Together with the National Lottery, charitable trusts and foundations currently distribute over £3 billion annually in the UK. This is a huge funding opportunity that no charity can afford to ignore and one which, if developed effectively, also has a very strong ratio of return. So what is happening in the trusts market and how can charities best exploit it? We spoke to one of our trusts specialists, Cath Errington, about her experience and current advice.
A Long Track Record
Cath began fundraising in 1998, after a degree in modern languages, initially with a broad approach but gradually specialising in trusts and the National Lottery. She holds the Diploma in Fundraising Management from the CIoF and works with a wide range of charities to plan and develop their fundraising, often over longer periods of time. She has been with Wootton George for over ten years, supporting a broad spread of charities across many causes, mainly in the fields of trusts and the National Lottery.
Recent Changes
So what has changed in recent years? Cath is clear that there is now much more competition, driven in part by organisations that have lost statutory funding looking to trusts and the Lottery to fill the gap. At the same time, AI is making it easy for charities to submit larger volumes of bids. This has increased applications across the sector. In response, trusts have been narrowing their criteria to manage the work flow, while some will not respond to new bidders or have closed down altogether. Cath also feels it is harder now to build relationships with trusts as they struggle to cope with the numbers of applicants.
However, it is not all doom and gloom, she says. There are still around 12,000 trusts and foundations in the UK and new ones are registered every year, replacing the ones that close (although many of the new ones take some time to make significant distributions).
Trust Fundraising Skills Needed
Cath is clear about the core skills needed for success: “You need to use your head and your heart. Bids need to be clearly articulated and demonstrate both the need and impact. There is no place for generic bids. They must all be tailored to the funder in question. I use a lot of case studies, including photos, to show the impact of a charity’s work and the funds invested. You also need to convey passion for the work and speak in the authentic voice of the charity, which is where AI falls down, so I never use AI to write bids.”
What other advice does she have for trust fundraisers? “It’s important to be realistic, especially about timescales. Trust fundraising is a medium to long-term game, not a quick fix, so don’t expect instant success. You need a really strong case for support, so it is really worth investing time and effort in getting that right before you make any applications. Then you need to do your research properly, starting with donors that have given before, because they are warm and are more likely to give then cold contacts, so only look for these when you are confident you have exhausted all your past relationships. Always thank trusts and make sure you report back to them properly. Trust fundraising is still a people business, so try to build relationships with administrators and trustees wherever you can. It’s not always easy but will pay off in the long term.”
The Formula for Success
So how does Cath go about working with a new client charity? “I begin by immersing myself in their information and wherever possible by visiting them to speak to service delivery staff. I like to get a feel for the work so I can convey this in the case for support. I collect their reporting information and evidence of impact, as well as understanding their financial position. Then I will build a prosect list and explore what relationships they may already have with funders, if any.”
Cath emphasises that a trusts assignment works best where the client charity is also prepared to put in the effort to make it work. “Trust fundraising is a joint effort, so the more information a charity can provide and the higher its quality, the better the likely outcome. Fundraisers cannot work in a vacuum or raise funds on thin air, so the charity needs to equip the fundraiser to achieve the best results. Then it is important to let the fundraiser get on with the job and trust their advice about what works best. I have seen this approach lead to good results many times. Sometimes I work with a charity to set up their trust fundraising, fill a gap while they recruit or actually run the trusts function over a period of years. It is a very cost effective way to use a consultant.”
AI in Trust Fundraising
So where does she feel AI is heading in this field? “It is having both positive and negative impacts. As we have seen, it is driving up volumes of generic bids – so called AI slop – which is a problem for trusts and is increasing competition. However, there are also some interesting ways that AI is starting to impact this field, for example in research. Fundraisers are now starting to use AI to develop prospects and screen lists, including weeding out non-relevant funders, so there are some potential benefits in terms of time saving and efficiency. However, I don’t think AI will ever fully replace the human factor, either on the applicant or donor side.”
National Lottery Tips
One of Cath’s core areas of work is the National Lottery, where she has secured several major grants in the past year. What does she see happening there? “The National Lottery is increasingly focussed on local communities, so charities need to take that into account in their bids. There is an increasingly strong emphasis too on user involvement and beneficiaries having a real voice in planning and delivering services, and also the voice of the beneficiary within the charity governance. Without putting these in the forefront, an application will not succeed. Try to engage with your regional officer where possible, as they can give advice on timings and fundi8ng available in your area, which can differ. Bear in mind too that it is now taking around 9 months from initial bid to a result, so make sure you plan well ahead. I am also seeing an increasing focus on poverty, children and young people and health outcomes, not just in health projects, so charities should consider those angles in their bids too. Lottery bids are a lot of work and quite a specialist area but the rewards for success are enormous.”
Conclusions
While the trusts and Lottery environment has seen many changes in recent years and competition has certainly increased, it is still a major source of funding for many charities, both for revenue and capital, so cannot be ignored. With the correct approach and a degree of hard work, it is still possible to build a portfolio of funders over time and to develop trusts and the Lottery as a core part of the fundraising strategy.
For Further Information
If you would like to talk about how your charity can develop its income from trusts or the National Lottery, please feel free to contact Ben Ansell on ben@wgconsulting.co.uk or call him for a free chat on 01903 723519