INCREASING THE FLOW OF CAPITAL FOR GOOD - INVESTING AND GIVING
The Environmental Funders Network’s new report Passionate Collaboration? (available at www.greenfunders.org) represents a first attempt to ‘map’ the demand side of the grants market for environmental philanthropy. As such it complements EFN’s Where the Green Grants Went series of reports that provide detailed analysis of environmental grants from UK foundations.
Passionate Collaboration? is based on survey responses from the chief executives of 140 UK environmental CSOs (civil society organisations). Many of the largest non-profit environmental organisations in the UK took part in the survey, along with smaller more specialist organisations. To our knowledge this is the first time a survey of its kind has been attempted. Foundations within EFN lent their names to the e-mail asking chief executives to take part, and this was important in boosting the response rate.
The report shows that grants from trusts and foundations accounted for 10% of income on average for organisations responding to the survey (compared to 20.6% coming in grants from central government or EU sources). Foundations supported the largest number of CSOs, with 124 of the 139 organisations having received at least one foundation grant in their most recent financial year. There was also a high dependence on foundation grants with 49 of the 139 organisations received 50% or more of their income from this source. In recent years the sector has become more dependent on income from corporate sources, raising important questions about independence and integrity. An analysis of the income of 107 of the organisations over the last five financial years showed a growth in real income each year until 2011/12, when income fell by 5.2%. The fragility of income in the sector was clear, with few organisations having achieved consistent year-on-year income growth, and many reliant on five or fewer sources of income.
Respondents to the survey were asked to describe “the advantages of philanthropic funding, compared to other forms of income for my organisation.” The Word Cloud below provides a visual summary of the results.
Key advantages of philanthropic capital
Chief executives valued the ‘unrestricted’ nature of much philanthropic funding, which gave their organisations flexibility to meet core costs, build capacity, and invest in developing new ideas. ‘Independence’ was also seen as important, allowing organisations to criticise both government and or corporations. Foundation funding was of particular importance for organisations engaged in policy advocacy. Relationships with foundations were also strongly valued by grantees – in addition to money, foundations often provide valuable advice, support and contacts.
The survey also asked chief executives which environmental organisations they felt accomplished the most, given the resources at their disposal. The same question was posed to EFN members in EFN’s annual membership survey. Greenpeace UK topped the list for both foundations and CSOs, with Friends of the Earth and the RSPB tied for second place in the CSO responses. Seven organisations made it into both the top ten CSOs ranked by foundations and the top 25 ranked by their peers, suggesting that foundations and their grantees have a similar understanding of effectiveness. Information on the attributes of effective organisations can be found in the report.
Funders and grantees also agreed on some of the challenges facing the sector, although foundations saw more of a need for CSOs to focus on messaging and communications, and also called on CSOs to step up their engagement with the business sector. Both groups agreed that more effective collaboration between CSOs is needed, although the barriers to this, not least increased competition for dwindling funding, were clearly articulated.
EFN’s hope is that funders will respond to the needs identified by CSOs, including the need for increased skills in relation to finance and economics, leadership and organizational planning, lobbying, and strategic communications. EFN plans to work with both foundations and environmental CSOs in the coming months to look at ways in which foundations can use their resources to increase the sector’s impact. Please contact email@example.com if you would be interested in joining this conversation.