Opinion: Third Voice - Private donors are a boon for community groups

Stephen Hammersley, chief executive of the Community Foundation Network

Third Sector reported recently that large swathes of the community sector are under threat because of the Government's move towards contracts, and 58 per cent have had grants reduced.

But hasn't it always been the case that government funding is problematic for the local groups that are the key to real community revival? Have we forgotten the oft-repeated complaint that the process for securing state grants and the conditions attached squeeze out the innovation and dynamism that make local groups so relevant to local communities?

But although government support is welcome, £8bn is donated annually to support charities in the UK. Perhaps community groups need better access to these funds, competing more effectively with the few 'branded' charities that currently scoop up the lion's share. Maybe community groups could increase the size of the market for donated funds by engaging new donors who are attracted by the immediacy of their impact and the importance of mobilising people at the grass roots.

If we allowed ourselves to dream for a moment, we might imagine a world in which more funding is raised from the community diaspora by the collective marketing of community groups to donors. Maybe these donors could even be attracted to committing funds over the long term so that the funding for the community is more certain. And we would probably want an organisation to manage these funds on both the communities' and the donors' behalf, working over time to align both sets of interests so that communities are strengthened and donors' objectives are met.

Well, the dream is in part a reality through the work of the UK's 56 community foundations. In the past year, the long-term funds they raised from private donors leapt by 30 per cent to £120m, which will be added to the £50m of grants made from annual donations and grant-making 'contracts'.

Perhaps the most interesting dynamic is where state and private sector funding streams can be aligned and leveraged. It is possible for government or lottery funding to pump-prime private sector giving as long as the delivery of public sector grants programmes are managed by organisations, such as community foundations, that will use the knowledge and networks created to engage with private donors.

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