Granting Success: Lessons from funders and charities

NPC's latest research report provides guidance on how to structure grants so that they have the most impact. Based on interviews, NPC’s own experiences and a literature review, it explores best practice and the impact of funding decisions on charities. It also identifies barriers to giving the most effective grants and explains how to overcome them. Two key findings are reported. Firstly, that grants should be matched to the funding needs they address and secondly, that the way grants are structured can have a significant effect on charities. Well structured grants give charities the ability to attract the best staff, opportunities to plan and innovate, and flexibility, whilst poorly structured grants can create risk and instability. However, foundations often struggle to give large or long-term grants because of concerns about dependency, a lack of capacity to sufficiently assess and monitor charities or because they wish to spread their funding across a number of different areas. A notable recommendation is that unrestricted funding should be the default option for funders, despite the challenges such funding presents to grant-makers in terms of assessing potential recipients and monitoring impacts. While restricted funding is appropriate in some circumstances, charities find unrestricted funding more appealing as a vote of confidence and more valuable in terms of the flexibility it allows.