Many charities prefer smaller unrestricted grants to larger restricted ones, research shows

Joe Saxton, co-founder of nfpSynergy, says the study shows how grant-makers can make their money go further

Joe Saxton
Joe Saxton

Eleven per cent of charities that responded to a survey on good grant-making would rather take an unrestricted grant of £10,000 than £100,000 of restricted funding, according to a forthcoming report.

Taking Nothing For Granted, to be published on 3 July by the sector research consultancy nfpSynergy, examines what charities think a model grant-maker should look like.

The report, based on a survey of more than 400 charities, extended phone interviews with 13 and a face-to-face forum attended by 60, says that they would on average prefer about £70,000 in funding if it was unrestricted to a restricted grant of £100,000.

It says that smaller charities are more interested in unrestricted funds than larger organisations. Twenty-five per cent of charities with annual incomes under £500,000 say they would rather have £10,000 in unrestricted funds than £100,000 in restricted funds.

Joe Saxton, co-founder of the consultancy and one of the report’s authors, said: "It’s clearly a way grant-makers can make their money go further. If a grant of £10,000 or £20,000, spent the right way, can achieve as much as £100,000 spent in a way charities don’t need, you can fund five charities for the price of one."

The report says that large charities are less dependent on grants but more successful at applying for them. Charities with annual incomes of more than £15m get just 2 per cent of their money from grants, but are successful in 31 per cent of grant applications, it says. Charities with incomes under £500,000 get 33 per cent of their incomes from grants, but only 19 per cent of applications are successful.

A clear, transparent application process is what charities want most from a funder, according to the report – 37 per cent spontaneously mentioned this when asked for how they thought grant-makers could best develop. The next most common theme is better feedback about why grants were unsuccessful, mentioned by 20 per cent of respondents.

The report says that feedback from charities suggested that a model grant-maker should meet 11 criteria:

  • Has clear criteria about what it will fund
  • Gives feedback on applications
  • Provides up-to-date information on grants
  • Makes quick decisions about which charities it will fund
  • Has a quick first-stage application and a more detailed second stage
  • Accepts electronic applications
  • Provides core funding, not project funding
  • Provides multi-year funding
  • Allows applicants to have personal contact
  • Does not require too much paperwork
  • Disseminates the information it possesses about what works and what doesn’t.

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