Funding the Future: a 12-step method to develop the sector's income

Report considers how to make the most of an uncertain future after the 'years of plenty'

NCVO: set up the Funding Commission in 2009
NCVO: set up the Funding Commission in 2009

The Funding Commission was set up by the National Council for Voluntary Organisations in February 2009 to make proposals for funding the sector over the next 10 years.

Its 88-page report, Funding the Future, says "the nice decade" and the "years of plenty" are over and the country is going to see the biggest spending cuts and most radical changes to public services since the Second World War.

The outlook for the voluntary sector is therefore uncertain, it says: "But if the right steps are taken now, we believe it is possible to look forward to a time when civil society organisations will be stronger and more sustainable than they are today."

Its recommendations include:

- Restructuring Fund: £60m The government should establish a Restructuring Fund worth £20m a year for three years. It should fund the costs of legal advice, human resources, IT and communications support associated with restructuring. A quarter of the fund should be earmarked for rationalising national, regional and local infrastructure.

- Big society grants: £27m The government should fund a series of small grant programmes to benefit small, local civil society groups. This should be in addition to the Communities First fund already announced by the Office for Civil Society.

- Increasing Impact Fund: £15m The Big Lottery Fund and other funders should set up a stream worth £5m a year for three years to help civil society groups measure their impact. Those groups would be expected to publish impact assessments and evaluations in their annual reports.

- Better Asking campaign: £10m

The NCVO should work with the Institute of Fundraising, the Fundraising Standards Board, Acevo, the Charity Trustee Network and the Charities Aid Foundation to secure funding for a Better Asking campaign. This would improve fundraising effectiveness and increase giving from £11.3bn in 2008/09 to £20bn in 2020.

- Financial capability: £2.8m

The Charity Finance Directors' Group should work with umbrella bodies the NCVO, Navca, Acevo, Skills - Third Sector, business schools and training providers to develop financial literacy programmes for voluntary sector chairs, treasurers, chief executives and finance directors.

- Trading up: £1.5m

Funders should be encouraged to provide high-risk venture capital to intermediary agencies such as UnLtd and Venturesome for investment in social enterprises. The NCVO and the Social Enterprise Coalition should promote partnerships between national charities or commercial companies and social enterprises.

- Mutual benefit with the commercial sector: £700,000

The NCVO, CAF and Business in the Community should convene a working group including the CBI, the Institute of Directors, representatives of local chambers of commerce and Rotary Clubs. The group should encourage civil society organisations to seek support from those small businesses and companies that work in the social media and financial services.

- Investment of assets: £200,000

The Association of Charitable Foundations should secure the resources to carry out a survey of its members' attitudes to social investment.

It should develop guidance on social investment.

- Good grant-making: £200,000

All funders, including local authorities and parish councils, should consider light-touch, small grant programmes, targeted at local community groups. Grant funders should share knowledge and information about which interventions work best.

- Commissioning for the future: no cost specified

All government funding should be directed at achieving better outcomes through greater use of social clauses and more pooling of funds. Service users should be involved in specifying user outcomes. They, and the civil society groups that represent them, should also be involved in judging preferred tenders, as long as they are not also part of the system of provision.

- Attracting new private capital: no cost specified

The government should underwrite social gilts, social impact bonds, social investment bonds and community share issues for voluntary sector groups providing young people's services, health and social care services and working to prevent reoffending. The report says it is possible to attract £10bn of new private investment into the sector over the next 10 years.

- Government endorsement: no cost specified

The government should endorse all the recommendations in the report.

In numbers:

£20bn: Commission's target for giving by individuals in 2020 - roughly twice the current annual amount

£2bn: Commission's target for giving by companies by 2020 - up from £1.2bn in 2007/08

£32bn: Potential total income by 2020 from giving, trading and company donations, up from £20.7bn in 2007/08

£117.4m: The estimated cost of all the commission's recommendations, to be met by voluntary, commercial and government funding

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