Reina Edmiston is an Elischer Foundation mentee, and trusts and statutory fundraising manager at WithYou. Here, she explains why core funding matters and shares tips to help your charity secure it.
What is core funding?
Core funding is financial support that covers a charity’s essential organisational and administrative costs. This includes things like salaries of non-project staff, rent, equipment and utilities.
Why core funding matters
Back in 2009, Tony Elischer co-authored a chapter in a book about fundraising in an unpredictable market. Some of his key advice around unrestricted funding (which can often be used for ‘core funding’) remains as true today as it did back then:
“Make sure that you understand your unrestricted income needs. It is often the case that committed giving and unrestricted income go hand in hand, but not always. Unrestricted income is crucial for the stability of the organisation, for paying your overheads and often for enabling you to accept major grants which do not cover their overheads.
“Unrestricted income gives you flexibility, fuels investment, and enables you to be fleet of foot. Ultimately unrestricted income allows you to maintain your organisation, even if you have to reduce your direct expenditure for a period of time.
“Make sure your fundraising is generating sufficient net unrestricted income for your survival. If necessary, accept less income. For example, a donor who would give you £200,000 earmarked might give you only £100,000 unrestricted income, but this could be more valuable for your organisation at this time.
“Seek dialogues with donors to explain the importance of unrestricted income, especially in difficult times. Where major donors are still giving, they may be more sympathetic to a request for a percentage of unrestricted income built into what would otherwise be a restricted grant.”
The challenge of securing core funding
Core funding is the type of funding that keeps a lot of grant fundraisers up at night. This may have been an exaggerated statement two or three years ago, but as costs continue to rise, for a lot of small charities this statement becomes truer each day.
The pressure to secure funding to keep the lights on and pay for the admin time is mounting in the third sector. But it’s important to remember you’re not alone in this challenge.
If I was to distil the challenge around securing unrestricted funding into one key theme it would be trust. Trust from grantmakers that you are best placed to spend funding on what will deliver the best support to your clients. Trust that unrestricted funding will help your charity grow sustainably. Trust that you will spend funding in a way that aligns with the aims of the grantmaker’s strategy.
Trust isn’t created overnight. Thinking about it from a grantmaker’s perspective, who receives many applications every day, we need to ask ourselves: “What are we doing to build that trust?”.
As someone in recovery from alcoholism, I am a fundraiser with lived experience. And part of my journey of recovery means that every single time my wee brain wants to overcomplicate things, there’s now fortunately a wee voice in my head that says: “Keep it simple, be honest.” This is something I think we can all lean on.
I’d highly recommend reading IVAR’s 2021 report on why and how foundations give unrestricted funding. The report details the perspectives from some of the UK’s leading trusts and foundations around unrestricted and core funding. I could probably write all day about this report, but I wouldn’t do it justice, so just give it a read instead.
How to appeal to grantmakers
So how do you access core funding? First off, I’d recommend spending time making sure your organisation is as transparent as possible in what you do. That includes clearly showing how you deliver on your organisation’s aims, articulating why this approach best supports your clients’ needs, and showing why you’re best placed to deliver your mission.
It also means covering the practical aspects of transparency, like giving easy access to your organisation’s safeguarding policies and your annual accounts (for example, on your website).
Next, I’d recommend you have a clear idea of what you’d do with unrestricted funding and how it would support your charity’s aims. If unrestricted funding would go on administration time that’s grand, but think about how that admin time contributes to your organisation’s strategy.
For example, spending money on an administrative post allows our client-facing workers to spend 100% of their time on the role they’re employed to do, instead of each pitching in on admin tasks. This means our organisation can run more efficiently and better support our clients in line with our organisation’s aims.
If you have a section on your website dedicated to fundraising, you could include a section on how you’d spend an unrestricted grant to give easy access for any potential grantmakers.
Completing these steps will allow you to show grantmakers why your organisation can be trusted to spend unrestricted funding in the most effective way. So before approaching any grantmakers, I’d really recommend trying to implement some of these things in your organisation.
Where to find core funding opportunities
Knowing where to go for core funding is tricker.
Yes, there are lists of grantmakers that offer unrestricted funding that you can find via a Google search. For example, the free resources from Charity Excellence Framework or My Funding Central. And it could be that your organisation’s capacity means you’re going to focus on applying to these grantmakers who have open calls for applications.
If this is the approach you’re taking, think about how you can make your organisation visible to any grantmakers you’re looking to approach. Remember: keep it simple, be honest. If they state on their website “give us a call before applying”, then do that.
This is where being clear and transparent makes your life and the grantmaker’s life a lot easier. If you do this, you can clearly articulate to a grantmaker:
why unrestricted funding will benefit your organisation
why they can trust you to spend their funding in the most effective way.
For committed donors – they might be trusts and foundations, corporate partners or major donors – don’t be afraid to open the conversation up to discuss your actual funding needs. It’s often when we open the door to conversations around the importance of core funding that new, deeper and more supportive partnerships can occur.
And when you have a funder that will only support project activity, ensure that you always include a budgeted amount to cover a proportionate amount of the overheads you will need to support the running of that project. Otherwise, it’s actually costing you to run the project.
Modern Grantmaking’s book “A guide for funders who believe better is possible” has some great insights on this. Read a short synopsis and access a CAF podcast episode with the authors.
If you follow these steps, you will be well placed to access more core funding for your organisation, which will ultimately help you deliver on your mission.
About the Elischer Foundation
The Elischer Foundation was established in 2017 by the late Nicky Elischer, in memory of her husband Tony Elischer. The foundation sought to honour the valuable mentoring he provided to fundraising professionals.
Today, the foundation provides mentoring and development opportunities to fundraising leaders all around the world. It supports fundraisers in leadership positions who are committed to elevating the professionalism and impact of our sector, and who are here to make a difference in their charity, for their cause, and in the world.