Restricted and Unrestricted Funding

Ask many small charity CEOs what one of their New Year wishes would be – and a significant proportion would answer: “Make sure all our grants are unrestricted.”

Last year research indicated that at 5 selected charities, restricted funding made up 90% of their earned income. This trend seems to be the norm, although there have been some notable exceptions, eg. St John Ambulance where their restricted income was just 3% of their total.

Many of the small charities Minerva works with find that funders’ preference for restricted grants is particularly irksome because it cramps their ability to deliver for their beneficiaries. Owing to the uncertainty of fundraising, most small charities bid for more funds for specific projects than they need, in the belief – often proved correct – that only about one in 4 funders will make a grant. This sometimes leads to more funds being raised for a specific project than are actually needed.

This presents a dilemma: do finance managers simply bank the extra funds ? Or do CEOs write and ask for permission to use the funds elsewhere, with a promise that surplus grants will be returned if the alternative project(s) is/are unacceptable to the funder?

My advice is invariably that CEOs should write and explain the situation; and ought to return surplus funds if the new project(s) does/do not find favour. I am pleased to say that over the last 25 years, my advice has been taken in all but one case.

A preference for restricted funding on the part of grant-making trusts and other funders means that fundraising consultancies like Minerva and in-house fundraising teams must work harder to research suitable funders for specific projects, and need to spend time matching possible funders to the specific projects likely to find favour with their trustees. Apart from the extra cost to small charities, this is in itself no bad thing. Consultants and Directors of Fundraising need to ensure that their fundraising and research skills and those of their teams are honed and updated so that they continue to provide the best results for their charities’ beneficiaries.

Restricted funding is here to stay – so we need to make the most of it!

By Jimmy James|January 3rd, 2020|news|0 Comments

About the Author: Jimmy James

Jimmy James BSocSc has been a Member of the Chartered Institute of Fundraising since 1995, and holds the Chartered Institute of Fundraising’s Diploma in Fundraising (MInstF Dip). In 2004, he became one of the first people in the UK to achieve the Certified Fundraising Executive qualification from CFRE International. He is also a Fellow of the Chartered Management Institute (FCMI). Minerva abides by and endorses the Chartered Institute of Fundraising’s Codes of Practice, and works in partnership with its clients to achieve each charity’s fundraising aims.

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We have always been grateful that we chose Jimmy James as our Fundraiser, his firm but encouraging handling of our Trustees combined with his thorough knowledge of relevant grant making trusts has served us well…in fact he has now been engaged by us again to carry out a Capital Appeal to enable us to own our own centre for autistic children.

Mervyn Terrett, Tracks Autism – Stevenage

You took us on a journey for which……..we had no experience. We owe you a great debt of thanks for your professionalism, skill, patience and, as the results to date show, for your success on behalf of the campaign.

John Emms, Chairman, Skinners’ Almshouse Charity

We asked Minerva Fundraising to undertake a complex funding bid to the Rural Payments Agency for a major capital grant from the EAFRD. This involved Minerva not only leading the funding bid, but also working with other agencies we’d involved in the project.Jimmy brought all the parties involved together and produced the submission, with the result that the funding bid was totally successful. Our capital project has now been completed and provided important new facilities for White Mills Marina.We’d certainly recommend Minerva to any organisation needing to raise major sums.

Debbie Skinner, Director, White Mills Marina

You have done an excellent job and we are very optimistic for the future. Thank you very much for what you have achieved… we could not have managed without you.

Jim Harker OBE, Chairman, Geddington Sports Pavilion

Thank you for all you have done over the last year to support our fundraising for Trinity3.I have appreciated your good communications, open direct approach, your advice and experience.I am sure I will be in touch again at some point.

Andrew Eastham, Chief Executive, Fellowship Afloat Charitable Trust (FACT)

Jimmy James of Minerva Fundraising has a long association with SERVE and its work for older people and adults with disabilities in Northamptonshire and Bedfordshire. Our requirements were very varied – ranging from specific projects and equipment needs to increasing our year-on-year fundraising. In all these areas our partnership with Minerva has been most successful.Minerva continues to meet our needs and has successfully raised funds for projects as diverse as capital building improvements, projects for our elderly and disabled beneficiaries; and key equipment items we need to deliver our services.We will continue to work with Minerva Fundraising with future projects..

Jess Slater, Chief Executive, SERVE – Northamptonshire

Jimmy James of Minerva Fundraising has a long association with SERVE and its work for older people and adults with disabilities in Northamptonshire and Bedfordshire. Our requirements were very varied – ranging from specific projects and equipment needs to increasing our year-on-year fundraising. In all these areas our partnership with Minerva has been most successful.Minerva continued to meet our needs and has successfully raised funds for projects as diverse as capital building improvements, projects for our elderly and disabled beneficiaries; and key equipment items we need to deliver our services.We will continue to work with Minerva Fundraising with future projects.