6 funding trends that will help boost your organisation's income
Following this year's Future Funding conference hosted by Inspire2Enterprise, a free support service for social enterprise, Paul Henry head of enterprise and partnership development sums up six current funding trends that stood out as future opportunities for social sector organisations.
1. Grants aren't drying up – With government keeping a tight hold on the purse strings, there are fears that grant funding is drying up. But that’s not altogether true. Grants are out there so do look for them. Given you don’t need to pay grants back they’re great for starting something from scratch or plugging a funding gap that will allow you to deliver your services. There are numerous funding websites and tools available including Funding Central and GRANTfinder. Also look up your local Community Foundation to find out what grants are available in your county. But beware grants are not a sustainable form of income. That’s why we’ve put together a list of trends to help you scan the funding horizon, figure out your options and diversify your income streams.
2. Contracts accessible to social sector organisations are growing – 81% of voluntary sector income from government is now earned through the delivery of contracts; an increase from just 49% in 2000/01” (Source: NCVO UK Civil Society Almanac 2014). With this in mind is your organisation contract ready? By that we mean can you accurately cost and price your product or service? Can you measure and demonstrate your impact? Do you have the ability to partner with other organisations to deliver larger contracts? Do you know who is or will be, responsible for issuing the type of contract your organisation is interested in delivering and have you engaged with them to any degree?
By answering these questions now, you will be ready to put together a bid as soon as an opportunity becomes available.
3. Prime contractors working with social sector sub-contractors is an increasingly popular way of delivering services – Sub-contratcting is the delivery of specific activities for a third party (the prime contractor) as part of a larger project. Some contracts are just too large or just not appropriate to be delivered by one organisation. It may also be that different organisations with specialist knowledge and experience are needed in order to deliver different parts of a contract.
Subcontracting provides a way for organisations to be paid for delivering services without having to tender for the overall contract or manage the ongoing relationship with the contractor.
The development of prime contracting models as a way of delivering public services is becoming ever more common. Whether we like it or not, the delivery of rehabilitation, training and employment services using this approach is growing in popularity within central government.
4. European funding is increasingly within reach – Remember the news that the 39 Local Enterprise Partnerships are responsible for administering the EU Structural and Investment Funds Growth Programme (ESIF). For the 2014 to 2020 funding period, the European Regional Development Fund (ERDF), the European Social Fund (ESF) and part of the European Agricultural Fund for Rural Development (EAFRD), will be brought together into the ESIF growth programme. The top priorities of this programme include innovation, skills, employment and social inclusion. Each LEP has published its EU Investment Strategy. Familiarise yourself with the strategy and think about how your organisation can help the LEP achieve its objectives. Find ways to engage with your LEP(s) through meetings, events or being part of their communication databese.
5. Social investment is getting easier to understand - look into it. It might not be for you but then again it might. The most popular form to date is a basic loan from an ethical bank or investor but there are other sorts of finance out there, and some include a mixture of grant and loan finance. The best people to talk to are the social investors and ethical banks themselves. Find a useful list here. Alternatively there’s a brilliant new programme recently launched by Big Lottery and the Social Investment Business called Big Potential. It’s basically a multi-step process to learning about social investment, working out whether it’s suited to you and becoming investment ready. You can read more about it here.
6. Crowdfunding is growing as a succesful means of boosting income and engaging customers or service users. If you’re not yet acquainted with it, crowdfunding is a means of raising finance for a project or venture by asking for monetary contributions from a large number of people. It has been around for ages, but in its most modern incarnation pitching for those monetary contributions happens online. Rewards-based crowdfunding is the most common form. This is where you pitch to ‘the crowd’ on a crowdfunding website, seek to engage people in your project and ask them to put money towards it in exchange for a reward. And the reward can be anything. It might be tickets to an event you’re hosting or something totally unrelated to your work. Although it’s not a sustainable means of income, it’s a fantastic marketing exercise and means of getting people behind your work. If you’ve got a force of people keen to get behind your idea/ use your product it’s a brilliant way of drawing in other funders and investors.
Whichever source of funding you decide on, make sure it is right for your organisation. Be true to your social mission and put the needs of your clients, beneficiaries and customers first.
*One last fantastic resource: finance finder on gov.uk, see what’s out there.