News
12 June 2009
Looking at the sector over the next ten years
As financial worries continue, charities are growing increasingly concerned about the future. So now seems a great opportunity to examine current funding practices and set a new agenda for funding, which is exactly what the Funding Commission, set up by NCVO in February, are doing.
The Commission will look ten years into the future and ask, what are the opportunities and challenges for charities in relation to their funding? What new sources could be developed? and how can the sector make better use of existing resources?
The Funding Commission asked for recommendations from the third sector about what they should focus on within these broad questions. NPC’s position working with both charities and funders puts us in a good position to comment on the funding market. Our response was focused on three areas: the allocation of funding across sectors; outcomes-based funding; and more effective monitoring.
The allocation of funding across sectors
When it comes to allocating funding across different sectors, NPC believes that this should be done firstly based on a priority of needs, and secondly on how effectively the money could be used. In this way, money would be given to people who need the most help, and to charities that will help them the most. We believe this is this is the best way to change people’s lives and tackle social problems. Unfortunately at present, too much funding is still given without proper consideration of need or effectiveness.
Outcomes based funding
Outcomes-based funding is a more recent trend in funding. In our response we state that, if outcome based funding is to be successful, funders without much experience in this type of funding will need advice, to make sure that the outcomes they set are appropriate for charities to deliver on.
More effective monitoring
The current system of monitoring in the charity sector does not make effective use of resources. Information requested by funders is frequently not used in any meaningful way by funders and is of limited use to charities—making the cost of collecting it an unwelcome diversion for charities from helping beneficiaries. Charities and funders need to give more thought to finding ways of ensuring results information collected is of use to both sides, and that reporting requirements are reasonable and proportional in relation to the grant.
From the broad range of responses that the Funding Commission has received, it has now narrowed down its priorities to three things: capitalisation (how to increase capital to support the financial capability of civil society groups), stimulating giving (increasing giving from individuals, corporates and trusts and foundations), and local action (how small, local organisations can make better use of existing funding and how funding practices might be improved).
NPC’s comments influenced the Funding Commission in several points including: how local commissioning is impacting the voluntary sector; how funders do not give enough unrestricted giving; how funding tends to go to more popular causes such as children rather than less popular ones such as prisoners. We look forward to seeing the results of their work in these areas.
You can read NPC’s full submission to the Funding Commission here.
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