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This current cost of living crisis is seen by many members as just the most recent in a long line. Reference is made to the ‘ABC’ of crises: Austerity, Brexit, Covid; this latest feeling more urgent and pressing, compounded as it has been by the preceding crises.
What is immediately clear is that funders are taking not just a short to medium-term view but are also considering the long-term impacts of this crisis. Funders we spoke to are also recognising the need for flexibility. For example, for already awarded grants, some funders are allowing increases to previously set amounts of funding to help with rising costs (such as food and fuel). In the case of new applications, some are recognising the need for longer and larger grants.
With such decisions also comes a change to funders’ overall approach, and many are reviewing strategies and ways of funding. Those we spoke to highlighted that unrestricted core funding is being increased and prioritised, allowing grantees to just get on with what they know how to do best. There is also a move toward minimum reporting requirements to reduce the administrative burden on grantees.
Most are seeing a large increase in applications, which is no surprise. With this though, there is a need to be more prescriptive when it comes to the evaluation of applications. Submissions for grants are often tenuous applications, trying to ‘shoe-horn their projects into criteria that don't really fit’.
Funders spoke of looking at a house of cards nearing a fall, leading to a domino effect in the sector, with grantees reporting that the cost of living crisis is a threat to their continued existence. There is a genuine sense of desperation
During interviews, funders spoke of looking at a house of cards nearing a fall, leading to a domino effect in the sector, with grantees reporting that the cost of living crisis is a threat to their continued existence. There is a genuine sense of desperation.
Local authorities are concerned about the sustainability of projects and programmes in their neighbourhoods that are funded by the Neighbourhood Community Infrastructure Levy (NCIL), where investment is likely to take a downturn, reducing the overall budget for allocation.
Coupled with this is staff burnout and staff leaving the sector who are facing their own living costs increase and are having to seek higher paying jobs. A lack of new people coming into the sector only adds to the sense of foreboding. Some organisations are referring their own staff to their own services. There is a perfect storm facing all areas of funding which is being intensified by the current situation. There is a real need to shore up the sector and recognise that a long-term solution needs to be implemented.
From our members’ perspectives, this starts with the acknowledgement that grantees want to be allocated more core and unrestricted funding to help keep central staff in place along with a need to secure more long-term, multi-year grants.
There is a perfect storm facing all areas of funding which is being intensified by the current situation.
Above and beyond this and more positively, there is a genuine desire from our members to work more closely together, not just in the allocation of funding but, also in being more innovative in funding approaches and processes. Whilst there are always likely to be elements of emergency provision needed due to unforeseen events, the way in which this is responded to can be the focus of new ways of future working for funders. The opportunity for funders to come together, collaborate and share ideas is one highlighted by many, so too the learnings from the pandemic that must not be forgotten. As one funder put it, “Funders need to work together and not just throw emergency funding at organisations. Enterprise might be the key to getting out of this situation.”
For more details of our research into funders' response to the pandemic, please download our slide pack here.
