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“Without taking risks, we won’t see good things happen.”

By Mary Rose Gunn, Founder and CEO of The Fore, and Kate Symondson, Head of Philanthropy at the Symondson Foundation

On 28^th February 2024, The Fore launched the Funders Collective with a breakfast meeting hosted in London. Discussions about being a philanthropist can become mired in the challenges and frustrations, rather than being an open-hearted space for positive reflection and exchange. The Collective therefore launched with a positive statement of intent to be a space to connect with fellow philanthropists, explore best practice and celebrate the people that are driving change.

For the first event, funders and investors came together to hear from Diane Eyre, Co-Founder and Director of the Imagine Foundation. Diane shared her personal experiences in overcoming (and, in some cases, still tackling) misconceptions surrounding modern philanthropy. These, she explained, too often mislead potential donors in how they can really make a difference and prevent existing funders from maximising impact. Diane had three main takeaways for the wider funding community:

1. Supporting small charities is an incredibly effective way to create impact and there are many different options in how to support – your level of impact just depends on your capacity and who you collaborate with;

2. There are systemic barriers that skew the performance of large charities compared to their smaller counterparts; and

3. We should embrace an element of risk when supporting social causes.

You can support small charities too

Diane Eyre, and her husband Steve, have a passion for funding smaller charities, particularly those in earlier stages of development, but this was not always the case for Imagine Foundation (IF). During its earlier days, IF tended to focus on project-specific funding which is a common approach adopted by new philanthropists. However, through fostering relationships with their charity partners, it became clear that core funding is vital to the heartbeat of an organisation and is incredibly difficult for smaller organisations to secure. Since switching to unrestricted, multi-year funding for IF’s partners, Diane has seen seismic successes, and notably that of School of Hard Knocks. This charity began in Liverpool by engaging young men who face inequality through the values and language of rugby to help them on a path to employment. By providing unrestricted funding at School of Hard Knock’s early stages, IF has helped it grow to become a UK-wide organisation, with a robust team and more financial supporters, which now delivers its services to an impressively wide demographic. This is just one example of how funding small can open doors for charities to access far larger funding pots and help them reach a status quo of stability and sustainability.

For Imagine Foundation, active participation in charities’ development was fundamental in forming its grant-making approach which is balanced with the limited time commitments of their Trustees. This has led to IF managing a multi-year-commitment portfolio of 25 charities, with grants awarded generally being between £5k to £10k. The approach exemplifies how granting smaller amounts to smaller organisations lends itself well to building an ecosystem of organisations as part of a funding-plus, relational strategy.

For individuals who are time-poor and prefer a more hands-off approach, Diane understood the inclination to give large sums to large charities. However, she noted that working in partnership with organisations, like The Fore, allows philanthropists to retain decision-making power in backing small charities without taking on the time-consuming responsibility of managing complex grant-making infrastructure.

Acknowledge the barriers facing small charities

Even though charities earning over £500k annual income make up only around 8% of the charity sector, they attract nearly 92% of funding that the overall sector receives. This trend is not abating as highlighted by NCVO’s UK Civil Society Almanac 2023 report. Since 2020/21, larger organisations have received an increasing amount, and share, of the sector’s total income.  

“Small charities see the gaps that people fall through in their local communities.”

It is hard to ignore the many suspicions that still colour some funders’ attitudes towards grassroots organisations, including the all-too familiar contention that “there are too many small charities”. Diane turned this on its head and instead argued that too much money gets directed to larger organisations.  “Being small,” she noted, “should not be a barrier to funding for charities.”  Particularly when they are better able to perceive issues in their communities that often go unnoticed by larger services or public bodies, and have a unique ability to be agile and streamlined in their response.

Don’t run away from risk

The Funders Collective recognised a related issue: smaller, younger charities tend to be perceived as higher risk to funders. A comparison was made between supporting the start-up of an entrepreneur versus that of an impact-led organisation, and we were reminded that without risk, there would be little change and little reward. In Diane’s words, “without taking risks, we won’t see good things happen”, echoing Mary Rose’s sentiments on the three Rs of good philanthropy: research, respect and risk.

“Small charities aren’t all that different from small businesses.”

Just as investors and entrepreneurs are open to risk in investing in the private sector, philanthropists need to be more comfortable with risk-taking, rather than demanding unrealistic levels of certainty when supporting social causes. Funders discussed how meeting with the leaders of charities and social enterprises as part of their due diligence process was an integral part in mitigating concerns about risk and helping a funder to share their vision.

There is an array of limiting beliefs baked into the charitable sector which work against those who are trying to support it. While only able to address a few of these in this instance, the Collective were heartened to be amongst friends keen to bulldoze more of the barriers that smaller charities face and by the potential for real change backing these smaller organisations. Members left mobilised to find out more and follow Diane and Steve Eyre’s impressive example of catalytic philanthropy.

About The Fore

The Fore has over a decade of experience creating catalytic impact through backing exceptional grassroots charities. Whether you’re the cornerstone funder for a charity with an innovative solution to youth violence, or an investor helping regenerate a community by advising on how to secure social investment, we know that when funders find the right opportunities, the ability to create change is extraordinary.

The Funders Collective brings together new and experienced philanthropists who want to learn, be inspired and connect with others grappling with the challenges of creating real impact as funders. The Fore will host a series of quarterly conversational breakfast meetings and events (under Chatham House rules). Topics for discussion in 2024 include an introduction to social investment; intergenerational philanthropy; and encouraging trusteeship in your business.

Since launching in 2017, The Fore has backed over 500 exceptional small charities by providing £9m in funding and 13,000 hours of skills support. With portfolio charities doubling their income over 3 years and 51% of those funded in the pilot are now national, we are keen to share what we have learnt and facilitate conversations around the opportunities for changing systems when funding small charities.

If you would like to know more, please contact The Fore team via [email protected].