Seb Elsworth: Lessons from the Lloyds Bank Foundation

Trust and support are important parts of the relationship between funders and charities

Seb Elsworth (Photograph: Claudia Leisinger)
Seb Elsworth (Photograph: Claudia Leisinger)

Last month, the Lloyds Bank Foundation for England and Wales published a report called Five Years of Funder Plus on the lessons from its Funder Plus programmes, the capacity-building support it offers to its grantees.

The foundation is best in class when it comes to making this sort of support available to the charities it funds. Seventy-one per cent of the charities it has supported since 2014 have benefited from some form of capacity-building support – that’s almost 800 grantees. The report highlights numerous examples of the positive impact the support has had. There are some important lessons here for all of us focused on building charities’ resilience.

The foundation highlights the need to build trust and form real partnerships for support to be effectively delivered. This speaks to some of the inherent power dynamics in funder/grantee relationships. For support to be focused on the real needs of a grantee, they need to be confident that exposing their weakness won’t jeopardise the funding they are receiving. The foundation address this in a number of ways: by making the support optional, by offering it once funding is agreed, and by stepping away from providing support once another support provider is commissioned.

Trust must also exist on the funder’s side to have faith that the leaders of a charity know what support they need, can make good choices about how that support should be delivered and are committed to acting on it and seeking to embed it.

The importance of trusted relationships is something we think a great deal about at Access, and we design our programmes to empower charities and social enterprises as much as possible. As we seek to make enterprise development support available to the sector, we have seen that that working with and building on existing relationships is key. In the case of the Lloyds Bank Foundation, there is already a relationship between funder and grantee. The strength of these trusted relationships provides critical legitimacy for offering and accepting capacity-building support.

The foundation champions the importance of diagnostics to ensure that support is really focused on the causes of organisational challenges and not just the symptoms. This should include an independent perspective in that diagnosis, and using it to define a plan and repeat the process to check progress.

The most common areas for support to be provided to grantees are around income diversification and business planning, two areas that are likely to be central to any organisation’s development. Interestingly they are also two areas central to most of the work we fund, and to others who have previously funded "investment readiness"-type programmes. However, I’m surprised to see that governance support was provided to only 10 per cent of grantees, because good governance is usually at the heart of effective organisations. Focusing on leadership development and providing leaders with time to step away from the day-to-day to think about strategic challenges is also a key factor of the way support is provided.

One of the most striking points from the foundation's report is the remarkable value for money of the interventions. This sort of support does not need to be expensive. The foundation says it has spent £4m over the past five years on this support. In reaching 800 organisations, it’s an average of just £5,000 per grantee. As the report outlines: "The scale of our investment in Funder Plus is less than 10 per cent of our spending on grants, but many grantees have told us that the additional support has been as valuable as their grant – and in some cases more."

In the report, the foundation highlights the need for better coordination of the support being offered to the sector by multiple funders. I certainly agree with this.

However, this is not as easy as it sounds. I often hear people asking for mapping of the support and directories that list who funds what so charities can navigate. For sure, more information is a good thing, but this sort of approach would ignore many of the lessons from the Lloyds Bank Foundation and others. For charities to feel that support is more coordinated, they need more than a map and list.

Support needs to be delivered within an environment of trust and legitimacy, and this depends on there being existing relationships and networks on which to build. We as funders need to do the work to join up the sources of support and provide pathways with introductions to different networks and relationships. As different funders with varying objectives, we all want to see more resilient charities able to deliver greater impact to meet those objectives. The Lloyds Bank Foundation’s work is a great insight into how to achieve it.

Seb Elsworth is chief executive of Access, a foundation that helps widen access to social investment for charities and social enterprises

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