Charitable trusts and foundations should offer flexible funding and focus less on impact in order to help voluntary organisations survive the tough economic environment, according to new research.
Turning a Corner: Transition in the Voluntary Sector 2012-2013 was published yesterday by the charity the Institute for Voluntary Action Research. The research is based on its work with small and medium-sized social welfare voluntary organisations and funders, and examines how funders, such as charitable trusts and foundations, could help organisations to adapt.
The report says that during 2012/13 many organisations struggled to cope with austerity, while those that adapted well were helped by a strong understanding of their mission.
The report says that funding for voluntary organisations needs to be flexible. "If funding agreements are overly prescriptive, there is a risk that they will prevent organisations from responding to their changing context in a way that holds beneficiaries at the forefront," it says.
It says support from funders should be "geared towards the accomplishment of an organisation’s mission rather than conforming to someone else’s agenda".
It says: "In our research, we found that organisations that were comfortable with the idea of continuous reflection and review [of their mission] saw this attitude as a useful approach to managing change."
Funders should focus on investing in relationships with organisations and the people with the most knowledge about their beneficiaries, rather than engaging in a "race for impact", the report says.
Trying to measure impact is often inappropriate, it says, especially when funding smaller organisations. "For many smaller voluntary organisations, difference and value may be more appropriately assessed in terms of outputs and outcomes, rather than the scale and coverage implied by ‘impact'," it says.
Ben Cairns, director of Ivar, said the research provided insights into how support from funders could help social welfare organisations to identify and tackle social problems.
"Underlying all of our reflections is the importance of mission – for organisations themselves, but also in their relationships with others," he said. "Specifically, we suggest that collaboration and relationships with funders work best when there is a conscious and negotiated alignment of objectives and an understanding that each party brings value to the relationship in different ways."