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6.2 Fundraising

Funding sources

Below is a list of common funding sources for communty projects.

Funding Central

This is a free resource for charities, voluntary organisations and social enterprises. It lists thousands of funding and finance opportunities, plus a wealth of tools and information to support and develop a sustainable income strategy. www.fundingcentral.org.uk

The Big Lottery Fund (BIG)

Responsible for distributing £600 million each year of all the money raised for good causes by the National Lottery. This totals around £6 billion since 2004. www.biglotteryfund.org.uk

The Heritage Lottery Fund (HLF)

Sustains and transforms a wide range of heritage through innovative investment in projects with a lasting impact on people and places. With around £375million a year to invest in new projects and a considerable body of knowledge, they are a leading advocate for the value of heritage to modern life. www.hlf.org.uk

The People’s Postcode Lottery

Offers funding of between £500 and £250,000 for good causes in England, Scotland and Wales. www.postcodetrust.org.uk

Comic Relief

Funds work that aims to achieve at least one of its five themes – better futures, healthier finanes, safer lives, stronger communities, fairer society. http://www.comicrelief.com/our-grants/uk

UKCF

This is the umbrella organisation for all community foundations, providing philanthropic advice to clients and delivering UK-wide grant-making programmes. ukcommunityfoundations.org/

The Landfill Communities Fund (LCF)

enables operators of landfill sites to contribute money to enrolled Environmental Bodies (EBs) to carry out projects that meet environmental objectives contained in the Landfill Tax Regulations. www.entrust.org.uk/home/lcf/funders-directory

Many Housing Associations

Offers funding support to projects that will benefit the environment around properties they manage. https://www.groundwork.org.uk/clarion-uk 

Business In the Community

The largest business-led charity of its kind – is committed to building resilient communities, diverse workplaces and a more sustainable future. www.bitc.org.uk

Locality

Aims to inspire positive change in local neighbourhoods through community enterprise, assets, social action and The Pool, an expert consultancy service. locality.org.uk/our-work/

The Community Shares Unit

Community shares are sold to finance enterprises serving a community purpose. They have been used to finance shops, pubs, community buildings, renewable energy initiatives, and local food schemes, along with other community-based ventures. communityshares.org.uk/

All the major banks

All have charitable foundations that fund local and national charities.
One example is the Lloyds TSB Foundation, which supports organisations that are working to tackle disadvantage across England and Wales. www.lloydstsbfoundations.org.uk

KnowHow NonProfit

This is the place for non-profit people to learn and share what they have learnt with others. Whether you work in a large charity, are setting up your own social enterprise or are helping out your local community group, this site is for you. knowhownonprofit.org/funding

Crowd-funding

A system in which an organisation makes a pitch and, hopefully, people become interested and enthused.  They make a financial pledge but this is only redeemed if the total is achieved.  It probably works best for fairly small (capital) projects – say, up to £25,000. www.spacehive.com

Natural Flood Management 

This fund is available for community projects to help fund natural flood management schemes across England. Projects that aim to reduce flood risk, improve wildlife habitats and biodiversity and support the development of partnership working in communities are invited to apply. Funding can also be used as matchfunding alonside other grant programeshttp://www.catchmentbasedapproach.org/resources/tools-and-casestudies/deliver/nfm 

Tesco's Bags of Help

fund community open space projects up to £4,000. You can find out more about these grants here.

NOTE: This is not an exhaustive list and new sources of funds will be posted in the News section of this site.

Over the past few years, the whole arena of fundraising has become much more developed and sophisticated. There is now extensive literature on the whole subject of fundraising with some countries even having bodies to which professional fundraisers can subscribe. These bodies provide support through networking information and engage in setting standards for good fundraising practice.

This section confines itself to summarising a number of the key points and expands on a number of issues specific to community-led projects. It looks at the types of organisations that provide funding, reviews some of the underlying reasons or motivations behind these bodies and considers some issues in regard to applying for funding.

There are a number of directories to which organisations can subscribe, which specialise in up-to-date registers of funding bodies and organisations, along with their funding criteria. Some of these directories are based on searchable databases, such as Funder Finder, which can be useful in narrowing down a huge range of funding organisations to those that may have an interest in a particular project.

Funding application guidance

Applying to organisations for funding can be a confusing process. You will need to show that you are well managed, that the project has been planned and costed and, perhaps most importantly, that there is a need in your area which your project will provide for.

Even with all these things in place though, application forms can be a headache still. For some useful tips on how to go about this, please click here.

Types of Funding Organisations

Generally speaking, funding bodies can be considered in four categories. These are:

  • Public sector
  • Private sector
  • Non-Governmental Organisations
  • Individuals

Each body has their own pros and cons and it is important to weigh these up when applying for funding. You can find a more in-depth look at these potential sources of funds on the Types of funding organisations page.

General Fundraising Points

Always try to see things from the funding body’s perspective

Funding bodies will only want to support projects that help fulfil their objectives and priorities. Make sure that you understand these and make your approach accordingly, spelling out how your project will help them meet their objectives.

Match funding

Many funding bodies have a policy of not funding all costs, only up to a certain percentage, often 50%. Their logic is usually that if a project is truly worthwhile and enjoys broad support, it should be possible to get the rest of the funding from elsewhere, and by only funding a proportion of costs; their overall funding budget will stretch to cover more projects.

Funding restrictions

Many funding bodies will not fund certain types of cost, or at least prefer not to. There are a number of reasons for this. Sometimes a funding organisation’s legal structure or remit prevents them funding certain costs. Sometimes they feel that restricting what money can be spent on will give a greater focus and improved effectiveness. Common examples of items specifically excluded are ‘administration costs’, ‘organisational overheads’ and ‘contingencies’.

One restriction that many groups run afoul of is that funders will not cover costs that have already been incurred i.e. money you have already spent. Make sure to check if this is the case with your funders so as to avoid disappointment later.

Any prudent manager must anticipate the unexpected and build in a little budgetary leeway. 

Modular approach

It is often sensible to break a large project down into smaller modules and fundraise for these individually. Not only can this approach turn a challenging fundraising target into smaller, more achievable components it can also mean a community group is not overwhelmed by the task. 

The dangers of being funder led

Whilst some compromise will of course be necessary, it is important that your project maintain focus and not stray from its original purpose simply to attract more funding.

Non-monetary contributions

All of the above assumes the contributions made by organisations will be in the form of cash. Some organisations will not provide a financial contribution but instead may offer secondments, consumables or equipment. Whilst contributions are welcomed, non-monetary contributions are not without their problems. For instance, equipment donated must be fit for purpose and any secondment may need management which would require time and resources. Carefully consider what you can accept and what value it will add to the project.


Go to the next section - Cash and cash flow


Useful links

Local authority funding application

Funding application

Fundraising guidance

Funding finder

Fundraising ideas

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