10 things every CEO should understand about raising money from grant-making trusts

Joe Saxton looks at what CEOs need to understand about grant-making.

Based on our recent survey data, a report from 2012 and a sprinkling of personal experience, Joe Saxton looks at what CEOs need to understand about grant-making.

  1. You need ‘grant-whisperers’ It’s simple to imagine that it is quite easy to fill in a grant application form, whack it out, and wait for the money to roll in. My experience says life is rarely quite so easy. There is a knack to it. Some people become ‘grant whisperers’; they understand the silken words that grant makers want to hear. Application forms are like exams and you need to know the words, phrases and eloquence that grant makers want to hear.

 

  1. You need a constant supply of young, innocent projects to slaughter. Most (not all) grant makers want to fund projects. Something innovative yet proven, unique yet low- risk, low on core costs and full of impact. And your grant whisperer’s job is to take projects you have been doing for years and turn them into mutton dressed as lamb.

 

  1. Work out how many grant makers’ criteria you fit. As well as lots of projects you’ll need a raft of appropriate grant-makers to apply to. So, if you are a charity for left-handed violinists and there are only ten grant makers who fund that, then be prepared for limited funding.

 

  1. You want freedom and grant makers want to nail your feet to the floor. Our research shows that most charities would prefer unrestricted income and would take 50% of a restricted income grant if it were unrestricted. However, most grant makers want to give to that shiny new project, and you’ll have to smile and say thank you so much!

 

  1. You need to be good at your project accounting. The chances are it will take more than one grant maker to pay for some projects. So by the time you have half a dozen grants covering different timescales, paying for different interventions, and different salaries/staff, you need to make sure you are really on it, when it comes to working out who has paid for what. Or you might have to give a grant back!

 

  1. You might hope to have success for around 1 in 4 applications. Our recent research shows that the most common success rate for applications is about 30%. While some charities get much higher success, some as high as 100% (well that’s what they said), others are lower. It also depends how long an organisation has been doing applications, and what sector it works in (remember those left-handed violinists). So if you had a success rate of 1 in 4 in the first year you would be pretty damn happy.

 

  1. You’re more likely meet to a Unicorn than get useful feedback on a rejected application. Charities always want to know why they didn’t get a successful grant decision: what about the application was wrong? In our research there are very few grant makers who are good at this. This is partly because it’s not easy to do – often your very good application can simply be trumped by an excellent application. And when you have five or ten applications for every one you can fund, it takes a lot of time and energy.

 

  1. Bring a pillow. Grant makers take a while to make decisions. If you get a grant decision in under 3 months, you can wake up now - you’ve been dreaming. 6 months is good and 12 months or more is not unheard of at all. Grant makers take a while and that is partly because they are the land that normal governance rules forgot: it’s quite possible your grant decision is waiting for a trustee meeting.

 

  1. Depending on your size you’ll be doing very well to raise more than half a million a year from grants. In our recent survey 85% of our three hundred or so respondents raised £500k or less from grant-makers. While many of these were small charities, the reality is that the need for great projects, new grant makers to apply to, and the need to be successful with applications means that total income from grants has a natural ceiling, for all but the most successful or large charities.

 

  1. All that said, grant making trusts are one of the best sources of income for small charities. It would be easy to imagine from all that I have written that I am down on raising money from grants. Far from it. Grants are a critical source of income for many charities, especially small ones. However, to secure success in this area, it is essential to understand what is and isn’t possible, and realise which skills are needed to win those grants.
Joe Saxton

Subscribe

Enjoying this article? Subscribe to our newsletter to get the next one first!