What is grant fundraising?
Grants are a type of funding offered by grant-making bodies, such as the National Lottery distributors (including the Big Lottery Fund, Heritage Lottery Fund and the Arts Council), charitable trusts and foundations. Some public sector authorities, such as local councils, NHS trusts or police bodies, also give out grants for specific, local projects. You may also find grants available from global corporations, where they have a corporate social responsibility (CSR) programme (for example, Virgin, Shell or GlaxoSmithKline).
Grants are a form of ‘restricted’ funding. This means that the funding must be spent on a specified programme of activity or an agreed set of resources. Depending on the size of the grant, you may have to provide a detailed budget to the funder, as well as evidence of expenditure, a programme evaluation, and regular progress updates. You may also have to sign a grant agreement or contract.
In the UK, there are grants available to voluntary organisations from £100 up to £5m+. Find out more about funding from the National Lottery and trusts and foundations.
Why do it?
Grant funding can be used for many types of voluntary sector activity. The benefits, once you’ve secured the grant, are that you know how much money you will have for the period of the grant agreement. Most grant funders pay quarterly, in advance (or in one lump sum for smaller projects). This means that you can employ staff and run activities, knowing that you already have the funds required. However, you should always plan to secure new income well before the end of the project or grant period. If you plan to continue the grant-funded activity, you need to ensure that you have continuous funding to retain staff and maintain services for your beneficiaries.
When are grants useful?
Grant funding can be useful when you’re starting out, or to pilot a new idea. Small grants programmes like Awards for All are relatively easy to apply for and can help you run one-off projects to engage your target beneficiaries, and to find out how impactful your planned activities are.
Grants are also useful for ongoing programmes that require a subsidy – ie you cannot generate any other income to cover the costs of the activity. Many voluntary organisations rely on grants to deliver services across health and social care, environmental awareness and education.
Grants are often essential if you are thinking about buying land or buildings. Most funders will ask you to raise match funding for land or buildings purchases, and the application process is likely to be more complicated, with rigorous checks about how you will sustain the asset in the longer term.
Can grants fund your core costs?
It’s important to note that most funders prefer to fund specific programmes, rather than ‘core’ or ongoing running costs. It is very hard to find grants for core costs, so you should ensure that your grant budget includes a contribution to the core costs, in proportion to how much of those costs relate to your programme activity.
For example, if you’re running a programme with two part-time project officers, using rooms within your office, your programme budget should include a proportion of your finance, HR or payroll person’s salary (to process the salaries of the project officers, carry out their induction etc), a proportion of the amount you spend on utilities (as the officers will need heat, light and power in the rooms they are using), and rent.
You should also think about whether you can fund your core costs from different income sources. See our overview of funding and income for more information.
Find out more about full cost recovery on the Big Lottery Fund’s guidance pages.
How to apply for grants
First, you need to find the funds. It can be daunting to search through thousands of grant programmes, but tools like Funding Central make it easy to find funds that are relevant to your organisation.
Next you’ll need to make an application. For small grants, this might be a simple form where you’re asked to give a brief description of your proposed activity, who it will benefit, how you know it will work, and how much money you need to make it happen.
For larger grants, you may need to go through a two-stage application process. You’ll probably need to provide:
a description of your planned activities, with milestones and timescales to show how you’re meeting the funder’s priorities
a set of proposed ‘outcomes’: ie the difference that you will make to people, communities or the environment
a detailed project budget
evidence of need: data, case studies and monitoring information that tells the funder about the needs of your beneficiaries, and why you think your project will meet them
a description of your organisation’s experience and relevant skills
a plan for monitoring and evaluating the impact of your proposed activities.
This can take several months, or longer for large capital projects. You should plan your grant pipeline at least six months in advance. If you’re successful in your application, you’ll need to carry out your activities in the timescale you’ve agreed with your funder.
It’s important to keep up a good relationship with your funder. Although most funders will not guarantee that they can fund you again (and many will not fund the same project a second time), if you do apply again, they will look at how you’ve delivered against previous grants. If you think the project is not going as you expected, you should always talk to your funder and explain how or why you want to change things. Don’t leave it till the end of the project.
Remember that funders want to spend their money. They don’t want to have to take it back. They’d much rather work with you to ensure that their grant creates impact, than find out that you’ve just pushed on with a project that wasn’t working.
Who to involve
Grant funding can be a lonely process – often one person within an organisation is tasked with filling in lots of applications. However, it can be useful to involve more people.
Use your communications staff to help you put together case studies and quotes that can demonstrate evidence of need. These can bring your application to life and show how well you are connected with your beneficiaries.
Your senior management team should be meeting to discuss a funding pipeline at least every six months – this should involve looking ahead at what opportunities are available, and assessing the likelihood of securing funding from each opportunity.
You should always ask someone else to read a grant application before you send it in – ideally someone outside your team or even organisation. Remember that a grants officer may know nothing about your organisation or your beneficiaries, so it’s useful to check that what you’ve written makes sense to someone else.
Should we employ a professional fundraiser or bid writer?
If you’re a small organisation, it can be very costly to employ a consultant to write bids for you. Remember that they can’t do everything for you: you’ll still need to spend time educating them about your organisation and proposed activities. Even the best fundraisers can’t guarantee success – they are still up against hundreds of other applicants and are applying for a limited pot of money. Although it’s time consuming, it’s usually more efficient for smaller organisations to keep bid writing in house. You’ll have the added benefit of building up your own knowledge about where funding opportunities are, and how to write good applications.