Cash and long term endowment investment is 'winning funding formula' says CDF

By: 

Cheryl Chapman

Managing Editor, Philanthropy UK

The combination of immediate cash grants and longer term fundraising through endowments can prove a winning formula in providing support to small, voluntary organisations , says a new report from The Community Development Foundation (CDF).

It has published the final evaluation report of Grassroots Grants, a £130m government funded programme that aimed to support the voluntary sector in building stronger, more active communities, which directly funded approximately 19,000 groups over two and a half years (September 2008 – March 2011). Over 7,000 of these voluntary groups had never previously received public funds. 

The report reveals the endowment element attracted new donors, with one fifth donating to local causes through the endowment programme for the first time.  Many donors cited the government match funds as a powerful incentive to donate.  Grassroots Grants endowments have £2.7m available in 2011-12 to distribute to local groups, “demonstrating the programme’s effectiveness at providing long-term sustainable funding” says the CDFA.

 Grassroots Grants had two elements:

• An £80m small grants programme that provided grants of £250 - £5,000 to small, local community and voluntary groups in England with an annual turn-over of £30,000 or less
• A £50m endowment match challenge, where donations raised by local funders were matched by government and invested to provide sustainable grant funding to community and voluntary groups into the future.

 The evaluation shows that the programme met its aims of:

• Increasing immediate grant funding and capacity building to grassroots groups across England.  It increased volunteering (estimated at over 40,000) and benefited around one million people;
• Increasing long term funding available to grassroots groups from community-owned endowments, with a £90m fund created across England; and
• Improving the sustainability and quality of local grant making by strengthening independent funders throughout England.  Local funders who had a dual role of grant giving and endowment raising said it allowed them to demonstrate to philanthropists the tangible results of small grants in local communities.

 Alison Seabrooke, chief executive of the Community Development Foundation said: “The combination of giving immediate grants to grassroots groups, while encouraging long term investment into endowments to create sustainable investment for similar causes in the future is a winner.  Grassroots Grants provided immediate support to those groups which are often off the radar but can have significant impact at a local level.  Seeing the impact of this investment encouraged donors, often for the first time, to invest in local endowments that will continue to fund grassroots groups in the long term.”

Daniel Pearmain, CDF research officer and report author, said: “CDF’s evaluation of the Grassroots Grants programme shows that while relatively small sums of money were given to community and voluntary groups, this had a significant impact.  It supported groups to build capacity and introduce new activities to meet local needs.  The endowment was made attractive to donors both by the match funding and the visible impact of activity on the ground.”

Grassroots Grants was funded by the Office for Civil Society (OCS) and managed by CDF.  To download a free copy of the Grassroots Grants evaluation report, visit: http://www.cdf.org.uk