Shared concerns: lessons from Cause4 Power Hours

In March, Cause4 and Arts Fundraising & Philanthropy released a new Emergency Power Hour initiative, offering free one-hour sessions to organisations in crisis due to Covid-19. These sessions allow charities to talk through their fundraising or governance concerns with an expert consultant, and to receive advice, guidance and support.

The sessions have had significant take up with hundreds of organisations across the UK booking a call. Organisations have fed back that this support has helped them assess the current situation and develop a plan for navigating the next few months.

We’ve also been analysing the themes of these calls in order to learn how we can best support the sector, and we thought that sharing some of these key themes may help charities feel less alone in their concerns.  One of the biggest areas of worry for the sector has been about the future of Trust fundraising.

For many charities in the UK, relationships with Trusts and Foundations provide a core pillar of their business models. Funding from this source makes up around 15% of all annual income for voluntary organisations[1]. Many Trusts have held the same priorities for a long time, leading fundraisers to invest significant time and resource in cultivating these relationships and developing a pipeline of support from Trusts.

What have we learned?

Now the landscape of Trust fundraising is changing, we wanted to share the main themes running through this new environment:

• Reduction in Endowments: the vast majority of grant-making Trusts rely on interest on or growth of an endowment to fund grant making. Given the financial crisis that surrounds the health crisis, and volatility in the market, these endowments are vulnerable to significant reduction, reducing the funds available for grant-making into the future. Trustees at major Foundations are having to trade off short term spending to support with the Covid-19 recovery[2], and allowing time for markets to recover to facilitate larger future grant making. To mitigate against this uncertainty, charities should consider building the possibility of reduced funds and increased competition into fundraising strategies, thinking about diversifying income streams in the longer term.
   
• Changes to Funding Timelines: due to the trade-off above, and other factors such as the closure of offices and the inability for many projects to be delivered, some grant-making Trusts have completely closed funds for the foreseeable future[3]. In contrast, others have brought forward grant-making to invest now in a charity sector that is struggling[4]. These timeline changes affect planned pipelines and fundraising strategies for charities, who now need to consider planning for different situations and reviewing internal timescales for future projects.
   
• Changes in Priorities: the nature of the Covid-19 crisis and its impact on health, wellbeing and vulnerable groups has meant that many funders have realigned priorities to address immediate needs[5]. This has a significant impact on charities in sectors such as arts and culture, where funds being re-prioritised to meet urgent needs are leaving organisations that cannot currently deliver their services vulnerable. With Trusts focussing on helping charities that can make a real difference in the current context, being able to articulate the value and impact of your work will increase success now and in the future.
   
• Flexibility: grant making Trusts have also responded to Covid-19 with unprecedented flexibility, with many allowing existing recipients to ignore restrictions and use funds where they are most needed[6]. They have also been more transparent and open to conversations in this time. This new, more flexible approach to funding has been largely welcomed by the sector, but it remains to be seen whether this approach will last. Charities should take advantage of this increased flexibility and communication from Trusts and Foundations, working with funders to find a solution that works for both parties and supports beneficiaries.

Try and talk to Trust funders as much as you can about your situation and future plans […]. So far in this crisis, our largest grant-makers have been incredibly responsive to the needs of the sector and are really are on your side.

For an area of fundraising that has long been steady and more predictable, this uncertainty can be hard to adjust to.

Here, our Founder and Chief Executive Michelle Wright gives her advice regarding Trust fundraising:

“My advice would be to try and talk to Trust funders as much as you can about your situation and future plans, we have a window of openness that is unprecedented and that may not last through the Autumn. So far in this crisis, our largest grant-makers have been incredibly responsive to the needs of the sector and are really are on your side, so try to communicate with those you have an existing relationship with.  

The key is going to be to revise the fundraising Case for Support to demonstrate how your organisation is going to support people and communities as the world starts to recover (or learns to live with Covid). It is likely that Trusts will be looking for those organisations that have been most responsive during the pandemic, that have remodelled their business strategies effectively for resilience and that can best support their communities to get back on their feet. Now, more than ever, we need to present the strongest possible case for support. The competition for scarcer trust resources will be more acute than ever for several years to come.”

Cause4’s free Power Hour scheme is ongoing. To book a Power Hour for your organisation, click here.

How are changes to Trust fundraising affecting your charity? Start a conversation that matters on Twitter at @OfficialCause4.