Funding Commission FUNDING THE FUTURE A 10-year framework for civil society Supported by NCVO Sponsored by Joseph Rowntree Foundation and Unity Trust Bank

Background to the Commission Set up by NCVO in February 2009 Response to sector’s concerns and uncertainty about funding Aim is to set a new funding agenda for the next 10 years Report to be launched in December 2010

Funding Commission members Chair: Fiona Ellis, Interim Director, Philanthropy UK and former Director Northern Rock Foundation Vice- Chair: Stephen Dunmore, Chair Capacitybuilders and former CEO Big Lottery Fund Members comprise: Paul Amadi (Chair IoF), Dawn Austwick (Esme Fairbairn), Michael Brophy (Capital Community Foundation), Dinah Cox (Safer London Foundation), Claire Dove (Chair SEC), Toby Eccles (Social Finance), Brian Horner (Voluntary Norfolk) and John Low (CAF)

Commission’s Vision and Aim The Commission’s vision is that by 2020 the funding environment will Maximise opportunities for independent voluntary action; and Enable civil society organisations (CSOs) to further their goals more effectively and sustainably. The Commission’s aim is to set a 10 year agenda of actions to help deliver this vision

Approach The Commission began work in February 2009 and signed off its report after the October 2010 Spending Review. Its work has included: Initial consultation exercise with an on-line questionnaire A call for evidence Initial meetings with interested parties Presentations at Commission meetings Interviews with over 100 experts in the field Commissioned papers on key issues of interest. These provide the evidence base for the report

Theme papers Papers have been published on then following themes on the Commission’s website: Capitalisation and social investment Individual giving Public sector funding Trading

Theme papers cont. Trust and foundations National Lottery Commercial sector support Effectiveness

Consultation In September the Commission held the following consultation meetings: National Charities and Specialist Umbrella Bodies Infrastructure Bodies Equalities Focus Group Norfolk Focus Group Newcastle Focus Group Interested Individuals

Context- long term changes An ageing population A more diverse population and household structure Development of new technology Climate change Ethical consumerism and social values

Context- more immediate changes Public finance deficit reduction The Big Society Localism Reform of public services Transparency and accountability

Recent funding context Public sector grants and contracts/fees (£12.8bn) Trading on the open market (£8.3bn) Individual giving (£7.8bn) These three (=79% of charities income) accounted for nearly all the £10bn growth from 2000/01 to 2007/08

Current funding context Public expenditure cuts Reduction in trading on open market between 2006 and 2008 Reduction of 11% in individual giving between 2007 and 2009 Other income fairly steady so far

Two future scenarios Pessimistic: public services cut to the bone; commercial organisations take over; CSOs overstreched and unsustainable: disadvantage increases. Optimistic; radical changes to way public services are delivered; co-production with service users; new social contract; increased commercial and voluntary contributions; CSOs have been able to step up to the mark Heading for the first, but want to try and create the second. Four things need to happen to bring about the second scenario.

Four areas for action CSOs must step up to the mark Funders and commissioners of public services must make better use of current resources NCVO must work with other infrastructure bodies to increase the sector’s income The Government must also play its part.

CSOs must step up to the mark Increasing impact Increasing financial capability Making better use of social media and technology Promoting the value of CSOs to commissioners More and better collaborative working Developing sustainable and effective infrastructure

Funders and commissioners must make better use of existing resources Recommendations: 1. Increasing Impact fund 2. Financial capability programmes 3. Investment of trust and foundations assets 4. Good grant-making

NCVO must work with other infrastructure bodies to increase the sector’s income Recommendations: 5. The Better Asking campaign 6. Trading up 7. Mutual benefit with the commercial sector

The Government must play its part Recommendations: 8. Restructuring Fund 9. Big Society grants 10. Commissioning for the future 11. Attracting new private capital 12. Government endorsement

Costs Increasing Impact Fund (£15m) Big Society grants ( £27m) Restructuring Fund (£60m) Better Asking Campaign (£10m) Other recommendations (£5.4m) Total: £117.4m

Outcomes Increased income for the sector (extra £11.3bn p.a. by 2020) Increased social investment in the sector (extra £10bn private investment by 2020) Increased efficiency/reduced costs Wider social impact

Next steps Report Launch 6 December Full report and summary report downloadable from NCVO will work with relevant infrastructure bodies and Government on implementing the recommendations, including securing the resources to implement them Funding to be sought from Government, BIG, commercial sponsorship and trusts and foundations.

Implications for NAVCA members Restructuring Fund (Rec. 8) Work with local groups on –Financial capability programmes (Rec. 2) –The Better Asking Campaign (Rec. 5) –Trading up (Rec.6) –Mutual benefit with the commercial sector (Rec. 7)

Restructuring Fund The Fund should continue for three years and comprise £20m p.a. to fund one-off support, legal costs and restructuring costs. £5m of the Fund should be earmarked for rationalising and/or restructuring national, regional and local infrastructure and, where necessary, bringing provision in certain areas up to minimum levels consistent with quality standards. NCVO, NAVCA and other relevant national and regional/sub-regional infrastructure bodies should play a leadership role in helping to reconfigure the present pattern of infrastructure.

Financial capability programmes Funders, including the financial services industry, should recognise the importance of CSOs increasing their financial capability and provide finance to promote this The Charity Finance Directors Group should work with NCVO, NAVCA, ACEVO, Skills – Third Sector and business schools and training providers, to build on, and develop the financial literacy programmes currently available for sector chairs, treasurers, chief executives and directors of finance (or their equivalents).

The Better Asking Campaign NCVO should work with the Institute of Fundraising, the Fundraising Standards Board, ACEVO, Charity Trustee Network and the Charities Aid Foundation to secure funding for a Better Asking Campaign to –Improve the quality and effectiveness of all forms of fundraising especially by smaller and local CSOs –Help develop, support and promote innovative approaches to Asking –Promote the importance of the work of CSOs.

The Better Asking Campaign cont. – Activities –Training initiatives for trustees, CEOs, paid and volunteer fundraisers to enable better asking and better engagement –Developing and supporting collective approaches to fundraising –Supporting the development and sharing of innovative approaches –Helping develop new ways of asking people to give, taking advantage of new mechanisms for giving –Building the capacity of CSOs to engage with social media and technology –Supporting initiatives to improve the way in which CSOs communicate their work –Raising awareness of CSOs through media work around Philanthropy.

Trading up NCVO and the Social Enterprise Coalition should work together to promote better support for charities and social enterprises involved in trading, including initiatives for providing better: –Access to capital –Access to skills –Access to markets –Recognition of social entrepreneurship as a distinct area of expertise

Mutual benefit with the commercial sector NCVO, CAF and Business in the Community should jointly convene a working group of relevant organisations, including the CBI and the Institute of Directors, representatives of local chambers of commerce and Rotary Clubs and some of the specialist intermediaries working in this field, to: –Articulate the business case for increased partnership –Recommend ways of increasing awareness of brokerage services –Promote the opportunities for mutual benefit Particular focus should be given to developing the relationship with SMEs at the local level, working with community foundations and local support and development organisations.

Questions for discussion 1.What are the implications of the Restructuring Fund proposal for LSDOs? 2.What are the implications of the other recommendations for the work of LSDOs with local groups?