A report by the Institute for Voluntary Action Research calls on grant-makers to take more risks on who they give funding to

Grant-making organisations must adapt to ensure they are not getting in the way of the charities they fund, according to a new report.

The report, Duty to Care? How to Ensure Grant-Making Helps and Doesn’t Hinder, published today by the Institute for Voluntary Action Research, says grant-makers need to take more risks on who they fund, make their funding application process easier and have better conversations with grantees.

The report builds on a similar report by Ivar from 2012 by surveying the 20 charities questioned for the original report on their views on their funders, as well as drawing on the findings of the Lloyds Bank Foundation’s report The Value of Smalland its own report The Possible Not the Perfect, both from last year.

“The day-to-day existence of voluntary organisations continues to be precarious, and they are reporting that the challenges facing the most vulnerable in society are deepening in many ways,” today’s report says.

But, it says: “While their operating environment remains complex, organisations and funders alike are adapting, innovating and reforming their relationship.”

Funders wish to change, it says, out a sense of solidarity with those on the frontline and a desire to reduce the impact of their own processes on the organisations they wish to support.

But it says, not all funders have yet adapted and it issues them with a warning to “not unwittingly get in the way”.

The report issues a call to action, first urging funders to consider whether they are taking enough risk.

To take more risk, it says, foundations should more fund organisations that are financially vulnerable and those which are trialling new ways of doing things.

“Because they have independent incomes, foundations are uniquely placed to take on the risks that voluntary sector organisations face, including financial precariousness, the challenges of chasing contracts and the instability of the political landscape,” the report says.

It also calls on funders to make their application processes more useful and less burdensome by trimming back the bureaucracy involved and ensuring they are not repetitive

And, it says, funders need to have “better conversations” with the organisations they fund to build mutual understanding and honesty.

“Building relationships takes time but it can also be the very best use of time,” the report says.

“The funders in this study who have put “conversations” at the heart of their processes for grant relationships have learned much about themselves as well as their grantees. They enable mutual understanding very quickly.”

The report says Ivar will be responding to its own call to action by exploring with foundation boards and staff how they could improve the way they work.

Source: Third Sector