The decline in grant funding from government sources has "liberated" foundations and is a good thing because such grants were not given out in an effective way, according to Paul Streets, chief executive of the Lloyds Bank Foundation for England and Wales.
Speaking at the annual conference of the Association of Charitable Foundations in London yesterday, Streets told delegates that the government was such a poor grant funder it was a blessing that it was reducing its supply of grants.
Government grants to the charity sector totalled £2.2bn in 2012/13, compared with £2.6bn in 2011/12 and £5bn in 2001/02, according to data from the National Council for Voluntary Organisations.
"The sector has been liberated by the fact that the government isn’t a grant funder any more," said Streets. "The government was such a bad grant funder. Thank god it has stopped giving grants."
Streets said that the government’s move away from grants gave foundations an extra reason to improve their dialogue with the government to persuade it to consider what it could do to better support the organisations they were funding.
He said that when he worked in the area of public health, before starting at the Lloyds Bank Foundation in 2013, a message would be circulated from the government each year offering money. "It was like a sweepstake," he said. "There was no logical process."
Streets spent almost four years as director of public and patient experience and engagement at the Department of Health and two years as chief executive of the now defunct Health Development Agency.
He said the government’s failure in this area was not its fault. "It didn’t know any better," he said.
Streets said it was crucial for foundations to take advantage of their independence to engage with government. "We’re one of the few bodies that can go to government with no wish for any money from them, with no cap in hand," he said. "Because Whitehall has been so stripped back, there’s so much poverty of ideas in Whitehall now that they really welcome constructive people who will go forward and help them think about what they could do to address issues more effectively."
Speaking about the importance of foundations collaborating with each other, Streets said he felt foundations spent "hours and days gazing at our navels in intellectual discourse that achieves nothing". He said such discourse was all well and good, but "if nothing changes, what’s the point?"