5 Years of Funder Plus: Lessons on how small and local charities can grow and thrive

Lloyds Bank Foundation for England and Wales recently held events in London and Manchester with consultants who support charities the Foundation helps fund. The work the consultants do is part of the Foundation’s Funder Plus programme which provides a range of non-financial, tailored support to help charities thrive.

Consultants across England and Wales shared their experiences over the last five years of what charities need to do in order to develop.

Harriet Stranks, Director of Grants at Lloyds Bank Foundation for England and Wales, reflects on the event below: 


 

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Harriet Stranks, Director of Grants at Lloyds Bank Foundation

The small and local charities we fund are facing increasing pressures because of rising demand and ever-shrinking budgets. At the same time, many of the infrastructure organisations that used to support them – local Councils for Voluntary Services, national sector and membership bodies – have had their own capacity cut, their services merged or even disappeared entirely. That’s why Lloyds Bank Foundation decided in 2014 to offer additional developmental support to charities we fund.

Over the past five years we have delivered capacity-building support to over 800 grantees in partnership with over 100 independent local consultants and providers – piloting and testing new ways of working. But we are always looking to see how we can improve the support we offer to small charities. Over the summer, we brought over sixty of our consultants and suppliers together at events in London and Manchester to look to the future of capacity building.

We shared our collective experiences of the emerging needs and challenges for small and local charities and discussed how the Foundation could respond.  The issues broadly fell into two categories; developing people and keeping up with external changes.

Developing People

Consultants described a significant lack of investment in leadership training. Charities prioritise their budgets to deliver services; training was and still often is seen as either a burdensome legal necessity or as an expensive luxury. Many charity leaders came up through the ranks and are service experts, but there is sometimes a lack of understanding about managing the back-office functions of the charity; marketing, operations, finance and people.

The professional development of small charity leaders is critical as they are intrinsically tied to the success of the organisation. Funders invest in credible and competent people, so it is essential that leaders have the confidence to be decisive as well as the technical skills to deliver. They need space and time to think and plan, and peers and mentors to help them overcome challenges. Emerging leaders also need investment – to develop the ability to delegate well and ensure the charity continues to have energy and vitality.

Programmes for change need to take everyone in the charity, including trustees, with them on a journey of development and learning. Recruitment of skilled trustees is also a huge problem and often charities had boards which needed to be refreshed with new voices. Consultants also observed that many trustees and CEOs were planning for retirement and reiterated the need for investment in emerging leaders. This ensures the charity can make realistic progress, ultimately create cultural change and a longer-term legacy for its work.

Consultants recognised there is a widespread increase in demand for services for people at crisis point and staff across small charities were suffering from stress, affecting their mental health and wellbeing. Lots of charities told us and our Funder Plus consultants about burnout and higher staff sickness rates. This is an enormous challenge for the sector and needs to be recognised. Charities need to start having open conversations with staff about their mental health so they can get the right support.

The biggest need we identified was financial literacy. Leaders and trustees can often struggle to make data-driven decisions. This means that many charities ended up in crisis because they failed to act quickly enough. Charities need to start having conversations about mergers and partnerships much earlier.

Keeping up with external changes

Beyond the ongoing uncertainty around the economy and Brexit, consultants predict the wider operating environment will be volatile for small and local charities.

IMG-20190829-WA0003We heard how charities often don’t understand how to make the most of technology. Many small organisations are not being savvy enough when it comes to exploiting social media and new IT systems. There is a serious skills gap in the sector and it is leading to inertia because charity workers are sticking with bad digital systems rather than switch to a new system. This type of systems transformation takes a lot of time and energy which takes people away from the frontline, therefore it continues to sit on the backburner.

Many charities want a better website and digital channels but often they don’t have a clear enough ‘vision, mission and values’ which means they struggle to clearly articulate the ‘what, why and how’ of what they do. The absence of which leads to wasted resources developing an online presence that fails to cut through.

The charities we and our consultants support found it hard to keep up with the pace of change and keep abreast of legal changes affecting both charity compliance and changes in the welfare system. This affects their ability to support clients with accurate up-to-date information.

Charities frequently find themselves in the uncomfortable position where they are competing with other charities, and more recently, the private sector, while also being pressured to establish partnerships and collaborate on services and contracts. Collaboration can be a force for good, creating better responses to common issues and helping to reduce costs, but forced collaboration causes distrust and fragmentation in the sector.

How will the Foundation respond?

These are all major issues, and not ones the Foundation has the resources to solve alone! By sharing insights from experts in the sector on the major challenges ahead, we can begin to help charities try to overcome these challenges, enhance their skillset and thrive.

Our funder plus programmes will also need to adapt to meet the challenges of the future. At our events in Manchester and London we asked our consultants to make recommendations for how we should respond. Over the next year, the Foundation will continue to review the range of support we offer – in 2020 we’ll particularly focus on digital capabilities like CRM systems and the resilience and wellbeing of leaders and frontline staff.

At the same time, we’re bringing development support closer to the heart of our grantmaking approach. We want to partner with charities with an appetite to grow and improve – alongside every financial investment, we’ll co-produce a development plan to help grantees adapt and thrive for the years ahead.

How I’m using my professional skills to help small charities

We recently sat down with John Coombs, a Bank Manager at Lloyds Banking Group, to learn more about his experiences sharing professional expertise as a Charity Mentor for Alternatives Trust East in London and how his skills have helped out in unexpected ways.


Tell us about Alternatives Trust East

It is a fantastic charity based in Newham, East London, that offers education and support groups for people in the community. The main areas that are supported includes support for parents who have just come to the UK following persecution and mistreatment in their home country, with support groups and counselling for parenting skills. There is also education on appropriate relationships and sex education in schools, and support for pregnancy choices.

I have found that charities welcome support from people with a business or retail background. Just by listening and applying a common sense approach based on experience it is often possible to add considerable value

What first motivated you to become a Charity Mentor?

I have a genuine desire to help the community and make a difference. As a Bank Manager, I feel I have the skills and opportunity to make that difference. When Paul Streets joined Lloyds Bank Foundation, he visited my Branch and I found his vision to be compelling and inspiring, and this encouraged me to become more involved.

How did you first establish the relationship and find focus for your support?

I have been a mentor of various charities over a long period of time and had a relationship that had run it’s natural course, so I asked the Foundation to find me a new charity support in the underprivileged area that I grew up in. I met with the CEO, Julia, to see if we were a good fit and it went from there.

What issues have you helped the charity to address?

The charity normally ask me for help in terms of business and finance, so looking at funds in and out of the business. Also, in maximising social enterprises including a shop, cleaning business and a café. I have also been involved in talks aimed at partnering with smaller charities to help them develop on behalf of the charity.

Have you encountered any challenges? How have you addressed these?

There is normally a challenge in some aspect of the charity as all of those working there are driven to do as much good work as is possible. I try to use my coaching experience to help to frame issues and identify solutions to any issues that arise.

How have you benefited from being a Charity Mentor?

The work helps me put some of my issues into context and gain perspective of what is important. I feel that being in an environment where I have no experience has meant that I have had to rethink how I communicate and coach. I try to help the team by helping to bring their best ideas out.

You’re new a trustee of Alternative Trust East. Tell us about that role.

I am mainly the business and finance specialist in the charity, which can prove challenging as prioritising finance is always key in a charity. I will often find myself in a position of being the ‘voice of reason’ and suggesting a pragmatic approach as many charity leaders are very much driven by purpose and passion. As the CEO of the charity is retiring later in the year, I reviewed all applications for the job , was involved in the selection process and put together an assessment pack for candidates.

Any tips for new Charity Mentors?

You can make a difference! It is easy to think ‘What skills do I have that would help? Would I be able to add anything?’ but I have found that charities welcome support from people with a business or retail background. Just by listening and applying a common sense approach based on experience it is often possible to add considerable value.


If you are an employee of Lloyds Banking Group and want further information about being a Charity Mentor, contact Kay Cameron, Project and Employee Engagement Manager: kcameron@lloydsbankfoundation.org.uk or call 0370 411 1223.

What commissioning looks like from the inside

Lloyds Bank Foundation for England and Wales published its Crisis in Commissioning report in 2016 which found central and local government were using bureaucratic, complex and inappropriate contracting and commissioning processes to secure vital public services. The experiences of small charities taking part in commissioning processes revealed a system in crisis which left charities threatened with closure and the future of public services, including homelessness, domestic abuse and mental health support, at risk.

In an exclusive post, an anonymous former commissioner reveals what commissioning looks like from the inside. Read their blog below: 


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Nothing tells you you’re bad at your job like being disinvited from a speaking engagement by a friend. But that’s the life of a commissioner: you make a lot of mistakes and you make them publicly.

Having been a commissioner, I was struck by the examples of poor practice outlined in Lloyds Bank Foundation’s Commissioning in Crisis report and at how many of these I myself or other commissioners I know have committed. Poor practices listed in the Foundation’s report include:

  1. Unrealistic payment structures
  2. Inaccurate information
  3. Absurd and irrelevant demands
  4. Pushed out by backroom deals
  5. Penalised for quality and success
  6. Funding shortfalls
  7. Unfunded TUPE requirements
  8. Forced mergers
  9. Breakdown in relationship
  10. Inappropriate contract amalgamations and divisions

So why is this failure so endemic? Why is the job so hard?

Culture

Local authorities are complex. Few other organisations can consist of such a range of responsibilities and professions, from town planners to social workers. In such a context, misunderstandings are commonplace, and getting traction for change is difficult and time-intensive. Local authorities face a £5 billion funding gap and the pressure of that – varying authority to authority – can be immense. Commissioners have to create, sell, and steer their ideas through cultures that may not understand them, may not agree with them, and may not be able to afford them. It is very easy to come unstuck.

Complexity

Commissioning is not a linear process and decisions are shaped by other timelines, budgets, and a range of other decision makers, from councillors to service managers, and internal procurement, legal and property teams. No matter how prepared you are, it is easy to overlook things. In my view, this complexity can lead to commissioners making rushed and imperfect decisions. There is a lot of room for error when a process is so complex.

Data and research

Our decisions are only as good as our data, but this can be a blind spot for local authorities.  Many don’t invest enough in research and fail to utilise its full benefits. As a commissioner, you need the skills and foresight to manage multiple datasets and structure and conduct your own qualitative research. Because of the lack of research culture, if timelines are squeezed and resources are tight, research is often the first thing to go out the window.

Skills

Commissioning requires a range of skills – research, advocacy, financial analysis, collaboration. Almost inevitably, commissioners can be under-skilled for the task. As a profession it has far less training than you may think – and many of my colleagues were forced to learn through making mistakes. That’s when people can get defensive and deflective – if they’re out of their depth and they know it. What makes this deeply troublesome is that commissioners are making decisions on multi-million pound spend.

Commissioning has always been a tough job and it’s become harder. Yet I believe commissioners can be powerful advocates for social change. I’ve seen colleagues do incredible work to reimagine services, empower providers, reduce waste so spend can be better used. I’ve seen colleagues work tirelessly to improve the lives of people facing disadvantage. With the right support and funding, commissioners are an important, valuable and progressive force who can help enact change and make a difference.

‘Being a mentor is hugely rewarding,’ writes Lloyds Banking Group relationship director for National Mentoring Day

Dave Moore, Lloyds Banking Group Relationship Director for SME Banking (Leeds) and charity mentor, writes about the value of mentoring, why he does it and how it can benefit small and local charities for National Mentoring Day. Read his blog below: 


 

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Mentoring – really? How could this possibly help me and my charity?

That’s a fair question. Before I became a mentor specifically supporting charities, I had already undertaken training to develop my mentoring skills to support entrepreneurs here in West Yorkshire.

The entrepreneurs were often starting a fledgling business with terrific ideas and enthusiasm but with limited budgets to spend on much-needed guidance and commercial expertise. Nonetheless, they had a huge thirst and hunger for knowledge that could help take them to the next step on their business ladder to success.

Having spent some 40 years in the financial world learning how to support business owners to grow and develop their people and systems, I have found mentoring to be a very natural extension of what is my normal working day.

So how did I get involved in mentoring charities? I was asked by Lloyds Bank Foundation for England and Wales if I would be interested in mentoring a small number of charities that were awarded grant funding. Lloyds Bank Foundation provides much-needed grants to support small and local charities and believed that the experience of our Lloyds Bank Managers could also be vital in helping charities maximise the value of the grants awarded. Charities indicate to the Lloyds Bank Foundation that they would be interested in exploring how a mentor may be able to support their senior team (often the charity’s director). It’s then up to us to see how we can help these charities grow and thrive.

I remember my first introduction to a Leeds-based charity supporting victims of domestic abuse. I met with their director and was amazed and delighted to see many of the challenges the charity faced were so similar to those I saw and heard about every day in the small and medium-sized enterprise and business world I worked in.

At the beginning I met with the charity’s director face to face every month, discussing many topics including the effectiveness of the board (or more accurately the need for the board to be even more effective) and often matters that had a financial aspect. For example, should the charity invest in a particular project or how should the charity adapt to the changing economic backdrop.

As a mentor, we’re not a coach but rather someone that can provide an unbiased view based on their experience to help guide and be a critical friend at times. We listen, support, challenge, suggest and introduce the charity to a wider network when appropriate. By doing this, I believe we can help shorten the time a charity takes to make critical decisions while potentially gaining a broader perspective to help with their decision-making process.

In summary, an introduction to a Lloyds Bank Foundation mentor can lead to a life-long confidante for the organisation’s director and, in my case, a permanent Trustee! Being a mentor is hugely rewarding, challenging in a good way and very occasionally frustrating. But most of all, I feel as though I am giving something back to the local community and making a difference to fantastic causes at the same time. It’s definitely a win for all parties.

Paul Streets: Charity leaders must take care of their mental health

The double jeopardy of rising demand for services and falling budgets means the pressures can be long-term and chronic, writes Paul Streets, chief executive of Lloyds Bank Foundation for England & Wales.

Staff Photo - Paul Streets

Much has been written recently about how to cope with the acute demands of a crisis and its toll on our health and wellbeing. But as the useful Charity Comms advice says, the greater impact comes from the long-term pressure faced by charity leaders across the sector.

Although the guide is catered to comms in a digitally connected world, these long-term pressures are faced by professionals across the sector. This is perhaps particularly relevant for leaders of small charities, where the pressures seem chronic and relentless, as we know from our analysis of the hundreds of reports we receive. Many face the double jeopardy of rising and more complex demands and falling budgets.

I hear this every time I speak to charity leaders enrolled in the School for Social Entrepreneurs programme. Each year, we offer 40 charity leaders a place on an eight-day programme focused on leadership, governance and sustainability. Each year I speak about leadership to the cohort of charity leaders and hear about their own struggles and frustrations. Many of the same problems keep propping up, from isolation to funding.

For small charities in particular, the enduring worry of whether they can balance the books as they wait to see whether the current grant, funding or contract bid has been successful. Often the news arrives so near the end of the last funding that staff are placed “at risk” to give the required notice, which is distressing for those on the receiving and the “giving” end.

Many talk about the agony, pressure and sheer guilt that come from knowing that the demand at their door far exceeds their organisational capacity. Invariably it means they try to do more, working longer hours for less. I find myself sagely advising that they should say no, which is of course easy to say in the comfort of a group of peers, but harder to say when faced with real people.

And yet it’s true of all of us in the sector. None of us can meet that demand. That’s why all of us should consider the balance between time spent delivering and time spent trying to use that experience to advocate for others to act with us.

It’s little wonder then that we have had a growing need for support around health and wellbeing at work at the Lloyds Bank Foundation. This demand was highlighted recently by Mind with its excellent material on better health at work, fantastically segmented by sector, managerial or operational level, size of organisation and whether home, office or remotely based. Here is the section for office based chief executives of charities with 10-50 staff.

Alongside this we have just entered into a partnership with Bird, which focuses on building resilience in charities. As well as its coaching and training, it offers tips on when to spot the warning signs of pressures at work.

Some are self-explanatory: stockpiling; numbing; bouncing; “I’m fine”. But the one that most intrigued me was “chandeliering”. I gather it refers to “hitting the roof” at what seems to be the slightest thing, whereas in reality it’s often a result of systematically burying any negative feelings or stress to try to maintain control.

So if any of you are experiencing these symptoms and find yourself swinging from the chandeliers, help and advice is at hand to get you down.

Be good to yourself and those around you.

Ask A Grant Manager – October 2019

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David Vincent – Grant Manager for the South East

David Vincent is our Grant Manager for the South East. He joined us in May 2019 after working in the grantmaking world for a good number of years. Before joining Lloyds Bank Foundation, he was Grants Manager with a local Trust in Islington and has previously worked with BBC Children in Need and with Tearfund.

“It’s such a privilege to be able to work with and get to know the charities the Foundation funds and supports. In my role at the Foundation, I’m continually motivated and inspired by the people I meet who are doing incredible things, often in difficult circumstances. I really enjoy working with charities to help them to develop and improve their practice and maximise their impact.”

In his spare time, David is also a trustee of a children’s charity in East London.


How does a grant manager determine that an applicant agency meets “It is holistic in nature and based upon a person-centred approach. The individual will have been assessed and their needs identified, with a plan of support put in place”.

In our current strategy Reaching Further, we’ve set out to support charities working to address at least one of the 11 complex social issues we fund. Someone experiencing a complex social issue will most likely have a wide range of needs beyond that which they are presenting with which, if not addressed, may undermine any progress made in another aspect of their life. To make a real positive difference in the life of that individual we believe you need to consider them as a ‘whole’. This might typically start by building a relationship and an understanding of their circumstances and then working together with them to help to address their needs.

We appreciate that any single charity or service can’t be expected to provide a one-stop-shop covering all possible client/service user needs, but we will look for evidence that they are working intensively with service users on an individual basis and not just offering generic activities. Where a client has a particular need, which is beyond the expertise of the charity to provide, then we expect them to be able to demonstrate good links with other relevant services and referral partners.

My colleague Ella previously gave a great example of how all this might look in practice:

“For example, a homelessness charity might see that a service user also mentions relationship, debt, mental health and dependency problems. We’d be looking to see how the charity helps to address these issues, with a planned, progressive approach with their own services, and through their referral pathways to other agencies, rather than just helping the person into short- or long-term accommodation.”

Assessing the sort of grant applications we receive has been described as more of an ‘art than a science’, and there can sometimes be fine margins between a successful and unsuccessful application. However, as someone fairly new to the Foundation, I am really impressed with the diligence of the Grant Managers and the depth of scrutiny of eligible applications.

After reviewing the application we will usually visit the charity to, amongst other things, determine the extent to which they are providing a holistic service to their client group – as described above. The assessing Grant Manager will then have their report looked at, along with the full application, by a colleague to sense-check their conclusions. If this is then taken to our panel it will be reviewed by all Grant Managers or, in the case of the Invest applications, representatives from our Board of Trustees, the Senior Management Team, and a couple of external experts from small charities.

Members of the panel then have the opportunity to ask questions and clarify points in the application. Finally, all members of the panel score the application and our final decision is made based on these scores. This process helps us to benchmark across applicants providing a consistency and quality to our grant decision-making and ensure as fair a process as we can.

 

Why doesn’t the foundation fund the good work of CIC’s and other not for profit and social enterprises please?

We only provide grants to registered charities and Charitable Incorporated Organisations (CIO’s) and will not currently consider a grant request from a Community Interest Company (CIC). We do however allow CICs to make a joint application with charities, as long as the charity is the lead partner.

The reason for this is to do with the robustness of their respective regulatory requirements. CICs are regulated by the CIC regulator with what is intended as a ‘light-touch’. This compares with the more robust regulation of charities by the Charity Commission, which forms a key part of our due diligence process.

Our Trustees will review this position periodically but, for the time being, this remains our policy.


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The NHS won’t achieve the mental health revolution without the support of small charities

Claire Murdoch, NHS National Director for Mental Health, shares her vision for the future of mental health – a future in which the NHS and local partners work hand in hand to ensure people with mental health issues get the best care possible, as close to home as possible.

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Over 35 years I have had the privilege of working with so many impressive people and organisations dedicating their time and energy to making a difference to the lives of people with mental health issues. I have seen how small charities have been fighting against stigma, loneliness and lack of resources for decades. Today, I am so proud of the mental health revolution we are conducting together throughout England – a revolution that wouldn’t have happened without the support of our partners working tirelessly on the ground. On World Mental Health Day, I want to pay tribute to their dedication and thank them for their continued support.

It is an exciting time for our sector: the NHS Long Term Plan has committed a new ringfenced local investment fund worth at least £2.3 billion a year in real terms by 2023/24 to ensure that the NHS provides high quality, evidence-based mental health services to an additional two million people. We have been working in close partnership with stakeholders all over the country to decide what this extra money should be used for – and where it could make the most difference.

Last year we called on our partners for recommendations, and received contributions from more than 150 organisations, representing the voices of over 27,000 people. I was really impressed by the engagement of the sector, which supported us in developing ambitious plans for mental health. We published these plans over the summer and are now already working hard to make them a reality.

I often say that the NHS won’t achieve the mental health revolution by itself; we can’t deliver our plans without the support of the voluntary, community and social enterprise (VCSE) sector. We need to reinforce the links between charities and our services at the local level to achieve our ambitious objectives.

One of these objectives is to transform community mental health in the next five years. After decades of under-investment and increased pressures on our services, we want to ensure that people with moderate to severe mental health issues get the best care possible, as close to home as possible. We recently announced new funding to pilot integrated models of care with GP surgeries, mental health services and local partners working together to give personalised mental health care and advice to people who most need it.

In addition, funding has also been made available to all local health systems in the country to increase provision of non-medical, community-based alternatives to A&E and hospital for those experiencing mental health crisis. These services are often provided in partnership with the voluntary sector and help to ensure we can meet local need in an effective and timely manner.

I encourage local mental health and wellbeing charities to take part in these programmes to support the much-needed transformation of mental health outlined in the Long Term Plan.

I look forward to meeting representatives of small charities at Lloyds Bank Foundation on Friday 11 October, and to discussing our plans for the next five years. I am interested in hearing new ideas on how we can better coordinate our efforts with the VSCE sector to deliver meaningful change for people with mental health issues all over the country. I am also keen to understand how smaller charities can be supported to do more. Often run by local communities, they are one of the best ways to help challenge stigma and inequalities.