Five years ago, when Kate Carroll arrived at Making a Difference Locally, the charitable arm of the retail franchise chain Nisa, she realised a lot of work needed to be done to help the charity live up to its name.
The charity receives 0.6 per cent of the cost of some of the products Nisa sells wholesale to its 2,400 member stores, which raises about £1m a year.
Three-quarters of the money is then returned to the retailers to spend on local projects of their choosing, leaving the central charity with just £250,000 to give out as a funder.
At the time Carroll took up the role as head of charity at Nisa, most of the money, she says, was being given away to the larger, household-name charities.
"I’ve got nothing against the big charities, but our funding comes from pennies, and we’re not going to change the world with pennies," Carroll explains. "But we can make those pennies go further if we’re clever with them."
Since taking on the role, Carroll says, her mission has been to work out creative ways for the charity to make the most impact with the small amount of funding it has to give out.
"We know we could donate that money a million times over," she says.
One of her biggest successes was a grant of £60,000 to the Small Charities Coalition to fund an administrator.
The thinking behind it, she says, was that it would strengthen the whole sector and indirectly have more of an impact than funding a front-line member of staff at another charity.
"We do give the more emotionally driven donations, but we also do the more strategic ones," she says. "We really want to be responsible funders. We feel that anybody can just give money, but we can do something more to help with sustainability."
The opportunities offered by strategic funding can be profound. Many small charities struggle to obtain the money to cover their core costs because the public increasingly wants to see its money going to the "front line", while government moves towards offering contracts for individual projects, rather than grant funding.
Grant-making bodies such as MADL are therefore in a strong position to offer funding that the public and government don’t want to offer, Carroll says.
But being a responsible funder means offering more than just money, she adds. The organisation also offers training and continuing support to its grantees to help them make the most of the money they receive, harnessing it in a way that helps them attract more funding and widens their overall impact.
It tries to keep things simple with an application form that is just two pages long. "I genuinely think one reason that some charities don’t get more funding is that they’re too busy to apply," she says.
If a grant is bestowed, MADL doesn’t demand monthly updates on how the charity is spending the money, unlike some other funders.
"We do keep in touch, obviously, but we also appreciate that, when you are working for a small charity, it’s really hard to keep on top of that when you’re looking for more money and dealing with programme delivery – constant reporting on it becomes another job," Carroll says.
Last year, to mark the charity’s 10th anniversary, it launched its biggest-ever funding round, giving away 10 grants of £10,000 to charities with annual incomes of less than £100,000, which they could spend on developing their marketing.
This stemmed from the idea that many smaller charities might be doing fantastic work, Carroll explains, but lack the time or the expertise to tell anyone their stories, which can leave them missing out on chances to attract funding from larger benefactors than MADL.
And the strategy has started to pay off. Create Paisley, a youth arts charity based in Paisley, Scotland, used the money it secured from MADL to invest in films and a high-quality annual report to showcase the work that it does.
The boosted resources allowed it to recruit more volunteers and secure funding for a full-time role over the next two-and-a-half years for someone to oversee the fundraising, partnership, evaluation and volunteer strategy. Create Paisley project manager Alan Clark says this "will play a significant part in our ability to become sustainable as a charity".
The charity subsequently secured further funding to conduct a feasibility study on offering more services to other charities and housing associations in order to reach more young people, and has secured some income generation coaching for its team.
"This and more has been possible due directly to MADL," Clark says. "We are so grateful for this support and are excited for how it will help us to increase our impact."
Alongside the £10,000 in marketing funding, MADL’s grant award included practical support, with a training day focused on marketing, fundraising and bid writing. "The return on investment for bid writing is one of the best in fundraising, but it takes so much time for small organisations," Carroll says.
As well as challenges with time and resourcing, she believes that for many staff at small charities the overall perception of fundraising also needs to shift.
"People at these charities don’t call themselves fundraisers, because they’re too small to have a dedicated member of staff," she says. "It’s just added to the list of their daily jobs.
"We’re working with people to help them realise that fundraising isn’t a bad thing: it costs money to raise money, and there’s no shame in that.
"But I do appreciate that it can be challenging to convince the boards of small charities that get very into delivery but forget about sustainability."
We really want to be responsible funders. We feel that anybody can give money, but we can do something more to help with sustainabilityKate Carroll, head of charity, Nisa
Looking to the future, MADL has plans to fund a fundraising training day for
hospices in Yorkshire, inclu-ding a myth-busting video using mobile phones that will help the organisations to promote themselves on social media.
"A lot of people don’t understand the role that hospices play," Carroll says. "I really think that if more people knew what fantastic work hospices do in their local communities, a lot more people would give to them."
The fundraising day will also provide an opportunity for the hospice staff to learn from each other, she says.
"It all goes back to how we can make our money go further," she says.
"On the scale of funding, £250,000 a year to spread nationally is not a lot."
Over the past few years, she says, one thing that’s become clear is the need for MADL and its board, largely made up of retailers, to ensure they too have the training and skills they need.
"Five years ago, we had this amazing charity and it was sitting on this money
and had no idea what to do with it," Carroll tells Third Sector.
"Now we’re making it our business to keep on top of trends in the third sector, to really understand how we can make that difference."