3 reflections from the pilot Impact for Growth grants

Making funding decisions is a privilege and not a responsibility to be taken lightly. Having spent most of my career trying to raise money for things I know how much work goes into funding applications - and how frustrating and disappointing it is when a funder doesn’t buy in to what you want to do.

Earlier this month I chaired the first decision making panel for the Impact for Growth strand of the Impact Management Programme. This is a £1.8m grant fund to support social sector organisations to improve their impact management practice, so that they are in a better position to manage their own performance, but also to bid successfully for contracts or attract investment. At our first meeting we awarded just under half a million pounds across 11 organisations, each of which will be working with an approved provider. We had many more good applications and decisions were not easy to make. This is the ‘pilot’ round of grants which means we will use it to learn about what’s working for grantees, and how we can improve our processes. In that spirit of learning there were a few things that struck me from reviewing the applications that I wanted to share and reflect on.

My first observation was immediately obvious, and that is just how tough it is in the social sector at the moment. The organisations who applied for grants were a good cross-section of the sector: some charities, some social enterprises, geographically dispersed, large and small, covering a range of social issues. They were all relatively well managed and successful organisations. What they had in common was a difficult financial situation. Many of them had seen sharp drops in income, or were expecting such a drop imminently. Several had decided to use reserves to cope with these changed circumstances, and some looked on the verge of financial viability. There was little sign that financial misfortune had much to do with performance, with some of the worst affected having strong track-records. Most had successfully diversified income and grown trading operations, but this was rarely adequate to compensate for losses in government funding. Be in no doubt that it is very challenging running a social sector organisation right now.

My second observation is that some organisations are setting too high a bar for the outcomes they want to measure. For example, if your organisation provides people with one-day or very short volunteering opportunities, it is unlikely (though not impossible) that you will be able to change their lives fundamentally. It’s not that there’s anything wrong with short-term interventions, it’s just about what’s realistic. Trying to measure long-term difficult outcomes like improved mental health, or employability, can be a distraction if the intervention is relatively fleeting. Even if you were able to meaningfully measure changes over time for the individuals you work with, attribution is likely to be impossible to establish. The principle should be measure what is meaningful to you, and what is proportionate. Pursuing the example, if you provide one-day volunteering experiences then this can be done well or badly, and finding out which is a meaningful task. Focus on asking participants what they thought and if they would recommend it and look at ways of assessing the quality of your delivery. These things actually allow you to manage the service better and so increase the impact you do have.

My final observation is about the lazily adversarial relationship between voluntary organisations and public service commissioners. Charities often feel commissioners ignore them, impose cuts and run crazy procurement processes that disadvantage well-established local organisations. And commissioners see charities that lack understanding, are naïve, and would rather snipe from the side-lines than engage constructively. There is some truth to both these characterisations, but this artificial divide holds us back. In reality commissioners and charities often share objectives, and can achieve much more through working together than they can ploughing a lonely furrow. Because part of the purpose of the Impact for Growth funding is to equip organisations to pursue government contracting opportunities, we felt it was important to have the commissioner perspective on the panel. Our two local authority representatives were informed, realistic and compassionate. They are trying to do a difficult job with ever declining resources, but were open to constructive engagement on how the social sector can help them. Our process was greatly enhanced by their involvement. Yes we should call out poor commissioning practice when we see it, and it is all too common, but we also need to recognise when we have a common cause.

Overall I’d like to reiterate that we were impressed with all the applications we received and appreciate the effort that went into them. These reflections serve as a useful reminder of the complex environment within which charities and social enterprises operate and this is something we will continue to consider as we progress with the programme and work with our funded projects. We will encourage our grantees to share their experiences and reflect on this reality too.