Building trust on both sides is key to a successful funding relationship, according to a report from the Lloyds Bank Foundation for England and Wales.
The funder has today released its Five Years of Funder Plus report and has identified five key lessons from the initiative. As well as building trust, the report found that properly identifying the support needed was important, grantees need to be empowered, investing in leadership was important and that sustaining change is vital.
The report said: “Grantees must trust that being honest about the areas in which their organisation needs to develop won’t jeopardise a future funding application.”
It added that charities should also be able to say no to funding where the relationship will not work, but need to trust that grantmakers understand their organisation and the challenges and opportunities.
On the other side, the report said grant managers should trust charities to engage in good faith and be committed to acting on support.
“Trust takes both parties well beyond the usual power dynamics between funders and the funded,” it concludes.
Sonia Roberts, chief executive of supported employment and education charity Landau, said: “Charities need options but also to take ownership over the support they are offered and to be able to say no if it’s not right for them or isn’t working – I hope other funders offer more support, but also as this report suggests, do so in a way that works well for charities.”
Capacity building is a priority
The Lloyds Bank Foundation for England and Wales report also says that building the capacity of grantees is important.
It suggests that charities should aim to build capabilities rather than just temporarily fix short term capacity issues and should request and manage the type of support they receive, the basis and timeframe, and be able to turn support down if necessary, with no implication on funding.
Roberts said: “No matter what day to day pressures we’re facing, charity leaders need to have room to understand their needs and prioritise their own development, the development of staff and the organisation’s mix of skills – and not be afraid to seek help to do so.”
Paul Streets, chief executive of the Lloyds Bank Foundation for England and Wales said: “I know from visiting small and local charities that they really value and rely on grants – but this report has revealed that for some, the space, funding and permission to invest in capacity building is worth even more.”
He said the foundation is committed to doing more work in capacity building over the next five years, through a new strategy called Reaching Further, and will continue to share its insights with the industry.
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