Richard Gutch Chief Officers Feb 2011

Funding CommissionFUNDING THE FUTURE

A 10-year framework for civil society

Supported by NCVO

Sponsored by Capacitybuilders,

Joseph Rowntree Foundation and

Unity Trust Bank

Background to the Commission

• Set up by NCVO in February 2009• Response to sector’s concerns and

uncertainty about funding• Aim is to set a new funding agenda for the

next 10 years• Report launched on 6 December 2010

Funding Commission members

• Chair: Fiona Ellis, Interim Director, Philanthropy UK and former Director Northern Rock Foundation

• Vice- Chair: Stephen Dunmore, Chair Capacitybuilders and former CEO Big Lottery Fund

• Members comprise: Paul Amadi (Chair IoF), Dawn Austwick (Esme Fairbairn), Michael Brophy (Capital Community Foundation), Dinah Cox (Safer London Foundation), Claire Dove (Chair SEC), Toby Eccles (Social Finance), Brian Horner (Voluntary Norfolk) and John Low (CAF)

Approach The Commission began work in February 2009 and signed off

its report after the October 2010 Spending Review. Its work has included:

• Initial consultation exercise with an on-line questionnaire• A call for evidence and meetings with interested parties• Interviews with over 100 experts in the field• Commissioned papers on key issues of interest• Theme papers on the website• Consultation meetings on draft recommendations.

These provide the evidence base for the report

Context- long term changes

• An ageing population• A more diverse population and household

structure• Development of new technology• Climate change• Ethical consumerism and social values

Context- more immediate changes

• Public finance deficit reduction• The Big Society • Localism• Reform of public services• Transparency and accountability

Recent funding context

• Public sector grants and contracts/fees (£12.8bn)

• Trading on the open market (£8.3bn)• Individual giving (£7.8bn)• These three (=79% of charities income)

accounted for nearly all the £10bn growth from 2000/01 to 2007/08

Current funding context

• Public expenditure cuts• Reduction in trading on open market

between 2006 and 2008• Reduction of 11% in individual giving

between 2007 and 2009• Other income fairly steady so far

Two future scenarios• Pessimistic: public services cut to the bone;

commercial organisations take over; CSOs overstreched and unsustainable: disadvantage increases.

• Optimistic; radical changes to way public services are delivered; co-production with service users; new social contract; increased commercial and voluntary contributions; CSOs have been able to step up to the mark’

Heading for the first, but want to try and create the second. Four things need to happen to bring about the second scenario.

Four areas for action

• CSOs must step up to the mark• Funders and commissioners of public

services must make better use of current resources

• NCVO must work with other infrastructure bodies to increase the sector’s income

• The Government must also play its part.

CSOs must step up to the mark• Increasing impact• Increasing financial capability• Making better use of social media and

technology• Promoting the value of CSOs to

commissioners• More and better collaborative working• Developing sustainable and effective

infrastructure

Funders and commissioners must make better use of

existing resources 1. Increasing Impact Fund: BIG and other

major funders should establish a fund of £5m p.a. for 3 years to help CSOs get better at developing, measuring and reporting on their impact

2. Financial capability programmes: The financial services industry and other funders should sponsor a series of financial literacy programmes (£2.8m over 3 years) for trustees and senior staff, led by the Charity Finance Directors Group

Making better use of existing resources (cont)

3. Investment of trust’ and foundations’ assets: The Association of Charitable Foundations should conduct a survey of its members’ social investment practice and develop guidance

4. Good grant-making: The ACF should also identify good practice in grant-making and promote it.

NCVO must work with other infrastructure bodies to increase the sector’s income

5. The Better Asking campaign: NCVO should work with the Institute of Fundraising and others to secure £10m from the commercial sector for a six year campaign aimed at improving fundraising, especially at the local level.

6. Trading up; NCVO and the Social Enterprise Coalition should secure £1.5m from a range of sources to develop better support for charities and social enterprises involved in trading to increase their access to finance, skills and markets

Increasing the sector’s income (cont.)

7. Mutual benefit with the commercial sector: NCVO, CAF and Business in the Community should secure £700k from the commercial sector for a 5 year programme aimed at expanding brokerage arrangements and developing the relationship between CSOs and SMEs at the local level.

The Government must play its part

8. Restructuring Fund: Government should establish a 3 year fund of £20m p.a. to support one-off costs involved in developing collaborative working; £5m p.a. should be earmarked for rationalising national, regional and local infrastructure

9. Big Society grants: Government should develop a series of small or micro light-touch grant programmes totalling £27m over 5 years, to support community initiatives.

Government (cont)

10. Commissioning for the future: Government should promote a user led approach to commissioning in its forthcoming White Paper, with greater emphasis on trust-based commissioning

11. Attracting new private capital: Government should use the Big Society Bank to develop and underwrite new mechanisms for attracting private investment such as Social Impact Bonds and Social Gilts

Government (cont)

12. Government endorsement: Government should endorse all the Commission’s recommendations and work with NCVO and others in taking them forward.

Costs

• Increasing Impact Fund (£15m)• Big Society grants ( £27m) • Restructuring Fund (£60m)• Better Asking Campaign (£10m)• Other recommendations (£5.4m)

Total: £117.4m

Outcomes

• Increased income for the sector (extra £11.3bn p.a. by 2020)

• Increased social investment in the sector (extra £10bn private investment by 2020)

• Increased efficiency/reduced costs• Wider social impact

Next steps• Full report and summary report, together

with background papers and theme papers, all downloadable from http://www.ncvo-vol.org.uk/fundingcommission

• NCVO will work with relevant infrastructure bodies and Government on implementing the recommendations, including securing the resources to implement them

• Funding to be sought from Government, BIG, commercial sponsorship and trusts and foundations.

Thank you for listening