We often get asked by charities and social enterprises for advice on how they can raise more unrestricted funding from trusts and foundations.

Many organisations are very successful at securing grant income, yet still find themselves in a tight financial position because the majority of funding tends to be restricted to a specific purpose. While project funding is vital, it rarely gives you the flexibility you need to thrive as a resilient and innovative organisation.

We've compiled some of our best tips on how to achieve the holy grail of unrestricted grant income - from some obvious funders to approach, to how to think outside the box when it comes to improving your financial position through trusts and foundations fundraising.

While it’s understandably tempting for funders to want to fund tangible and exciting projects, this doesn’t give organisations the freedom to pay key staff or cover central costs. Not unlike yoga, strengthening your core is vital and will make you much better at everything else you’re trying to achieve too. 

​There’s a growing recognition in the sector that smaller organisations in particular need access to more flexible funding if they are to survive and thrive, particularly at a time when so much local authority funding has dried up. Lloyds Bank Foundation CEO Paul Streets has been particularly vocal about the damage caused by 'projectitis'.  

Here are a few funders that give core funding to a broad range of charitable causes:

• Lloyds Bank Foundation (no surprise given the above)
• Tudor Trust
• Esmée Fairbairn Foundation 
• Masonic Charitable Foundation
• Paul Hamlyn Foundation

If you’re looking for core funding, here are a few tips:

• Check out the above funders and see if your organisation is eligible to apply.
• Use a funding directory like Funds Online or Funding Central to search for other core funders. We suspect that other funders will pop up over the coming months. These directories have a subscription fee for most organisations but it’s often a worthwhile investment, as they have an option to search specifically for core funding.
• Develop a strong case for support for why you really need core funding. For example: why don’t you have much unrestricted funding already? Why would it be so valuable to you – would it enable you to recruit a key member of staff, respond to a new opportunity or restructure in an important way? What makes your organisation such an expert at what it does, therefore such a strong candidate for core funding?

It's easy to focus on core funding, but what are your specific development needs which mean that project funding isn't suitable? For example, you might be looking to scope out an innovative new idea, invest in a building or specific piece of equipment, or improve your digital capabilities.

For each of these areas, there are specialist funders who can help. For example:

• National Lottery’s Digital Fund and Social Tech Trust provide digital funding
• The Fidelity UK Foundation fund "organisational development and planning initiatives"​
• Garfield Weston Foundation and Clothworkers Foundation provide capital funding

Clearly these types of funding will be a little more restrictive than no-strings core funding. However, being specific about your needs will enable you to make a more convincing case for support and open up a broader range of potential funders, thereby increasing your chances of securing that much-needed investment.

Many funders don’t explicitly provide core funding, but will consider providing unrestricted grants to organisations they know, value and trust. But getting in position to access these opportunities takes time, effort and patience.

You’ll probably need to secure at least one, possibly several project-specific grants from a funder first, then focus on building a relationship with them. It helps to go above and beyond expectations by thanking funders quickly and in a memorable way, then reporting well on the grant you received – either by demonstrating that the project went well, or by reflecting honestly on any challenges or complications experienced.

We recently blogged about the importance of building relationships with individual donors and how many organisations get this wrong. The same principles apply to trusts fundraising. A funder that’s engaged in your work is worth 10-20 funders on a cold prospects list, yet so many organisations prioritise the wrong thing.

Once a funder knows you well, they could support you by inviting you to apply for an invitation-only funding round, proactively supporting you with an urgent fundraising campaign, recommending you to other funders, or even just sending you an unsolicited extra cheque. This happens surprisingly frequently but almost never by accident - you need a strategic focus on building great relationships.

This tip isn’t so much about securing unrestricted funding, but reducing how much you need in the first place. Trusts and foundations fundraising isn’t just about writing applications – with a better approach to project planning and budgeting, you can ensure you have a smaller funding gap to fill.

Create a budget calculator for staff, with fixed rows for venue hire, volunteer expenses, travel etc. This helps people to cost up projects accurately in the first place and avoid budget overspends which then need to be covered by unrestricted funds.

Calculate staffing costs for projects carefully, checking with every funder what you’re allowed to include. Don’t just include the main project staff – if other staff (e.g. your Director) are committing time for line management or evaluation, include a percentage of their time if possible. This ensures your project funding fully covers the true cost of your projects, meaning your unrestricted funds can go on something else.

Include a contribution towards overhead costs in each project budget – this could be a blanket 10% or a more specific calculation, depending on the funder's requirements. Collecting lots of small core contributions in this way is often easier than leaving yourself with a big funding gap to cover with core funding requests.

Trusts and foundations fundraising is not a numbers game, and we don’t recommend the ‘spray and pray’ approach of sending generic funding applications quickly to lots of funders.

That said, if you’ve conducted prospect research to develop a funding pipeline, you might find you build up a collection of potential funders who have very broad funding interests and no specific application form or guidelines, making it difficult to identify a specific project to approach them about.

You could therefore consider putting together a core funding template, broadly explaining your work and impact in 2-4 pages and giving a couple of examples of how a small grant would benefit you. You could then send this to batches of say 10-20 funders at a time. Expect a low success rate (even 5% might be optimistic) but treat this as a shot to nothing with funders whom you wouldn’t otherwise approach.

This is likely to work best for smaller, community-rooted organisations whose work is easy to explain and has emotional impact, and who don’t have high reserves. It’s only worth trying in some circumstances, and the usual recommendations for trusts fundraising still apply – you should try to contact the funder first to check if they can give you any advice on applying, and you should tailor each application to their funding interests and average support level as much as you can.

Buzzwords come and go in fundraising. They get picked up as flavour of the month by fundraisers, charities and funders alike, and fade away just as quickly. Although the words frequently change, the concepts behind them are often more fundamental and enduring.
 
For me, one of the most important buzzwords in trusts fundraising at the moment is co-production. This is also commonly referred to as co-creation or co-design, and linked to ‘ABCD’ (or asset-based community development). Isn’t jargon exciting?

What is co-production and why is it so important?

Co-production has a broader definition in project management circles, however in a charity context it usually refers to the practice of involving your service users, clients or beneficiaries (more fun lingo to choose from) in the development of your services.

Funders value knowing that your projects aren’t planned in a top-down fashion based on what you think people want or need, but are genuinely based on their ideas, aspirations and unmet needs. This isn’t about token consultation exercises, but actively involving the people you support in your project design. For example here’s a guide to co-production in social care, along with some key principles.

This isn’t a new idea, and it’s not really a fundraising concept at all – it’s fundamental to service delivery.

However I’m seeing increasing examples of funders specifically talking about or asking for evidence of co-production. I review draft funding applications on a daily basis, and it's one of the most common areas where I feel that organisations can make improvements. In a competitive funding climate, failing to show evidence of this can give funders an easy excuse to discard your application.

So how can you build co-production into your project planning and tweak your funding applications to better emphasise what you’re doing?

​Don’t underestimate what you do naturally
​
For many organisations that we work with, co-production can feel like a strange thing to focus on. It’s not something they consciously try to do, because it’s second nature already.

If you run a local community centre, for example, your frontline staff will be interacting with your service users on a daily basis, and constantly evolving activities to reflect their ideas and unmet needs.

And this is fine – in fact, it’s often ideal. Co-production doesn’t always mean contrived exercises. But don’t expect a funder to assume you’re doing it, or give you credit for it, unless you tell them.

Spend some time reflecting on how this happens organically in your organisation, then include at least a paragraph about this in your funding applications. For example you could explain how staff and service users typically interact, the questions that your frontline staff like to ask, and your internal processes for factoring people's feedback and ideas into service design.

Demonstrate how you gather structured feedback

Depending on the nature of your work, co-production may not happen quite as organically. And even if it does, it can be useful to gather more structured, formal feedback periodically.

Surveys are excellent for quickly gathering broad feedback. Online surveys usually enable you to reach more people more quickly and analyse data automatically, but only if your service users have online access. You can use focus groups to test specific ideas or explore topics in more detail and gather more in-depth feedback.

Demonstrate your approach to gathering feedback in your funding applications. Cite both your quantitative results (e.g. survey data) and qualitative results (e.g. individual quotes). If a funder asks a specific question about co-production, use the space to explain your approach and rationale in more detail.

If you have the budget, appointing an independent consultant or agency to design the feedback process and/or analyse the results can bring added credibility. We recently designed an independent consultation process for a charity and later helped them to write funding applications, and the independent feedback data has been invaluable in demonstrating the need for their work and the extent to which service users are involved.

Explain how you use feedback and work with people to improve your services

Of course, listening is only one part of the process. And it counts for little if you don’t act on what you’re being told.

Successful projects often have steering groups or committees who meet regularly to review impact data and service user feedback, then take action where needed. Steering groups should include (ideally multiple) representatives who have lived experience of the issue you’re tackling. Organisations that really succeed in embedding co-production in their work - and maximising their impact - often have representatives with lived experience on their Board of Trustees.

Providing evidence of all this should impress funders, however it can still sound a bit theoretical. So go one step further and include some concrete examples of how you’ve co-created services. For example, were your service users instrumental in designing any of your current services, or have you improved or evolved a project in specific response to feedback?

This is especially important if you’re trying to do something unusual or surprising that a funder may not naturally value. Funders often have specific ideas about how work should be delivered, yet also say that co-production is important to them, which can feel contradictory!

And what about if you’re writing a final report for a project which needs further support, where you already know that the funder won't provide simple continuation funding? Would they be more receptive if you demonstrated your learning and proposed a slightly different, co-created project as a follow-up?

Finally, not everything that you tell a funder needs to come from the horse’s mouth. Testimonials and endorsements – from either service users involved in your work, or delivery partners who are impressed with your approach – are great for increasing your credibility in a funder’s eyes.

​One of the first rules of trusts fundraising is that relationships are crucial – but forming them can feel harder than ever.
 
This is the inevitable result of an ultra-competitive climate. With so many funders inundated by interest, they’re taking steps to minimise the number of applications they receive, and the time they spend communicating with applicants.
 
As a result, many fundraisers scratching their heads by the lack of feedback, the requests for no unsolicited applications, and cryptic guidance notes. Sometimes it feels like funders and fundraisers are barely speaking the same language – but with more understanding on both sides, there’d be less wasted time all round.
 
We recently launched a new one-day trusts fundraising course – and, in response to the widespread confusion and frustration out there, we included a ‘What funders say, what they mean and what to do about it’ segment.
 
Having gathered feedback from loads of charities and social enterprises, and compared it to our own experience, we’ve developed a list of five frustrating things that funders say, and what you can do about it:

1. We don’t fund core / running / salary costs
 
The funder’s point of view: personally I think that charities need to invest in being strong, well-run organisations more than ever, despite the media obsession with things like management and admin costs. Sadly, funders are often more drawn to shiny, tangible projects. There are legitimate reasons for this: funders have their own charitable objectives and wish to demonstrate impact for what they give, and projects often feel cleaner, simpler to understand and more likely to produce short-term results.

However, it’s easy to misunderstand what funders mean when they say they don’t fund core or salary costs. Often, they mean they won’t fund these costs as stand-alone items, or don’t want to pay to simply keep people in jobs. It doesn’t necessarily mean they won’t fund core or salary costs as a part of a project, if packaged well. 

How to respond:

• Develop thorough project budgets which include a proportionate contribution towards key staff costs.
• Include a contribution towards overhead costs where possible – if in doubt, check with funders what they allow.
• Identify specialist funders who do fund running and/or salary costs
• Adopt a full cost recovery model where you understand the true cost of your projects and develop funding applications to match – this will prevent you having to ‘dip in’ to core funding to sustain projects. 

2. We only fund new ideas and activities
 
The funder’s point of view: a bit like magpies, funders are often attracted to shiny things – that means new, exciting and innovative projects. This can be infuriating, particularly if you’re seeking funding for a project that you know works and is needed more than ever. It’s often driven by concerns about sustainability – funders don’t want to feel relied upon to keep supporting the same work year on year, or may feel that it’s better value for money to make a smaller contribution to test a pilot project that can then be scaled up.
 
How to respond:

• Take every opportunity to speak to funders before applying – ideally a written application shouldn’t be the first they hear about your project.
• Don’t take your projects for granted – they may not feel new to you, but can you still explain why they’re innovative in your field?
• Show the learning process – have you evolved your approach over time, based on lessons learned and feedback from beneficiaries? Does new research or the political climate make your work more necessary?
• Show how your project can be a catalyst for policy change, or broader work by bigger organisations.

3. We don’t fund work which is a statutory responsibility
 
The funder’s point of view: this is something I find very frustrating, particularly at a time when an increasing number of activities are seemingly being abandoned by statutory services. However, many funders simply don’t want to feel that they’re just picking up the slack for government spending cuts, or don’t recognise how what you’re doing is different – particularly in areas like residential care, housing and employment support.
 
Applying for direct replacement funding is a bit like going on a date and talking about your ex-partner the whole time – if you make a funder feel like you’re only interested in them to replace something you used to have, don’t expect them to feel special and excited about partnering up with you.
 
How to respond:

• Take the time to research and explain why your work is vital in relation to the social context and what your beneficiaries need, rather than just pitching it as the same project that used to be statutory-funded.
• Show how your work is different, better or more innovative than related statutory services.
• Demonstrate social return on investment – does your work actually save e.g. the NHS money?
• Know when to walk away from a funder that simply isn't the right fit – this avoids wasted time all round.

 
4. We don’t accept unsolicited applications
 
The funder’s point of view: in the current climate, many funders are inundated by applications, lots of which are poor quality or don’t meet their priorities. As a result, they choose projects based on personal recommendations or their own research. This helps them to make better use of their limited resources.
 
How to respond:

• Don’t just apply anyway – funders won’t change their mind and won't appreciate you ignoring their guidelines.
• Send a short letter introducing your work, enclosing an annual report or inviting them to visit you – make it clear that you’re starting a conversation, not asking for funding.
• Develop a relationship – do you know anyone who can introduce you? Can you subscribe to their newsletter or connect on social media?
• Ask their advice – have they funded similar projects that you can learn from, or do they know any other funders who might be able to help?

 
5. We don’t enter into discussions about funding in advance or provide feedback
 
The funder’s point of view: again, this is often driven by a lack of resources. Funders prefer to dedicate time to the organisations they’re funding. Also, feedback can be contentious – perhaps they used to provide it, but often got a negative reaction. Finally, they may simply have nothing meaningful to tell you, if they couldn't find any fault with your project but had to make a tough decision between several organisations they liked.
 
How to respond:

• Critique applications yourself in advance – read any guidelines carefully, see how you compare to other similar projects they have funded, and ask someone less familiar with your work to review your work.
• Look to build a relationship with funders in advance, so they’re more likely to help you.
• Phone rather than email – you may get ‘off the record’ feedback, rather than a generic email response.
• Meticulously record any feedback – you won’t get much, but you can gradually build a picture over time.
• Accept that competition is tough and move on – your time may be better spent on the next application.

To learn more about how to build relationships with funders, write compelling applications and develop a successful trusts fundraising programme, click here to check out our training courses.

In a tough financial climate, charities are looking to cast their net more widely for financial support. This can include asking the general public, wealthy individuals and companies.
 
All these routes can deliver good results in the right circumstances, but it’s important to remember that trusts and foundations still offer one unique advantage: unlike everyone else, they exist solely to give away money.
 
The question is: are you doing enough to get it? Even if you think your charity’s best long-term income prospects lie elsewhere, it’s likely that grant funding will provide vital oxygen while you wait for your  corporate, major donor or legacy fundraising to bear fruit.
 
There’s a big difference between securing a few grants and having a truly successful trusts and foundations programme. Focusing on a handful of friendly long-term funders might have a high success rate but it'll yield a limited amount of money. And it leaves you very vulnerable: if one funder decides to stop giving, a key project or even your whole organisation could be at risk.
 
Committing to a strategic, carefully-researched and well-resourced trusts and foundations fundraising programme could be your passport to financial security, even if it involves stepping out of your comfort zone.
 
We think there are five key components to ensure you have in place. If you’re looking to build a trusts and foundations programme from scratch, or make sure that your existing programme delivers great results, here are the five areas to get right:

1. Map out your funding needs
 
What do you need to raise money for anyway? Making a list of all your distinct funding needs will give vital context to your fundraising efforts, and help you to make the most of your limited time.
 
List all your different funding needs – including for project work, capital needs and organisational development. For each funding need, estimate the minimum and ideal amount needed – for instance, £30,000 would allow us to run this project at its current capacity, but £50,000 is what we ideally require to reach everyone in need. This also helps you to demonstrate the impact that successful fundraising could have on your work to your trustees and management.
 
Give each funding need a priority rating (e.g. low, medium or high) – this will help you to focus your efforts in the next stages below.
 
2. Thoroughly research funding prospects
 
There’s a vast amount of useful information about funders in the public domain. Use a database like Trustfunding or Funding Central to help your research – they’re worth the licence fees. Sometimes your local Community Voluntary Service (CVS) can arrange for you to access these databases for free.
 
Create a big old spreadsheet to record key information for each funder – including their name, areas of interest, how and when you must apply, average grant size, and similar charities they’ve supported previously. This will help you to decide which of your funding needs are the best fit for that funder, how much to apply for, and a priority level (e.g. low, medium, high). You should factor in which funders you already have a relationship with, to make use of your staff and trustee networks.
 
This process helps you not only to decide which funders to focus on first, but also to quantify the overall potential of trusts fundraising for your charity. If there are loads of excellent funding prospects out there, you might want to dedicate more short-term time to writing applications.

3. Prepare convincing template applications
 
We strongly recommend that you avoid jumping straight into specific applications, and first spend some time ensuring that you have all the necessary information available to create a convincing ‘case for support’ for each priority funding need.
 
This should include a summary of the issue you’re trying to address, what your solution looks like, how much it costs, how you’ll measure success, and why you’re the best organisation to do it. Gathering relevant research and statistics, data and testimonials from your beneficiaries, and endorsements from independent experts will strengthen your case.
 
Creating strong, reusable content will save you time in the long run, and enable you to respond more quickly to last-minute grant opportunities. It’s also vital to be able to describe your work on your own terms, rather than purely in response to funders’ questions and criteria. This helps you to identify and address any weaknesses or gaps in your projects, ahead of those vital deadlines.
 
4. Submitting those all-important applications
 
If you’ve spent time researching funders and developing template applications, this stage should now be more straightforward.
 
Work through your funding prospects in priority and/or deadline order, adapting your template content to fit each funder’s areas of interest and application criteria. Always read any guidance from the funder, as they often make it very clear what they’re looking for and expect you to follow this advice. Plan carefully for deadlines to make sure you don’t miss them, and always include a well-written and personalised cover letter.
 
For more tips on writing strong applications, check out our ‘Ten trusts & foundations mistakes to avoid’ helpsheet.

5. Don't forget about robust record-keeping
 
Organisation and attention to detail are essential for trusts fundraising – you need to keep track of every application you make, the date you submitted it, what the outcome was, and any feedback from the funder.
 
This will enable you to chase up funding decisions at the right time, make a note of when you can re-apply, and use any feedback received to improve your application next time. It’s also vital that you keep on top of thanking funders and meeting any reporting requirements related to your grant.
 
A good CRM (database) is often well worth the investment in the long run, as it allows you to store and analyse information better. However, there’s no reason why a well-maintained spreadsheet can’t work for smaller charities, at least initially.

This is the first part of a two-part blog by our Director Mike Zywina. Click here to read part two. 

Exacerbated by the huge squeeze on statutory funding, trusts and foundations are more oversubscribed than ever. Sadly that's only likely to increase after Brexit, as funders make less money on their investments - which is often what sustains their annual giving - and charities look elsewhere after becoming cut off from European funding.

The rise of online funder databases and freelance trust fundraisers has made it easier for charities to churn out more applications, but often with a focus on quantity not quality.

Consequently, success rates are on the decline. I've seen several funders openly advertising that they fund less than 5% of the applications they receive. One funder said that by late January, they've often received far more applications than they could ever dream of funding in a whole year.

With so many letters arriving on your desk, just imagine how picky you can be about what makes the cut.

There's no guaranteed method for writing a successful application - and you should probably be suspicious of anyone who tells you there is. However, there are some sure-fire ways of making sure your application gets thrown out at the first stage. Here are my top ten:

1. Taking a punt with a 'circular appeal'

Don't get me wrong, I can see the temptation. We've heard that we might get a 10% success rate from cold applications, and we've already written a decent general appeal. So if we send out 20 more requests for £10,000, that should mean two successes and another £20,000 in the bank. Easy, right?

Except it doesn't work. Most funders hate receiving a 'circular appeal' with nothing personalised beyond the name and address, and they can see them coming a mile off. In this competitive climate, tailoring your application is a must.

You might enjoy a brief sense of anticipation and satisfaction that you've 'covered a lot of ground', but you probably won't bring in any cash. Worse still, you could find yourself blacklisted by a few funders.

Try this instead: Of course, this isn't to say you shouldn't box clever and re-use content where appropriate. Strong template applications are the bedrock of a good trusts and foundations programme.

However, you must take the time to research and understand a funder's interests and priorities, show you've done your research by tailoring what you write, then crown it with a personalised cover letter.

​People often claim trusts fundraising is a numbers game - that's rarely true, and ten high quality applications will do much better than a hundred mediocre ones.

2. Making basic mistakes

Getting the funder's name wrong, mis-spelling a trustee's name, assuming that someone is a 'Mr' when you could have easily checked and found they're a 'Mrs'. The administrator is probably looking for an easy way of quickly reducing their pile of applications, and you've just provided it.

Try this instead: Check all the basic details, check them again, and check a third time to be sure. Ideally, use the funder's website - or a database like Trustfunding - rather than your own database or spreadsheet, in case your records are out of date.  

If you've spent a whole day drafting applications, your eyes have probably lost all ability to spot mistakes. It's a great idea to do any final checks the next day, with a fresh head. You could also create a simple checklist to always run through before pressing print or sealing that envelope.

3. Getting your budget wrong

Catastrophic budget mistakes are surprisingly easy to make, but hard for a funder to forgive.

This can happen when multiple people are involved with working on the figures but don't document their workings, or when you change one figure in a column at the last moment and haven't set the total to auto-calculate. Suddenly your numbers can be way out, which is a big red flag for a funder being asked to trust your charity with thousands of pounds.

Try this instead: Triple check your numbers, because they're arguably even more important than what you write.

​If several people are involved with creating the budget, make sure they leave a 'paper trail' of their workings, and ideally put in formulae rather than just numbers. Create a budget calculator tool in Excel that automatically calculates totals - this may take some time at first, but will make things much easier in the long run.

4. Ignoring the guidelines

Funders often take the time to provide a wealth of useful information in their written guidelines and on their websites, yet too many fundraisers don't use this to their advantage.

Skipping the guidelines is a bit like going on a treasure hunt without reading the clues. You're very likely to waste your time on an application that doesn't make the grade, and you might even damage your future application prospects by frustrating the funder too.

Try this instead: Before starting work on an application, take stock of how much information the funder has published. Some just provide basic guidelines about the length and format of your application. Others have a detailed FAQs page, examples of projects they've previously funded, and even in-depth advice about answering specific questions.

Whether there's a single paragraph of info or a comprehensive website, make sure you read it in full before you start writing. You should also refer back to the guidelines as you proceed, making sure you demonstrate your knowledge and understanding of their criteria as you answer the questions.

5. Missing the all-important deadline

Not all trusts and foundations set specific deadlines - but when they do, they mean them. While a day late may not seem much to you, it makes a bad impression and offers a good reason to throw out your application.

Try this instead: Research deadlines meticulously in advance and work backwards to set key dates and milestones for the different stages of your application: gathering the raw information to go in it, producing a first draft, reviewing with colleagues and getting it signed off. All of these stages take time, especially when colleagues are busy, so build in an extra margin just in case!

Of course, avoiding a last-minute rush is easier said than done. But it's vital if you want to avoid wasting effort on an application that never gets read. You can make things easier for yourself by prioritising your time and skipping applications that you don't have time to do properly, or where there's only a tiny chance of success.