Paul Streets: What 35 years of the Lloyds Bank Foundation has taught us about funding

Perhaps the next three decades will see us grow bolder and more confident in our voice and position across society

Next month, Lloyds Bank Foundation will turn 35 years old. In those 35 years we have distributed a total of £475m in grants to thousands of charities across England and Wales. 

It might sound like a long time, but we are a newbie compared to some of our other foundation friends, such as The Henry Smith Charity (established 1628).

With finite resources and so many competing and worthy demands, the key is to be clear about what you do – and what you don’t – fund, so would-be applicants know whether to use their scarce time bidding. 

We have always been focused on small, local organisations. Sometimes, larger numbers of small grants go to grass-roots community organisations. Sometimes, fewer but larger and longer grants focus on more specialised charities, addressing complex social issues like domestic abuse, homelessness and mental health, as we do now. 

Neither approach is necessarily better than the other. The key for us has always been building active relationships with those we fund.

This is possible thanks to regionally based staff who can build a depth of knowledge and understanding and, in turn, provide support and advice. 

All of it is underpinned by long-term funding and, crucially, support for our independence from our partners in Lloyds Banking Group. 

Funders can make a big difference to individual organisations, but won’t fix issues at a systemic level through grants alone. 

For the past seven years we have sought to use what we learn from those we fund to influence the wider sector, environment, and policy and practice.

Our current model is about leverage: within the organisations we fund; within the locality in which they operate through our place-based work; and in the wider system, through our influence on national and local policy and practice.

In 1985 we were a child of the Thatcher era when charities had largely voluntary income, including grants from organisations like us that were often used to pick up the pieces of what was not done by the state. Albeit one increasingly “contracted out”.

Over the past 35 years, perhaps the most substantial change has been the relationship of charities to government. 

Charities have been variously ignored by the government under Thatcher; courted under Blair/Brown with the Compact and the rush to become part of government delivery with our piece of the contracts; humoured under Cameron with his Big Society; and then, increasingly marginalised under the coalition.

We have yet to discover what Boris Johnson’s government wants of us, but if Covid-19 has any silver linings, there is at least a recognition by local and national government that charities have been essential to local responsiveness. 

Funders have often sat outside this, many being independent of government for sustenance – but in that time, the best of us have changed significantly. We have shifted from highly prescriptive project or pilot funding to core and even unrestricted funding, having clearer criteria and becoming far more transparent. 

All of this is welcome, but we remain the icing on others’ funding cake; about as material in total to the charitable sector as legacies, albeit focused largely on smaller organisations.

When I reflect on the past 35 years, it feels like the charitable sector as a whole has too often defined itself by its relationship with government, rather than as independent organisations. 

After all, for the past two decades government income as a proportion of total charity spend has been in decline. 

Covid-19 feels like a major disrupter. On the one hand the government has recognised our value, on the other it has shown that it cannot, or will not, pick up the funding shortfall we all face.

Perhaps over the next 35 years, we will be bolder and more confident in our own voice and position across society, rather than being pushed from pillar to post by fickle friends in town halls and Whitehall. 

If so, charities, and those we exist to serve, will be all the better for it. We are here to serve the people we are here for – and should be less worried about those who happen to be in power at the time.

Paul Streets is chief executive of the Lloyds Bank Foundation

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