Research suggests relationships between grant-makers and charities need urgent repair.
It's rare for someone in the sector to criticise the practices of their own organisation - let alone those of others. So when John Bothamley, trustee and founder of the Four Acre Trust, drew some harsh conclusions about the relationship between grant-making trusts and operating charities (Third Sector, 17 May), it made some waves.
"Like characters in a Victorian melodrama, some grant-making trusts take the role of the rich bachelor, and some charities behave like nervous spinsters worrying about their dwindling financial resources," Bothamley declared after commissioning a survey of 400 trusts and charities.
Bothamley's research suggests there is a broad culture gap. Although most charities support longer-term contracts and better communication with grant-givers, 92 per cent of trusts said they did not find long-term funding "of benefit". Seven out of 10 trusts disagreed with the statement that meetings or dialogue with grant applicants would improve the relationship between giver and receiver.
Funding for core costs was another bone of contention. Charities felt trusts were resistant to core cost awards. Trust figures showed that only 27.5 per cent of grants were awarded for such day-to-day activities.
For Bothamley, the results are proof of the sector's "arcane practices", which he feels are in desperate need of improvement. He points out that if only 10 per cent of trusts changed from one-year to two-year grants, this would save £20m in administration costs that could instead be given as awards. He also believes charities should seize the opportunities they get to build longer-term relationships.
But improving relations might be easier said than done, according to Giles Morris, a fundraiser and freelance writer. With such strong competition for grants, says Morris, charities cannot be blamed for behaving like nervous spinsters.
"Trusts are deluged with applications at the moment, so it's no wonder fundraisers feel nervous," he says.
Morris agrees that most trusts are unwilling to discuss longer-term funding.
He argues that charities could overcome this by trying to work in partnership with each other. "If charities could align themselves, they would have a very strong pitch," he says.
According to Steven Burkeman, consultant and former board member of the Community Fund, the key to improving the relationship lies with a trust's board - especially when it comes to the subject of core funding.
"Trustees get their thrills vicariously," he says. "You'll get much more satisfaction if you see a picture of some new building in the annual report."
Burkeman concludes that more communication between trustees and charities is needed to get past this psychological barrier of funding core costs.
"There needs to be much more direct contact," he says.
However, not everybody thinks the relationship is as bleak as Bothamley's research suggests. Sarah Wheeler, trusts and foundations manager at the Institute of Cancer Research, says times are already changing, especially when it comes to trusts committing themselves to long-term funding. "Our experience is that some of them have already started to do that," she says. The institute recently began a 10-year relationship with one trust and has several two or three-year contracts with others.
Wheeler can, however, understand why some trusts don't want to tie up their grants. "It might be difficult for trusts to commit to long-term funding because of the nature of their income," she says. "A lot of them were affected by the fall in the stock market a few years ago. It also gives them greater flexibility to respond to disasters and emergencies."
This flexibility is desirable for both trusts and charities, says Clare Thomas, chief grants officer at the Bridge House Trust. Bridge House's recent stakeholder consultation revealed that most charities don't want anything more than a three-year relationship if doing so would mean fewer grants. "We asked them if it would be better for us to fund more long-term grants - for five years, say - which would inevitably mean fewer grants," says Thomas. "There was a resounding 'no' from stakeholders."
If grant-makers tied up all of their grants, new charities wouldn't be able to climb on board the funding bandwagon, Thomas warns. "It would work against ethnic minority charities in particular," she says. "Trusts can be strong supporters of them, and they wouldn't get public money."
But Bothamley is certain further change, or at least discussion, is needed.
"We're all working in this industry together," he says. "We ought to be more engaged with each other."