How good governance can help charities win grant funding

  • Charities invest a lot of time and resources into making applications to funders
  • Funders want reassurance that projects will have impact and that charities are well run
  • Experts Andrew Middleton and Frank Bennett explore what charities can do to ensure good governance is a fundamental aspect of their organisation

Grant funding is an important source of income for many charities, but securing funding can be a time-consuming and stressful process.

Non-profit consultant Andrew Middleton, and Frank Bennett co-founder of Digi-Board – which helps charities achieve good governance – share insight into what funders are looking for, and what charities can do to improve their practices.

Recent research by the University of Bath and Brevio revealed that:

  • Charities spend £1.1bn a year applying for grants
  • Grant application forms contain between 21 and 193 questions, requiring an average response of 1,622 words
  • An average charity makes around 22 grant applications a year, spending 18 hours completing each application
  • Funders receive many more applications than they can approve and 63% of applications are rejected

One way that charities can help ensure their application stands out is to include reassurance that it is well run.

Assessing a charity’s capabilities

Increasingly, funders and supporters are looking more closely at the risks connected with the charities they support. They want reassurance that resources they give to a charity are in ‘safe hands’ and will create a positive impact.

Funders specifically want assurances that the charities they support are well governed. They also want to be sure that they protect their own reputation as funders.

Before awarding funds to a charitable cause, a funder has to be sure that money will be spent in the way agreed, and will deliver the impact described in the application. The funder has to make a judgement based on the information received that a charity is capable and competent to deliver this result.

One indication that a charity is well run, is that it conforms to the Charity Governance Code (the Code).

Charities making process changes

For small charities in particular, applying for grants can use up limited staff/trustee time. And while reviewing their governance processes can eat up even more time, most charities no longer consider governance a burden.

Successful charities understand that good governance is at the heart of a well-run organisation. Many are changing their systems and processes to match best practice in the Code – which may include reviewing the way they run meetings, make decisions and manage finances. They understand that their futures depend on following good governance in order to deliver their aims and purposes.

The importance of due diligence

It is the duty of the funder to conduct due diligence, and the information contained within a grant application should help them do this.

Charities that conduct regular governance reviews are better equipped to assist a funder with their due diligence pre-award of a grant, and conform to the Code principles of ‘openness and accountability’.

Governance self-assessment

Skills in governance can be in short supply among trustees. The Code provides guidance to boards on governance best practice and compliance with the law and relevant regulations.

Digi-Board has developed a helpful online self-assessment tool for charities to review their governance. It does not require trustees to have any knowledge of governance or the Code.

The results can provide the board with insight into the strengths and weaknesses of its governance assessed against the Code. It also gives a factual presentation of the charity’s governance practices to share with funders. This supports funders’ questions about due diligence, and demonstrates the charity’s commitment to governance, which is a positive step in building reputation and trust.

NCVO has also produced a tool, the Governance Wheel based on the Code, to measure and develop governance and leadership. It is free to NCVO members.

How to make your grant application stand out

Here are our top tips on how to ensure your grant application stands out from the crowd.

  1. Make sure you meet all the criteria for award of a grant.
  2. Demonstrate the impact you have made to your beneficiaries.
  3. Show regulators that all your reporting requirements are up-to-date.
  4. Respond to questions about governance with factual integrity, using the Charity Governance Code as a benchmark.

With seven out of ten grant applications not winning an award, it may be time to rethink what will elevate your application.

Showcase your governance credentials to help your funder satisfy their due diligence.

About the authors

Andrew Middleton – Governance Consultant

Andrew specialises in non-profit governance and strategy. He regularly mentors charity trustees and CEOs and is a National Assessor for the Queen’s Award for Voluntary Service. He has a passion for systems thinking and designing pragmatic approaches to resolve complex issues facing non-profit organisations.

Frank Bennett – Co-Founder Digi-Board Limited

Frank has experience of serving on charity boards. One thing that always bothered him was the challenge of engaging fellow board members in a discussion about governance. That was the inspiration for Digi-Board.