Charities are having to be increasingly savvy as they look to compete for a smaller pool of funds from grantmakers amidst the COVID-19 outbreak
COVID-19 has transformed the relationship between charities and grantmakers, such as corporate partners, government funders and foundation trusts.
There is simply less money for funders to invest and distribute to good causes, amid financial uncertainty globally caused by the pandemic.
According to National Council for Voluntary Organisations (NCVO) data and research manager Lisa Hornung: “Investment values have fallen in 2020 and so will have the reserves of some organisations.
“In the longer term, the fall in investments will impact on the ability of grantmakers to give out funding to the sector, since many of them are heavily reliant on investment income.”
The pandemic has also altered grantmakers’ funding priorities, with long-term recovery from the pandemic and supporting at-risk communities increasingly key to their decisions.
Knowing what grantmakers want to spend their falling funds on is key to success for charities amid COVID-19.
Targeting grantmakers is especially important as many charities are currently being left vulnerable by an over-reliance on public donations, which have been hit by the cancellation of in-person fundraising events and charity shop closures during lockdown.
The fall in public donations to charities could be around £1bn, according to estimates in July this year by online fundraising platform Omaze.
According to Blackbaud Europe’s Status of UK Fundraising 2020 Benchmark Report, 27% of charity professionals say their income has fallen, an increase on the 21% who said there had been a decline in 2019.
Diversifying income streams, especially by ramping up the search for grant-giving could ensure the long-term future of those charities reliant on the public.
A key way COVID-19 has transformed grant-giving practice and funders’ finance management has been to ensure hardest-hit communities are being supported.
This includes supporting those at a higher risk of severe cases and complications from COVID-19, such as Black, Asian and Minority Ethnic (BAME) communities, those with disabilities and the elderly. Communities at risk of isolation amidst the pandemic, such as LGBT+ people and refugees are another target group for grantmakers.
In August the National Lottery Community Fund and the Global Fund for Children set up the Pheonix Fund to support BAME-led charities and their relief efforts amid COVID-19. The Fund is worth £1m and is offering grants of up to £20,000 this year.
“The Phoenix Fund aims to put racial justice at the heart of COVID-19 pandemic response,” according to Fund organisers.
“The initiative will support a network of Black, Asian, and Minority Ethnic charities and groups in England that are working in the heart of their communities, providing essential and emergency services, support, and education tailored to the BAME community.”
Another grantmaker to target at-risk groups amid COVID-19 is the National Emergencies Trust (NET). It has created a £12m pot of funding for at-risk communities, with a strong emphasis on funding digital and telephone support.
It is also looking to ensure that the grants are being handed out to those most in need by involving consortia of expert groups.
So far five consortia have been appointed to distribute the funding. This includes the LGBT+ Consortium Helpline Alliance and disability support network DPO COVID-19 Coalition. Another is a refugee and asylum seekers support consortium led by the Refugee Council.
“This pandemic has created new needs on an unprecedented scale, and exacerbated existing challenges, said NET deputy-chair Gerald Oppenheim.
“Helplines play a key part in the new partnerships because they offer accessible help to those unsure where to turn, or unable to access other services.
“Our partners’ helplines have already been oversubscribed because of the pandemic and our research suggests that this demand will continue, as more people seek support from the sector for the first time.”
Another priority area amid COVID-19 for grantmakers is supporting the mental health needs of communities and shoring up charities’ emotional wellbeing support online.
An example is the Duke and Duchess of Cambridge’s charity the Royal Foundation. In July this handed £1.8m in grants to ten charities to boost their mental health support, in particular, pivoting help online for frontline workers amid the pandemic.
This includes funding for The Mix to expand its group chat service for young people.
Meanwhile, Best Beginnings and Home Start were handed funding from the Royal Foundation to help new and expectant mothers. This includes a pregnancy and parenting app and digital outreach programme.
“Over recent months we have all been in awe of the incredible work that frontline staff and emergency responders have been doing in response to COVID-19, but we know that for many of them, their families, and for thousands of others across the UK, the pandemic will have a lasting impact on their mental health,” said the Duchess of Cambridge.
As well as funding online support, grant makers themselves are also embracing digital in the way they operate their finance management. In February, the Association of Charitable Foundations urged grant makers to use “digitally savvy teams” to improve their effectiveness in distributing funding.
This includes improving their online processes to ensure their funding is more accessible to charities and so they can better measure their impact.
Grantmakers funding may be falling, but there is plenty of opportunity for charities to access funding by taking the time to understand how COVID-19 has changed grant giving practice.