£117.4m to fund the future, says the Funding Commission
December 2010
The Funding Commission has completed its report on the future outlook for voluntary sector funding in a document spanning almost 90 pages
Chaired by Fiona Ellis, former director of the Northern Rock Foundation and interim director of Philanthropy UK, it highlights the following trends as having particular influence on the future funding of civil society organisations (CSOs):
- an ageing population;
- a more diverse population and household structure;
- development of new technology
- climate change; and
- ethical consumerism and social values.
The government actions the report highlighted as likely to affect impact are:
- public sector deficit reduction;
- the Big Society initiative;
- localism;
- reform of public services; and
- transparence and accountability.
A worrying scenario presented by the report is a vastly reduced level of public service provision, with commercial organisations having taken over some of them, imposing significant restrictions on who is entitled to them. This is countered with a more positive one where ‘the present pattern of public services and models for delivery are altered through co-production with service users’ and a new social contract is developed, involving ‘innovative partnerships between the public, commercial and civil society sectors.’
Funding outlook
The decline in sector funding sources does not, according to the report, need to bontinue if action is taken now. Its authors anticipate that:
- individual giving could rise to £20bn by 2020;
- the public service contracts delivered by CSOs can be increased;
- income from other forms of trading and commercial sector support can be increased;
- £10bn more private investment can be attracted through new approaches to capital investment; and
- the sector can be better capitalised and more resilient as a result of such investment.
Making it happen
Four things need to happen to make this possible. The report goes on to set these out in considerable detail.
- CSOs must step up to the mark by increasing their impact developing increased financial capability and making better use of social media and technology. They mest get better at demonstrating their value to commissioners, working more collaboratively with each other and with other sectors and developing more sustainable and effective infrastructure arrangements.
- Funders and commissioners of public services must make the most of their current resources by helping CSOs learn how to increase their impact, their financial capability, and making the most of their own assets, as well as practicing good grantmaking.
- NCVO must work with others in the sector to secure resources for initiatives aimed at increasing individual giving, trading and commercial sector support. The other sector partners include the Institute of Fundraising, the Fundraising Standards Board, ACEVO, Charity Trustee Network and CAF for individual giving. NCVO also identifies the Social Enterprise Coalition (SEC) to promote trading initiatives along with Business in the Community (BITC) as partners to convene a working group to include the CBI, the Institute of Directors and local chambers of commerce and Rotary clubs to look at support from the commercial sector.
- The government must also play its part. The report calls for the government to establish a restructuring fund of £20m per annum for three years to fund one-off support, legal costs and restructuring costs. This is to promote greater collaboration between CSOs. ‘Small or micro light-touch grant programmes’ administered by government agencies with relevant expertise from a range of different communities were also recommended. The other important role of the government was to provide outcome-based funding where service users and the CSOs representing them are involved in specifying user outcomes at the outset of commissioning. As for Big Society Bank (BSB) this needs to play a lead role in attracting new private capital into the sector.
The provisional costings of all the Funding Commission’s recommendations totted up to £117.4m, to be met through a combination of voluntary, commercial and government funding. Annexe 4 of the report provides a detailed breakdown.
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