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New report looks into the hows & whys of offering unrestricted funding

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A report published today (11 November) examines how and why foundations offer unrestricted funding, with advice on doing so for those interested in enabling funded organisations to have more control over their spending.

The holy grail of funding: Why and how foundations give unrestricted funding is from the Institute for Voluntary Action Research (IVAR) and aims to encourage more giving of this kind of funding.

Over 80 funders have so far signed up to becoming Open and Trusting Grantmakers with IVAR. This means each has committed to enabling voluntary sector organisations to respond flexibly to changing priorities and needs by giving unrestricted funding, or at least making their funding as flexible as possible.

To help them, and to encourage more to join them, IVAR’s report shares funders’ experiences and lessons learned from offering unrestricted funding.

Through the voices of trustees and senior staff from 12 trusts and foundations including Lloyds Bank Foundation for England and Wales, John Ellerman Foundation, and Peter Minet Trust, the report argues that whatever the constraints, and however far along the journey a trust or foundation is, it is worth looking at whether it’s possible to go further in offering unrestricted funding.

The report covers:

Seven ways that enabling funded organisations greater control over their spending adds value, from the improved flexibility and agility it provides to more effective work, and better relationships between funded organisations and their fundersHow and why funders decide to offer unrestricted funding and some of the questions they ask themselves to navigate the opportunities and barriers experienced in enabling funded organisations greater control of their own spendingCommon questions about how to offer unrestricted funding – for example about legal powers, judging impact, and whether unrestricted funding can help tackle challenges around equity and power in funding relationshipsAdvice from IVAR’s group of funders for others interested in offering this

Paul Streets, Chief Executive, Lloyds Bank Foundation for England and Wales, said:

“We are genuinely trying to find a way to get alongside small organisations and be helpful. A perennial question along that journey is about how we get honesty from the organisations we fund. We have learned that being honest with them is a start. And unrestricted funding is a key part of that, because it is expressing faith in people. You can’t overestimate its importance.”

 

Rachel Oglethorpe, Director, Peter Minet Trust commented:

“I saw what a difference it made when I visited charities with different Trustees who brought their own insights and lived experience. When we visited a youth club in South London I could see that the staff really opened up with the Trustee in a way they didn’t with me. Similarly, when we visited a sports youth project with a Trustee who runs a community centre in a neighbouring borough, the staff were really interested in her work with a different local community and felt she understood what their challenges were.”

IVAR is also holding a webinar at the end of this month on the research. Why and how foundations give unrestricted funding will take place on 30 November from 12.30-1.30. Speakers will include Dame Rennie Fritchie, Chair of Lloyds Bank Foundation for England and Wales; Sufina Ahmad MBE, Director of John Ellerman Foundation; and Rachel Oglethorpe, Director of Peter Minet Trust.

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