Is your funding bad for you?

The National Library of Wales was recently accused of putting its reputation at risk after accepting a donation of £300,000 bequeathed by a known Nazi collaborator. This elicited the usual wide spectrum of responses in the sector, from “how could they?” to “jammy buggers” and everything in between.

But it has highlighted the challenges that can exist in attracting funds from sources that may not be wholly appropriate to your organisation, and balancing that with the need to get (especially unrestricted) funds in.

At Directory of Social Change we faced a similar dilemma a few years ago. An item about grants in a Board meeting sparked a discussion about who we might, or might not accept funding from. It was a bit odd really, not least because at the time it was entirely hypothetical, but going through the process of crossing off the various people/organisations/sectors we wouldn’t accept money from was quite good fun. That is, until we realised that for most of the sources we felt we would decline a donation from, there were also strong arguments to accept under the right conditions, particularly if we felt that by working with them we could improve their practices.

We questioned whether it was any different to accept money directly from such companies, or from a grant-making trust whose income came from investments in them, before puzzling over the next logical progression that government’s activities are, in certain areas, far more dubious. If we wouldn’t accept money from an arms manufacturer, how could we accept statutory funding from the government that is their biggest customer?

And so the members of the executive were charged with producing organisational guidelines on where we might or might not accept funding from.

After much more discussion, wailing, and gnashing of teeth, we hit a wall. We’d come up with a list of criteria, think for a moment, and find an exception. Or we’d find another circumstance which would make all of the preceding criteria redundant. The best we could conclude was that we’d judge each situation on its merits – valid in its way, but not especially useful in ensuring a consistent approach, or, more importantly, one that could be applied by any of the potential staff members that could be involved in producing a funding application.

So we stopped. We looked at exactly why we were doing this, made some jokes about “because the board told us to”, and decided it was about our principles. What organisationally was right for us, and what felt comfortable in relation to our vision, mission and strategic objectives. And we identified these three key principles that we felt should underpin all of our fundraising activities;

1.  We will always seek to be self-financing
2. We will always deliver to our agenda
3. We will only seek funding that supports our independence

That felt right in terms of our organisational approach and was relevant to all of the supporting discussions; however it wasn’t going to be enough to guide anyone through a process of identifying or securing funding. So, having abandoned the idea of a rigid checklist, we instead agreed a list of 10 questions that we would ask of every single offer of funding we received.

1. Has the work for which funding is required been tested against organisational vision mission and objectives?

2. Is there any other realistic means of supporting the work with existing resources (including reserves)?

3. Would resourcing work through partnership critically limit our independence?

4. Does an exit strategy exist?

5. What impact do the activities of funder (in the broadest sense) have on our ability to meet our vision mission and objectives?

6. How would engagement support our mission (outside of project objectives)?

7.  Is this how we’d do it if it was our money?

8.  What are the mechanisms for adapting the funded/agreed work in response to changes in need?

9. Are financial efficiencies/underspend able to be retained?

10. Are there elements of the funding (and monitoring) process that we would consider and/or present as good practice (would we recommend it)?

This approach gave us the consistent approach we were after, as well as providing the practical tools to assess any funding opportunity. But it also gave us the flexibility to assess each case on its merits. There are not necessarily any right or wrong answers, and it could be possible that a negative response to one could be mitigated by other factors. However, the overall picture given by the answers to those 10 questions has so far been more than enough to determine the appropriateness of any potential funding. 

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