Charities would gladly sacrifice income to have more control over how their funds are spent, says a new survey.
Research carried out by nfpSynergy on behalf of new charity lottery monday revealed that 57 per cent of organisations believe £1 of unrestricted funding is worth £2 of restricted funding.
Forty-two per cent said they would happily trade in a £1m restricted grant for less than £600,000 of unrestricted income, which could be spent as they, rather than funders, choose.
Nine out of ten charities said they wanted to increase their percentage of unrestricted income. And nearly three-quarters admitted that they struggled to obtain the level of unrestricted funding they needed.
"A higher level of unrestricted funds is crucial for the vision, direction and development of a voluntary organisation," said one respondent.
Another charity said it was often unable to find funding programmes whose criteria matched its work.
Steven Burkeman, a consultant and former board member at the Community Fund, urged funders to respond to the need for more 'no-strings' sources of income. "I feel very strongly that funders should pay attention to this," he said.
"There is a tendency for funders to want to feel something specific is happening as a result of the grant that they make.
"It's not that charities want to splash money around, but they want to fund their core operations, such as computers and offices and all the unglamorous stuff without which nothing else can happen. At the moment they are stuck between a rock and a hard place."
Joe Saxton, co-founder of nfpSynergy, said: "Unrestricted funding puts you in control. Organisations are fed up with having to torture their work to fit funders' demands. How do we put organisations on an even financial keel? Part of it is full cost recovery, part of it is ensuring they can cover core costs from unrestricted funding."
Monday said the findings demonstrated the need for an alternative lottery providing a stream of unrestricted funding.
- Survey by monday lottery and nfpSynergy finds strong desire for more unrestricted income among charities
- Majority of charities would sacrifice money to have more control over how funds are spent
- Strong feeling that restricted funding streams are inflexible Call for funders to listen to and respond to findings.