Trusts
and charities are the Tom and Jerry of the third sector, locked
in a close but fraught relationship, one in perpetual pursuit
of the other.
A straw poll of both grant making trusts and their recipient
charities earlier this year found that both are dissatisfied
by the situation. Charities feel they must devise a stream
of innovative new projects to attract any funding from trusts,
while trusts are disappointed with the lack of interest from
the recipients of their funding after the cheques have been
cashed.
Bob Cornell, director of Carus Consulting, which carried out
the poll, says this latest survey commissioned by a trustee
of Four Acre Trust is a wake-up call for both parties.
“It is the call for action from a grant maker that is
so unique,” he says. “There is still a strong
sense of having to struggle to sustain good practice. We are
very anxious that the paper leads to real action. Whether
the action is individual trusts taking stock of their practice
and undertaking thorough reviews or charities risking being
more honest in their approaches, we will have to see.”
It’s clear that practical changes must be made to the
working relationship between the two parties. Lloyds TSB Foundation,
for example, offers long-term grant security as well as funding
for charities’ core costs. Chief executive Linda Kelly
says this is a “healthier way to work”. Project
funding can be problematic as it may detract from the main
focus of the charity, so trusts need to embrace core cost
funding if their relationship with charities is to mature
and become more efficient. “In a way it’s easier
to do project funding because you know what you’re putting
your money into. There is an intro, but there is also an exit
strategy,” she says.
“[But] if you look at it from the charity’s point
of view you do get charities trying to create projects so
they can get their money. It’s a slightly circular argument.”
Kelly says a long-term relationship can only be fostered if
there is regular, local contact from the trust. For larger
trusts this could mean setting up regional teams. “Our
approach to it has always been to have a very strong field
based team,” she says. “When you’re in the
locality it does make for easier links because people have
local knowledge.”
For smaller trusts this can be difficult – they are
unlikely to have enough staff – but regionally based
trustees can help. Relationships can be encouraged by making
fewer grants for larger sums, she says.
Smaller trusts are keen to make clear that part of the problem
is that charities do not always understand their priorities
and their limitations. Vivien Stapley, trust secretary at
the Sir James Knott Trust based in the north east, said charities
must realise asking the same trust for the same amount of
money every year is unlikely to yield results.
She says despite charities’ requests, the trust is unable
to commit to long-term funding agreements because it also
has a fluctuating annual income. “We rely on our investment
income. We can only make a general forecast on what our investment
income is going to be over the forthcoming year,” Stapley
says. “If we were to commit for years ahead it would
commit us to something we’re not guaranteed to be able
to pay. It would restrict us in our new giving as well.”
The Sir James Knott Trust also prides itself on being reactive,
supporting charities suffering a shortfall on a promising
new project or providing funding for organisations dealing
with crises such as the Foot and Mouth outbreak of 2001. “If
new initiatives and new projects come up it means that we
can’t support those things,” she says. “We
like to think that we are there to engage smaller groups as
well as established groups and big organisations. This is
why we prefer not to commit long term.”
If charities want to maximise their chances of building a
relationship with a grant making trust they must target the
right ones, making sure their requests are realistic given
the size of a trust and the scope of its work. One way a charity
can secure its future income from trusts is to employ a dedicated
trust fundraiser.
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Denise Parkes, head of trusts at the National Autistic Society,
says trust fundraising is a different skill to fundraising
from other sources and a dedicated employee is essential to
improve a charity’s income from the trust sector in
both the short- and longer-term.
“If you’re serious about trust fundraising then
yes, you need [a dedicated person] because the biggest element
of trust fundraising is to build up a relationship,”
she says. “For smaller charities it is sometimes difficult.”
Parkes also recommends the personal touch to recruit and retain
new trusts. This should include making contact both on the
telephone and face-to-face. “I would always encourage
people to telephone funders before you make an application.
I think it’s good to speak to the gatekeeper because
you get a lot more information than you can get from the books
and websites,” she adds. “Try and invite those
people to your events so they feel as if you’re being
serious about their commitment rather than just taking the
money and running.”
Acknowledging a successful funding application with a telephone
call and a letter of thanks can pay dividends for charities
looking to foster a lengthy relationship with a trust. Passing
on annual and project reports can also help a trust feel valued
by a charity.
But key to ensuring financial stability, while keeping numerous
trusts onside, is a diverse funding strategy. Rebecca Ingram,
trust manager at international development charity ActionAid,
warns that relying only on particular trusts for annual funding
is a risky strategy. ActionAid is able to attract two or three
year funding programmes from many trusts, but usually relies
on other funding streams if financing from these trusts dries
up or is under review.
“I think everybody needs to have a diverse fundraising
base because you don’t have security otherwise,”
she says. “If you put all your eggs in one basket and
then drop the basket you’re in trouble.”
Ingram says there is no one panacea to the problem, but better
communication could be encouraged by employees for trusts
and charities visiting one another to better understand their
work. “It’s very complex because it’s about
relationships. Seeing the work is a really good motivator
for people whether it’s prior to funding, or once they’ve
given to be able to see what’s happened.”
No single answer
The call for action from the Four Acre Trust is, after all,
based only on a straw poll. Many charities have confirmed
that they have found it easy to build up secure and lasting
relationship with grant making trusts allowing them to lever
in three year, or even longer, funding commitments. It is
difficult to make generalisations about the unique experiences
of trusts and charitable organisations given the variety
of their size, income and ambitions.
Ben Wittenberg, head of policy and research at the Directory
of Social Change, says talking in black and white terms
about the charity-trust relationship is impossible. “It’s
so difficult to do any kind of representative research because
trusts vary hugely. Just using the term ‘grant making
trusts’ as a starting point is putting you in a really
awkward position in the first place. You have to ask what
you mean.”
He says trusts have a very good reputation as funders, genuinely
more innovative and open in their approach to funding applications
than statutory funders, and this reputation leaves charities
anticipating excellent performance. He warns that more needs
to be done to disseminate the best practice experiences
of the largest, best known trusts down to the smaller, local
funders less experienced in their approach.
“Because there is quite a lot of information about
the ones that are doing good things, it creates this massive
expectation of grant making trusts as a whole,” Wittenberg
says. Trusts linking up to work together to distribute cash
ring-fenced for certain charitable aims could improve the
future of trust fund giving.
Clearly both trusts and charities can make operational changes
to oil the cogs of the relationship between the two in grant
giving. But as trusts feel permanently chased by charities,
Wittenberg says the best way to improve communication is
drop the sales pitch. “Have a conversation where money
isn’t on the table,” he says.
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