Charities spend £900m a year applying for grant funding, new report reveals

Action Planning’s response - By Linda Trew

As a fundraiser I am sure that I am not the only one to have had the conversation with supporters about the cost of fundraising. When donors have worked hard to raise funds for a cause they are passionate about, and make a commitment to support that cause, they want to see the money being spent directly on the beneficiaries. “I don’t want it going into the big pot,” is a phrase I have heard often. The fact that charities rely on professionals who are paid a salary can be a difficult concept for some people to accept.

So I can only imagine the response of the general public if this report, published by The Law Family Commission on Civil Society and brought to our attention in the Civil Society news, was published in one of the daily newspapers instead. The staggering cost of £900m a year to the charity sector simply for applying for grant funding is toe curling, even for us professional fundraisers. I have to admit to being surprised at the size of the figure. Of course, what the article doesn’t state is how much that £900m raised, which is a vital part of the story that is missing. Return on investment is key.

A cumbersome process

Nevertheless, the article does raise a very good point: trusts applications can be cumbersome. It can sometimes feel like you’re taking part in the Crystal Maze challenge, leaving you physically and mentally exhausted by the end – only to find out four months later that, although your application was of interest, you were not successful due to the high demand. As stated in the article, the Esmée Fairbairn Foundation funded only 6% of applications received through its open process in 2021. The competition is high.

Spare a thought, though, for the grant-making trusts themselves. They too are keen to be able to spend as much money as possible on actual grants to charities, rather than on the administrative process of receiving, reviewing, assessing and responding to an ever-increasing volume of applications. One trust administrator we spoke to recently said that she had a long list of proactive things she wanted to do to help grantees, but she was struggling to keep up even with the daily flood of new applications.

So at the same time that charities are having to spend more and more so that they can submit ever larger numbers of better and better applications, grant-making trusts are having to spend more and more of their resources on dealing with those applications.

How can we improve?

Grant making trusts and charities have exactly the same interests – they want to help more causes and more people. Theirs should be a symbiotic relationship, rather than an adversarial one. So what do we do?

There probably isn’t a simple answer to this but we can all do a little. Trusts can make their application processes clearer and simpler (ideally collaborating with each other more, to iron out unnecessary differences in process or reporting requirements); and charities can be more discerning in the applications they submit, cutting back on the volume of totally speculative applications that have little chance of success.

It’s really down to charity fundraisers to be good stewards of donors’ money and spend it wisely (not by completing a 60 page application for a £500 bid, as was highlighted as one of the examples in the report). We need to ensure that if we want to benefit from trust and grant income, we have the resources to do so and to do it well.

We have to research the marketplace thoroughly, develop a strong pipeline and then ensure each application is tailored for the funder, to make the chances of success as strong as possible. No more of this scatter gun approach, just applying to everyone in the hope that someone, somewhere may respond. And forget the copy and paste function too, they really don’t all want to hear the same thing – trust me.

Expertise saves money

Charities need to understand that grant fundraising is a specialist skill. It can be a false economy to ask an inexperienced staff member to complete applications to grant makers – the applications will probably be weaker and they will probably take longer to prepare. It is often much better value for money (and quicker) to use an expert trust fundraiser, whether on the payroll or outsourced.

I must, of course, declare an interest here – Action Planning provides a trusts bid writing service for many charity clients. We aren’t always successful – not least because of the huge volumes of applications that trusts now receive – but we sincerely believe that this service helps our clients to save money, and time, by preparing carefully targeted, well researched and tightly written applications.

We all know that trust fundraising can be extremely lucrative, bringing in significant funds, so charities can’t afford to wait for an overhaul of the grant funding system; it could take years, if it ever happens at all. Although some funders may be willing to make changes to their application processes, there will always be differences in process, style and format and we will always have to dance to their tune. Hopefully, though, as we all make an effort to improve, it may become more of a slow, steady waltz rather than a frenetic break dance (I’m showing my age!)

For more information about our trusts bid writing service, contact sean.tully@actionplanning.co.uk