Funding Commission Funding the Future A 10-year framework for civil society Supported by Sponsored by Published by NCVO Regent’s Wharf 8 All Saints Street London N1 9RL © NCVO 2010 Registered Charity Number: 225922 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior permission of NCVO. Design by SteersMcGillanEves Design Printed by Short Run Press British Library Cataloguing in Public Data A catalogue record for this book is available from the British Library ISBN: 978-0-7199-1805-6 Funding Commission Funding the Future A 10-year framework for civil society Contents Members of the Funding Commission 2 Increasing effectiveness 16 Foreword i 2.1 Increasing and demonstrating impact 18 Executive Summary ii 2.2 Increasing financial capability 19 2.3 Making better use of social media and technology 20 1 Context 1 2.4 Promoting the value of CSOs to commissioners 21 1.1 The Funding Commission’s remit 2 2.5 More and better collaborative working 22 1.2 Future scenarios 3 2.6 Developing sustainable and effective infrastructure 23 1.3 Current funding patterns 8 1.4 Funding trends and outlook 12 3 Using existing resources 28 3.1 Helping increase impact 30 3.2 Helping increase CSOs’ financial capability 31 3.3 Making the most of funders’ assets 31 3.4 Promoting good grant-making 33 3.5 Other actions 36 3.6 Ensuring all types of CSO benefit 37 4 Increasing income 38 6 Implementation 68 4.1 Increasing individual giving 40 6.1 Lead responsibilities and timeline 69 4.2 Increasing earning through trading 48 6.2 Provisional costings 69 4.3 Increasing commercial sector support 51 6.3 Costs and outcomes 70 4.4 Other actions 54 4.5 Ensuring all types of CSO benefit 55 Annexes 72 Annexe 1 Methodology 74 5 Government’s role 56 Annexe 2 Interviewees and meetings 76 5.1 Investing in collaboration 58 Annexe 3 Lead responsibilities and timeline 80 5.2 Developing the Big Society initiative 59 Annexe 4 Provisional costings 84 5.3 Changing commissioning 60 5.4 Developing a social investment market 62 Notes and references 86 5.5 Supporting the Commission’s recommendations 66 Acknowledgments 88 5.6 Other actions 67 5.7 Ensuring all types of CSO benefit 67 This report can be accessed on the Funding Commission’s website http://www.ncvo-vol.org.uk/fundingcommission where there are also additional annexes (see below for details) which provide further background detail to the report, as well as the various papers listed in Annexe 1. The Executive Summary is also available on the Commission’s website as a separate downloadable document. Website Annexes 1 Data sources 2 Future scenarios 3 Initiatives to promote giving 4 Fundraising – regulation and tax 5 Commercial giving – tax and fiscal incentives Members of the Funding Commission Chair* – Fiona Ellis, Interim Director, Toby Eccles, Development Director, Philanthropy UK, and former Director Social Finance of the Northern Rock Foundation Brian Horner, Chief Executive, Vice-Chair – Stephen Dunmore, Chair Voluntary Norfolk of Capacitybuilders, and former Chief John Low, Chief Executive, Executive, Big Lottery Fund Charities Aid Foundation Paul Amadi, Group Head of Fundraising, Secretary – Richard Gutch, Associate, NSPCC, and Chair of the Institute of Prospectus, and former Chief Executive, Fundraising Futurebuilders England Dawn Austwick, Chief Executive, Head of Secretariat – Belinda Pratten, Esmée Fairbairn Foundation Head of Policy, National Council for Michael Brophy, Chair, The Capital Voluntary Organisations Community Foundation *Rachel Lomax, former Deputy Governor of the Dinah Cox, Chief Executive, Bank of England, chaired the Commission from Safer London Foundation February 2009 until April 2010, when she stood down due to other work commitments. Claire Dove, Chief Executive, Blackburne House, and Chair of the Social Enterprise Coalition Foreword The National Council for Voluntary Having now seen the Government’s NCVO is committed to taking forward the Organisations (NCVO) set up the Funding October 2010 Spending Review proposals, Funding Commission’s recommendations. Commission in February 2009 because it is clear that life for all of us is going to be It is going to be very important that all the of the sector’s concerns about funding. very different from now on. Although the sector’s infrastructure bodies work It was already apparent that the decade of Spending Review does not reveal the full together to deliver the agenda set out in growth, driven in the main by public sector details of what is in store, it is clear that we the report. We cannot build boundaries contracts, but also by increased trading must start planning now for the longer around the interests of trustees, chief and giving, was coming to an end. What term. As Eleanor Roosevelt said, ‘If we wait executives, fundraisers and funders. was less clear was that we were not just until we’re ready, we’ll never get started.’ When it comes to the future funding and facing the prospect of two or three All this makes the timing and the work sustainability of the sector, we must all difficult years; we were about to of the Funding Commission that much work together for the benefit of the sector experience a radical shift in the financial more important. and its beneficiaries. context within which civil society operates. I always envisaged that the Commission I would like to express my thanks to Fiona Faced with the prospect of increasing would help set a funding agenda for the Ellis (chair), Rachel Lomax (past chair), demands for services, but without the sector for the next 10 years. Their report Stephen Dunmore (vice-chair) and the resources to continue to respond in the has exceeded my expectations and other eight commissioners for all their same way as before, we are also witnessing provides a strategic map for the way work. My thanks also go to Richard Gutch an unprecedented number of new ways forward. The Commission has recognised (secretary) and Belinda Pratten (head of of organising our lives and delivering that the new context we are now in secretariat) for their hard work in seeing those services. presents significant opportunities, as well the report through to completion. Finally, as challenges for us all. It has set out the I am grateful to our three sponsors and to None of us quite knows how the future is financial architecture required to ensure all those listed at the back of the report going to turn out, but it is clear that civil a healthy civil society. who have contributed their comments and society organisations, in all their various ideas to the development of this report forms, are going to have a vital role to I am also encouraged by the positive and who have helped with its production. play, both in helping shape this new future response the Commission has had when it and in helping deliver it. It is also clear consulted on its draft recommendations. that sustainable funding is essential to Civil society organisations must now step guarantee the independence of the up to the mark and realise their full sector, which will be more important potential. Funders and commissioners of than ever in the difficult times ahead. public services must ensure they make the best possible use of the resources available to them. NCVO and other sector leaders Sir Stuart Etherington must ensure we exploit the opportunities Chief Executive, NCVO for generating increased income over the December 2010 next 10 years. And Government itself must play its part in providing limited investment where it is most needed. i Executive Summary ii Funding the Future Introduction The Funding Commission was set up by NCVO in February 2009 to respond to the sector’s concerns and uncertainty about funding over the next 10 years and to set a new funding agenda. Our working definition of civil society follows that of the NCVO UK Civil Society Almanac: ‘Civil society is about people acting together, independently of the state or the market, to make a positive difference to their lives and/or the lives of others.’ iii Executive Summary Introduction NCVO estimates there are 900,000 civil Context Future trends society organisations (CSOs) in the UK with The Commission’s work has taken place The Commission believes there are five an income of £157bn. These include at a pivotal time. After what has been developments which will have a particular 600,000 small, unincorporated ‘below the variously described as ‘the nice decade’ influence on our future, including the radar’ organisations and 170,000 charities, and the ‘years of plenty’, we are about to future funding of CSOs: as well as trade unions, universities, witness the biggest cuts in public • An ageing population churches, housing associations and political expenditure and the most radical changes • A more diverse population and parties. The Funding Commission wants to to public services, since the Second World household structure help ensure a better funding environment War. An enhanced role is envisaged for • Development of new technology for all CSOs, but our main focus in this CSOs, while cutbacks in their funding are • Climate change report is on charities, social enterprises and being announced every day. The outlook • Ethical consumerism and social values other voluntary and community groups, for voluntary funding is uncertain, as the including ‘below the radar’ organisations. prospect of increased unemployment and These long-term changes are taking place low economic growth make it difficult to independently of government, although Unless otherwise stated, the statistics predict individual and commercial support. government policies and actions can affect about funding income in the report are Taking a longer term perspective in this the impact they have.