How foundations and charities can work together effectively during the cost of living crisis

The cost of living crisis is affecting every charity, whatever their size, location or cause. Foundations have a vital role to play in supporting charities and have been adapting and increasing their grant-making activity, although the crisis shows little sign of abating. 

 

Last month, ACF held a joint webinar with sector body NCVO focused on how funders and charities can work together effectively during this time of unprecedented financial pressure. 

We asked those attending the event about their views on their funders’ responses to the crisis so far. Almost half (42%) said they were quite encouraged and 3% very encouraged but almost a third (29%) said they were not very encouraged. It’s clear there is further scope for funders and charities to collaborate more effectively. 

As the membership body for UK foundations and grant-makers, we provided an overview of how our 440+ members are responding to the crisis. We also heard from Helen Mathie, director of partnerships and place at London Funders, and Joe Dobson, head of regional funding at the National Lottery Community Fund about their principles and practical tips for grant-makers and grantees working together now and in the coming months. 

Key learnings for foundations and charities from the discussion were:

• Discuss the current impact of the rising cost of living: Foundations want to hear from charities about what their organisations and the communities that they serve need. Where possible, specific evidence on how the rising cost of living has impacted on demand and delivery helps build up a picture of need and how funding can best be directed. 

• Discuss how the cost of living crisis might have an impact in the medium and longer term: Given that soaring prices are likely to persist and have long-lasting repercussions, many foundations are interested in how the cost of living could impact grant-holders and their beneficiaries in the medium and long term. Funders don’t expect a prediction for the next decade but, aided by their independence and longevity, are ideally placed to take a long-term view. Conversations could focus on the “knowns” and “unknowns”, with funders drawing on data and insights to plan longer-term and future support.  

• Don’t be afraid to pick up the phone: There are undeniable power dynamics in the grant-making relationship but many funders are keen to hear directly from those they fund. Foundations should endeavour to be approachable and make it clear that grantees can pick up the phone, whether to ask a question or share ideas and challenges, particularly during this inflationary squeeze. 

• Have an honest conversation about where further help might be needed: As we heard at the event, not all funders are proactively offering additional support in response to the crisis. However, we know many are willing to be flexible and responsive to emerging need and help their grantees withstand growing pressures. An open door policy allows for honest conversations and feedback between foundations and grant-holders about what additional support might be required to mitigate the impact being felt by charities and communities. 

• As foundations, be clear on your funding criteria and share this with charities: Many trusts and foundations set out their funding requirements and criteria on their website. Some have now outlined their approach to the cost of living crisis, including establishing new funding pots and programmes. Foundations should consider being explicit about what position they’re taking and charities can take note, ensuring any new applications align with the funder’s work and priorities. 

ACF will continue to monitor the impact of the cost of living crisis on our members and the charities they support. We will also continue our joint work with other infrastructure bodies to make the case to government on the need for further sector support on energy bills and rising costs. 

Don’t forget to take a look at our dedicated cost of living webpage where we continue to share resources and information to help foundations consider their response.