational.
Exploring all options
As a direct response to Covid-19, the Government has provided £750 million worth of financial support for voluntary, community and social enterprise organisations. This includes £150 million sourced from dormant bank accounts and building societies, as well as £85 million from the Community Match Challenge, where donations from philanthropists, foundations and grant-making organisations are matched by the Government on a pound for pound basis.
While applications to the National Lottery £200 million Coronavirus Community Support Fund are now closed, the National Lottery Community Fund continues to offer grant opportunities for charities in emergency situations. Charities with shops can also apply for retail grants and funding under the furlough scheme, which will help them to keep staff employed and shop fronts open long term.
At a regional level, many local authorities will also allow charities to apply for discretionary grants, with several funds having widened their remit to provide additional funding to organisations. Councils can also cover the costs or provide grants for personal protective equipment (PPE) when requested to ensure charities can continue to operate in a safe manner.
It’s important charities remain proactive in recognising when new funds become available and the deadlines when they need to apply. Most of the windows for application are incredibly short so it’s easy to miss out on opportunities to secure funding if you don’t stay up to date with the changes in government initiatives.
Applying for funding
Due to the severity of the pressures faced by charities as a result of the pandemic, funders are being inundated with requests for support. As they only have a finite amount of resource to help charities, the selection process has become a lot harder and many funders have tightened their requirements.
To increase their chances of success, charities should include lots of examples and pictures in their applications to really showcase the good work they do. Questions should be answered fully, and charities should clearly demonstrate how the funds will be used in a concise cash flow forecast. This also shows good financial practice and makes it easy for funders to see what they’ll be supporting.
Charities should put themselves in the funder’s position and ask – why should we get funding over everyone else? Is our need and requirement more than others? How do we meet the brief? All these factors need to be considered by the charity if they stand any chance of securing funding.
Another way to increase their chances is to not send the same application to everyone. It’s important that charities tailor their pitches and ensure their examples meet the funder’s objectives.
Assessing a deal
Before applying for funding, charities should look at the application’s terms and conditions very carefully as there may be reporting requirements, as well as outputs, they need to achieve if successful – failure of which could be very serious.
Charities’ management teams should go through these carefully and assess exactly how they will adhere to the terms and if they’re achievable. Reasonable terms would be those that are within the charity’s reach and abilities and not overly costly to achieve. Unreasonable ones are those that are more geared towards the larger charities where they may have the expertise in-house that small charities may have to pay for, which can defeat the objective.
Implementing a strategy
The situation that charities currently find themselves in means cash can run out very quickly. Donations are not coming in as much as they’d like and the need for quick decisions is vital so charities can decide what their next move should be.
Funders often have a rigid structure in place as to when board meetings are conducted, when decisions are made and how quickly they can release funds. This means a quick decision often isn’t possible, so charities should implement a funding strategy to ensure they’re not overly reliant on any one source of income. They should have a plan B and C to fall upon should they not be successful in receiving funding.
There are practical things a charity should do to cope, including: conducting a detailed cash flow on a week-by-week basis so they can forecast as far as possible whether there’s going to be a cash emergency; having a cost cutting strategy in place to ensure only critical expenses are incurred; approaching other funders at the same time to spread the risk; and establishing how much reserves are to be used to get them through the tough periods.
Looking to local businesses
While many companies continue to operate remotely – which means many of their fundraising efforts for charities have been placed on the backburner – there are still ways for them to raise donations while remaining socially distant.
Virtual coffee mornings and raffles are a great way to not only fundraise for struggling charities, but also to get teams that are working remotely to engage and come together for a common cause.
If there’s one thing the pandemic has taught us, it’s the importance of community spirit. People are looking for ways to help others through this difficult time, so you’d be surprised by how many businesses would be happy to help with fundraising efforts if approached.
Charities can’t be afraid of asking local businesses to get involved – whether they be regular donors or those which are new to the charity. Especially if you provide them with fun, Covid-safe ideas to raise money, this can be launched as a way to encourage communication and collaboration among staff members, while working to support a worthy cause.
Creating a community
Charities should not only look for support within their community of local businesses, but also engage with other charitable organisations which are operating in the area for advice and guidance on how to navigate these difficult times.
Forming a strategic alliance between charities can be mutually beneficial – both in terms of knowledge sharing and attracting funds. By forming a partnership, charities can work together to increase or combine their public interest and ensure that charitable benefits continue to be applied at a local level.
A report by the Office for Civil Society stated that economic hardship and a growing sense of local identity was fuelling demand for “place-based” giving in the UK. With this in mind, local charities should work together to boost awareness of the services they provide across the region. This, in turn, should help them to secure funds.
Merging for money
Charities with similar aims should consider working together and creating a strategic alliance. Even if it’s only a one-off project, this can help charities to save costs while still delivering the same level of output, gaining efficiency from working together.
Alternatively, charities seeking more drastic measures may considering formally merging with another charity completely. They could also pass their reserves over to another charity with similar aims which might be able to make better use of them while being in a stronger financial position.
These options may seem drastic, but sentiment, perhaps, needs to be set aside and consideration for maximising the delivery of charitable aims brought to the centre.
Merging charities should be a serious consideration. It’s important that charities should be prepared to acknowledge that in the long term, a merger could better achieve their aims and, ultimately, serve the best interests of the community they serve.
A multi-faceted approach
There are a number of options available to charities which are in need of additional funding and, although these may not always be the most desirable ways to secure support, they can, ultimately, lead to the continued provision of important services.
While this is an incredibly difficult time for charities, there are a variety of resources available to help them mitigate the impact of Covid-19. Now, more than ever, charities need to be tapping into every pocket of potential resource and encouraging communities to come together – and collaborating among themselves – to unite for the greater good.
