Proposals That Count: Fundraising And Finance Collaboration

Funders are facing a rising demand for support, making it more crucial than ever to maximise the impact of every funding proposal that your organisation submits.

This blog outlines several practical ways that you may maximise the financial information that you submit to funders. If you have a finance team to work with or work for a small organisation and already wear both the fundraising and finance hats, these ideas may help you think about new ways of structuring your approach to developing the finance aspect of proposals.

First things first: reviewing funder guidelines

Funder guidelines vary in detail significantly. Guidelines set out which costs are allowable and which are not, as well as any specific budget format requirements.

Additionally, guidelines should provide a list of any financial documents which need to be submitted, such as annual accounts, management accounts or cash flow statements for your organisation.

Planning your proposal together

When planning how to approach your proposal, it’s helpful to discuss timelines with everyone who needs to be involved, making sure that roles, responsibilities and deadlines are clear for everyone. Financial elements of proposals often take longer than expected, and, as with many roles, need to be balanced with other day-to-day responsibilities.

Sharing the plan, and taking the time to review progress together regularly, helps keep progress on track and ensures that issues are flagged on time.

Working together on activities and budgets

Planning the budgets for project activities in advance is vital, particularly if you also need to write a financial narrative. For example, when applying for a National Lottery Heritage Fund grant of between £10,000 and £250,000, you’ll not only need to complete a budget, but also a costed project plan, linking anticipated spend directly to the delivery of activities.

Some funders structure their proposal process in stages, and working as a team throughout can help with this approach. For example, the Esmée Fairbairn Foundation will want to know how your organisation is funded at Assessment Call stage, which is an easier task for finance colleagues if they are already familiar with the ambitions outlined within a funding proposal.

Factoring in full cost recovery

Funders have different rules around full cost recovery (securing funding for the total cost of your service, including project costs and indirect overhead costs) and evidence of costs will need to be clearly provided by organisations applying for grants.  For example, project staff time may not be considered an overhead in your organisation, but you may be able to recoup this time from a funder through your full cost recovery budget.

If you can include direct staff costs in your proposal, make sure you’re not double counting them if they’re already factored into your overhead calculation. Conversely, if staff costs aren’t part of your overhead calculation, consider whether you can allocate a percentage of their time in your budget proposal.

As another example, the National Lottery Heritage Fund does not support existing staff positions or overhead costs directly. Instead, it employs a full cost recovery calculator and requires applicants to provide evidence of their calculations as part of the submission.

Match-funding and in-kind funding

Funder requirements around match-funding or in-kind funding are also an area where having finance expertise can be helpful. Involving someone with a thorough understanding of your organisation’s overall financial position can help ensure that any funding proposals are both realistic and clearly articulated.

For example, the Garfield Weston Foundation will provide project funding for around 10-20% of the total funding required, with an expectation that you should already have secured 50% of your funding prior to approaching the Foundation. Alongside this, Garfield Weston also requires a table showing your project’s funding shortfall (expenditure less secured income), and a clear plan outlining your options if the remaining funding cannot be raised.

Compiling this information is considerably more straightforward when fundraising and finance colleagues collaborate from the outset, with a shared understanding of how to address any potential funding shortfalls.

Additionally, funders will always ask about the organisation’s plans to sustain activity post their funding; developing a credible plan and narrative to this end will be valuable.

Beyond the proposal

A clear alignment between programme ambitions and financial planning, instils greater confidence amongst donors and funders to your organisation, reinforcing your credibility and demonstrating your capacity to deliver activities on time and within budget.

Developing activity budgets as a clear part of overall financial planning, as well as developing a clear plan for sustaining activities, will ensure that funding applications have a rigour to them, that will help them stand out in a highly competitive field.