Tried-and-tested techniques to help raise those all-important core funds.
Last week, after I heard yet another person bemoaning the fact that charities and non-profits dare to spend money on things like admin, salaries and governance, I took to LinkedIn to set the record straight. Now, it's hardly gone viral, but with 1,000 views, 40 'Likes' and seven 'Shares' it's definitely one of my more popular posts. And it got me thinking. Because when it comes to raising core income, it isn't just donors that have doubts - the people asking for it do too. That's why I want to use this post to share a few tips and tricks that will help you break down the barrier and raise more core funds from Trusts.
How? Like all good things, it starts with a story...
Once upon a very long time ago, a funder made a restricted grant.
It was a good amount of money, but still, the charity's reserves were scant.
Fast forward 18 months and the time for reapplication was nigh.
So this fundraiser decided she would give an unrestricted ask a try.
"Good funders, it is but for £100,000 unrestricted pounds I seek."
"£100,000 unrestricted pounds?! Dear girl, the application is far too weak.
Please come back with a more solid core ask, and we will do what
we can to grant you the cash."
More solid it was, well-planned and well-crafted.
The donors really liked the proposal she'd drafted.
The impact was clear, and the activities well defined -
And as for funding core costs, they trusted this charity and really didn't mind.
Because they believed in the work that needed to be done
And so this landmark grant, the first of many, was won.
It might sound like a fairy-tale, but the story it's based on is true. Because if you approach the right donor with the right ask, core funding doesn't have to be an enigma. It's out there, and as a fundraiser, it's your job to find it.
But before we go any further, I just want to clarify a few terms and explain exactly what I mean by the term 'core funding'.
What is core funding?
As fundraisers, you will be well familiar with the concept of restricted and unrestricted funds. For the newbies out there, here's a quick definition:
RESTRICTED FUNDS: Money that is quite literally 'restricted' to a particular project or item.
UNRESTRICTED FUNDS: Money that can be spent on anything and everything you need.
Where does core funding come into all of this? For me, the best way to define core funding is to think about it on a spectrum. If we have unrestricted funds at one end, and restricted at another, core funding is somewhere in between. This money still has ties and restrictions, but they are often looser and used to support the unsexy (but essential) stuff no one likes to fund - things like office rent, staff salaries, training, admin, marketing and fundraising etc.
The challenge is that these costs are often seen as 'separate' from the cause, and that makes them REALLY hard to fundraise for. Don't despair. It is absolutely possible to raise core funds from Trusts, and I want to show you how.
Three ways to raise core funds from Trusts
Now, not every core grant will come in the shape of a £100,000 cheque. As varied as the funders that donate it, when it comes to core funding there are three main income streams you need to consider.
#1 PROGRAMME OVERSIGHT
Donors might not like to admit it, but it costs money to manage a grant. From logistics to evaluation and reporting, that money has got to come from somewhere. A bunch of it (programme staff salaries, for example) is pretty easy to include as part of your general project costs. But what about the costs of your fundraisers, administration support, office and governance? You can't manage a grant without it, and that's why I always recommend adding 'Programme Oversight' to every restricted grant application. A percentage of your overall project costs (10-15% is the norm, but it can be higher) this is the money that will help make sure you can manage and report on that grant like a boss.
You might have to justify it, you might have to trim it, but whenever you have the chance - add it. Imagine an additional 15% on every restricted grant you receive. There's nothing illicit about it. Nothing underhanded. All you're doing is covering your costs. Own them, and that new source of core income will soon start to add up.
#2 CORE GRANTS
There are very few funders who openly advertise core grant funding. But that doesn't mean you can't ask for it. The trick is to create a project that works just like any other restricted ask. It has aims, objectives and activities. The difference* is that the aims and objectives of a core ask are organisational rather than project-based, and the activities that feed into them are core, and the immediate impact a little less obvious. It takes a little creativity and some stella grant writing skills to get around this, but it is absolutely possible - as long as you package your project in the right way, and take it to the right kind of funder.
Here are a few tips to help make those core grant applications fly...
Tip #1. Choose your funders carefully: Trust your instinct. Not every funder will want to cover your core costs. Look at your portfolio. Who do you know that might be open to having the conversation and start loosening those restricted strings?
Tip #2. Work up to it: It takes a lot of trust to give a core grant, so don't dive in straight away. Unless you're responding to a specific call for core funding, I recommend starting with a restricted grant or two. Use the time to build a relationship. And when it feels right, start talking to them about the possibility of submitting a core grant application.
Tip #3. Ask for advice: Not sure if the Trustees will go for it? Don't guess. Ask. If you know the person on the other end of the phone, why not give them a call and ask for some advice on the best way to approach and pitch your core application.
Tip #4. Be flexible: Core funding needs an open mind on both sides. Yes, your donor needs to be thinking forward, but you do too. Remember, core funding isn't the norm (yet). So ask yourself what you can do to make the ask more palatable and reassure your donor.
Tip #5. Create the solution together: Submitting your application is just the first step. Be ready to talk it through, exchange ideas and make adjustments. Work with your donors to create a solution that works for both parties and you'll increase the chance of application success.
*Although when I think about it, it isn't really a 'difference', because every restricted ask should link back to your vision and mission.
#3 LOW-LEVEL FUNDERS
When you work in trust fundraising it can be tempting to spend all your time chasing zeros. My advice? Don't forget about those smaller, low-level funders. It might not seem like a lot of money, but all you need are five unrestricted grants of £2,000 and suddenly you've got £10,000 of core funding to play with. It doesn't need to take a lot of time. Some well-tailored templates and a rolling schedule of 5-10 applications a month is more than enough to get you started. Try it. You'll be surprised by how much traction you get.
The importance of trust
I can't stress this point enough. There are a lot of headlines out there condemning charities for inefficient spending, uber-high admin costs and extortionate CEO salaries, and the chances are your donors have read them. They might not be worth the rags they're written on, but you need to understand the impact these headlines have and the concerns they raise.
Take the time to build relationships and to build trust. The more you get to know your donor, and the more they know you, the easier it will be to try something new.
How to pitch a core ask
We've skirted around the issue, and now I want to face it head-on. You've got the relationship, you've got the funder, but how on earth do you ask for core funding? You can't just pitch office rent or a fundraiser's salary and leave it at that. No. If you want core funding you have to work for it, and that means you need...
A strong, tangible ask
It might be a core application but you still need to be clear about where the money will go.
An absolute link to your vision, mission and business plan
The only way a core ask is going to sound good is if you tie it back to your vision, mission and business plan. It's not just a database, website, staff salaries or training. It's a key part of your plan to achieve X and Y by Z.
A clear, evidence-based need
Every grant application starts with a statement of need, and core funding asks are no different. There's the social need, of course (i.e the reason why you exist). But there's also the business case for investment. Why do you need a database, website, fundraiser or skills training? What is costing you, your service users and mission? If you can't answer this question, your argument will fall short of the mark.
Clear impact and key performance indicators
Remember, when a donor makes a core grant they are investing in YOU as an organisation. That means your reporting has to work on two levels. There are direct deliverables of course, but you also need to report back on the progress your organisation is making as a whole. Stories, case studies, impact data. It all matters. Use your reports to bring your work - and the difference their grant is making - to life.
Passion, conviction and an absolute belief in your ask. Because if you don't think it should be funded, why would they?
And that brings me to my final point...
How do you raise core funds from Trusts?
You go out and get them.
Core funding will not come to you. You need to get creative, give donors options, and try different techniques and approaches until you find a recipe that works.
I know it can feel awkward. But we have got to stop feeling guilty about needing and asking for core costs. They are an essential part of the cause. Own them. Include them, and get ready to ask for them.
After all, the worst someone can say is no.
Love this post? Check out my presentation 'Core funding - are we our own worst enemy' as part of the 2020 Fundraising Everywhere Festival.
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