Why funders should focus on long-term success

Charities need funding – badly. With costs soaring and services ever more in demand, charities need financial support to ensure that they can deliver lasting impact in the future for the communities they serve. 

However, funding can be notoriously hard to come by. With limited funding schemes available and a wide variety of projects needing financial support, it can be difficult to know where money is needed most. Often priority is given to short-term projects that will see immediate impact – but as any charity professional knows, the needs of their communities are rarely short-term and, to that end, no project is ever really complete.  

Instead, funders should look at investing in charities in the long-term. Following the pandemic and, more recently, the cost-of-living crisis, charities have focused on building long-term resilience, exploring how to make themselves sustainable while continuing to deliver impact for their cause. While crises have necessitated short-term firefighting, charities are beginning to look more at the bigger picture. 

This was a trend Charities Aid Foundation noted in 2022, explaining that “Multi-year funding...should become the norm and should be unrestricted.” It added that “While charities need core funding, giving charities the time and space to identify areas where they need to strengthen their organisation, be it leadership or financial acumen skills for senior leaders, will be vital to their long-term success.” 

For digital projects, allowing charities the time to explore the possibilities in detail would be invaluable. Digital technology advances quickly, with new tools emerging that can transform a charity’s efficiency and its chance of success.  

However, while digitally mature organisations are four times more likely to achieve their mission goals, three in five charities say it is a challenge to find funds to invest in their devices, software, and infrastructure, according to the 2024 Charity Digital Skills report. Research from NPC found that 69% of charities identified lack of funding as a barrier to engaging more “with the digital and data agenda”.  

Digital technology and data can be transformative for charities. Digital fundraising has become a vital source of revenue for charities in an increasingly cashless society, while digital services have made it easier for charities to reach service users as and when they need to. It has made charities more productive, more operationally efficient, and allowed them to do more with less. And it wouldn’t be possible without long-term funding.

Because digital transformation is an ongoing, often complex process. Digital tools develop over time and our skills develop alongside them as we grow more accustomed to their capabilities.  

It is important that charities continually review their digital tools and skills to ensure they are serving their purpose. Nothing will wed them to an outdated piece of technology more than the lack of funds with which to replace them. Tech will stop being functional, efficiency will decrease, and the initial impact seen when it was first adopted will wane. Long-term funding prevents that from happening.  

In short, long-term funding allows charities to make confident, future-focused decisions, with a more informed outlook on their financial status. Impact may not be immediate, but it will be long-lasting.  

The core benefits of long-term funding  

Financial stability 

One of the biggest – and most obvious – benefits of long-term funding is financial stability. Economic uncertainty has affected the charity sector greatly, with many warning of the risk of insolvency at the height of the cost-of-living crisis.  

Long-term funding ensures that charities can strategically prepare for the future without fear that they will lose the funds to support it. It gives them a reliable source of income with which they can plan services, map out needed infrastructure, and invest in new revenue streams.   

Ability to innovate 

According to our recent survey, expense is the biggest barrier to delivering or improving charity services, cited by two in five charity professionals. Long-term funding, however, mitigates against this, allowing charities to identify areas they can improve and apportion adequate funds to do so.  

For example, with long-term funding for digital projects, charities can make plans in the event of obsolescence, allowing them to continually review the performance of their technology in the knowledge they have the funds to improve it if needs be. 

Donor confidence 

Charity donors want to know that the charity they support is being managed responsibly and that the money they give is going to directly help the communities in need. Long-term funding allows charities to reassure donors that their impact will not be short-lived, that donations are not a flash in the pan but rather an investment in the progress of a cause.  

Knowing what the future holds for the organisation, and what vision it is working towards, allows donors to build a connection with your cause and encourages them to commit to their own long-term support, perhaps with regular donations. This, in turn, gives charities even greater financial stability, on top of the funding they have already received. It’s a win-win for everyone.