Grant-making trusts have reported a fall in the number of applications they have received since the start of the economic downturn, research from the consultancy nfpSynergy has found.
The report, based on in-depth interviews with 21 grant-makers, says that all but one of them experienced a fall in applications in the year 2008/09, and that the number of applications is still recovering to pre-recession levels.
The report says that the effect was particularly dramatic for small, specialist grant-makers. It quotes one as saying: "When it all started to go terribly wrong, everybody was in freeze mode. We didn’t get any applications at all."
Grant-makers interviewed for the report said they were unsure of the reasons for the fall. Possible reasons they suggested included a declining number of charities, reduced resources for fundraising, a reluctance to take on big, one-off projects and the assumption that grant-makers would not have funds to give away.
The report, Inside the Mind of a Grant-maker, was written on behalf of the Institute of Fundraising and the Office for Civil Society. It comes after a report published last year, Taking Nothing for Granted, which was based on interviews with organisations that sought grants.
The report says that grant-makers believe charities are more likely to succeed if they put in fewer applications but make more effort with each of them, if they research the organisations to which they are applying and if they are honest and flag up problems early in the process.
It also makes a series of recommendations to improve grant-making. It says the Institute of Fundraising and the Association of Charitable Foundations should work together to set up a joint code of good grant-making practice, and that the same organisations should set up a discussion forum to help improve grant-making practice.
"We think that a code of best practice is needed, or at least a code of worst practice to be avoided," the report says. "The section on trusts in the Institute of Fundraising’s code of practice could be developed into an equivalent code for ACF members."
It says that grant-makers currently discuss issues through the ACF’s Intelligent Funding Forum, while fundraisers discuss grant-making issues in forums such as the Institute of Fundraising’s trusts and statutory fundraising special interest group.
"A forum where grant-makers and charities can meet, discuss issues and move the overall relationship forward is needed," the report says. "We believe that the ACF and the IoF need to develop one."
The report suggests that grant-makers should be encouraged to develop clear, up-to-date processes, such as two-stage applications, to minimise the amount of time wasted on applications that are not successfully funded. It says grant-makers should think about whether to offer core funding, particularly to small charities.
Grant-makers should also spend more time on feedback for charities they fund, says the report.
"Many charities feel their feedback is poor or non-existent," the report says. "We think that every second-stage application should get individual feedback and that grant-makers should look at aggregated feedback to highlight the most common reasons applications fail. Today’s great feedback is tomorrow’s great success."