The Big Lottery Fund has prepared this paper to inform the Committee’s inquiry into the funding of voluntary sector organisations in Wales. The report responds to each of the points set out in the Terms of Reference of the Committee’s enquiry and is preceded by a summary of our recommendations. It is based on the experience gained by BIG and its predecessors over 12 years of supporting the third sector in contributing to the development and revitalisation of communities in Wales. It also draws on an extensive body of evaluation findings and commissioned research into effective funding.
The Welsh Assembly Government’s current policies and funding initiatives in support of the voluntary sector are overly complex, occasionally lacking clarity. It is recommended that Voluntary Sector Scheme: Strategic Action Plan should set out a clear overarching policy for funding the third sector. There should be an audit of current funding programmes to rationalise initiatives and standardise the funding arrangements, in line with the Code of Practice for funding the third sector.
The unique value of the third sector lies in its ability to marshal voluntary action for the benefit of communities and society and to pilot new ways of addressing problems. Much of this work cannot be easily supported though contracts and social enterprise. The Welsh Assembly Government should maintain and develop its support for the sector’s core functions through grant aid.
The current policy environment presents opportunities for the third sector in facilitating citizen engagement and delivering citizen centred public services. The sector’s ability to undertake these roles is underdeveloped. It is recommended that the Welsh Assembly Government supports a programme to pilot innovative methods of community engagement. The Voluntary Sector Capacity Building Fund should be based on a combination of loans and grant aid.
The arrangements for agreeing policy directions between the Welsh Assembly Government and BIG provide a good balance between public accountability and the flexibility to respond to community needs. It is commended as a model for other non-departmental bodies.
BIG’s outcomes approach to funding provides a robust basis for assessment and active management of projects. It includes a range of flexible models for delivering grant aid, combined with effective support measures for applicants. Recent legislation has enabled us to deliver funding programmes for other organisations and we would welcome the opportunity to discuss how our expertise can contribute to Welsh Assembly Government’s proposals for improving funding arrangements for the third sector.
There is a need for a cohesive response from all funders of the third sector to streamline and simplify their programmes and procedures. As part of our remit to promote good practice in grant funding, we would welcome the opportunity to discuss how this might be achieved with the Welsh Assembly Government and other third sector funders.
The Big Lottery Fund (BIG) is responsible for distributing half the money for good causes from the National Lottery and supports projects in the fields of health, education, environment and the community. We distribute approximately £50 million each year in Wales. Our programmes reflect Welsh strategic priorities and have been developed in consultation with stakeholders in the voluntary and public sectors. Furthermore BIG has undertaken to direct 60-70% of its funding towards the third sector. Currently 77% of grants made by BIG in Wales are invested in the third sector. In recognition of the need for cross-sector funding to address the challenges faced by communities, we also support projects led by the public and private sectors.
All our programmes are based on the outcomes that will be achieved for the people and communities that they are intended to benefit. We expect all applicants to:
The National Lottery Act 2006 confers new powers that enable BIG to deliver funding from non-lottery sources. This provides an opportunity to co-ordinate our funding with others and apply our extensive experience to benefit new areas of activity. For example we have been designated as the organisation to deliver the Dormant Accounts Fund.
Each of the Terms of Reference of the Committee’s inquiry are addressed below
The Welsh Assembly Government’s document The Third Dimension: A Strategic Action Plan for the Voluntary Sector Scheme recognised the need for greater clarity in its policy toward the third sector and identifies three key roles that define its strategy for engaging with the sector.
As a significant funder of the third sector we are acutely aware of the difficulties caused by the lack of a coherent policy for funding the sector. Welsh Assembly Government Departments still have their own grant programmes, each with its own legislative basis, objectives, criteria and monitoring arrangements. BIG has identified over 30 grant programmes operated by the Welsh Assembly Government that may be relevant to the third sector. Not only is this wasteful of Assembly resources, but it makes it difficult for third sector organisations to know which programmes are most appropriate for their projects and to comply with the diverse requirements of different departments.
It is equally confusing for other funders of the third sector, as there is no overview of the funding available for the sector. It is not always clear what exactly the Welsh Assembly Government is funding the sector to do. This makes it difficult to identify where we can usefully contribute to the pattern of support for the sector without breaching the principles of additionality.
For example, The Welsh Assembly Government and Wales Council for Voluntary Action have a partnership agreement on the development of the generic infrastructure for the third sector. This is delivered through WCVA, the county voluntary councils and the volunteer bureau. It is supported by a service specification setting out the basic level of provision expected locally and nationally. Our discussions with the third sector indicate that the annual funding from the Welsh Assembly Government is insufficient to deliver the agreed level of service in every part of the country. There is a discrepancy between the Welsh Assembly Government’s aspiration and what can be achieved with the available funding.
As a result, we have received applications under our People and Places programme to make up the shortfall. It is often unclear what part of the service the Welsh Assembly Government has supported, as this varies across the country. There doesn’t appear to be a benchmark of provision that BIG can assess against.
If the Strategic Action Plan is to achieve effective change it is imperative that it sets out a clear overarching policy on funding the third sector that is agreed by Cabinet and driven by senior management at the Welsh Assembly Government. The Welsh Assembly Government should conduct an audit of the current funding programmes, rationalise initiatives where appropriate and standardise the funding arrangements in line with the Code of Practice for funding the third sector.
We would welcome the opportunity to discuss the Welsh Assembly Government’s proposals and how we might complement the Assembly’s support for the third sector.
Our experience demonstrates that the three roles that the Welsh Assembly Government has identified for the third sector have to be considered carefully.
Voluntary action: The promotion of voluntary action to benefit communities represents the great majority of third sector activity. It is the experience gained from this activity that enables the sector to create innovative solutions to society’s problems and inform and influence public policy and services. Much of this activity is supported through voluntary effort, local fundraising and grants. It is essential that the Welsh Assembly Government maintains and develops its support for these important core functions, through grant aid.
Citizen engagement: Our discussions with organisations concerned with promoting participative democracy and citizen engagement have shown that the Government of Wales Act has raised expectations of the role that the third sector can play in representing the interests of communities to inform the development of legislation and the scrutiny of policy. At present the sector does not have the support structures, technical expertise or resources to engage effectively in the complex new legislative arrangements of the National Assembly for Wales. BIG has responded by supporting an application from the Wales Council for Voluntary Action to co-ordinate a national programme that will provide non-governmental organisations with the information, training, specialised advice, and facilitation services they need to fulfil this role. It is imperative that this role is sustained beyond BIG’s investment.
At the local level, Local Service Boards have been given the responsibility for promoting citizen engagement in the design and development of public services. Our discussions with organisations concerned with community participation have shown that grass roots voluntary groups can play a valuable role in this process but they lack the capacity, skills and support to do this effectively. At present WAG’s is making some funding available to support citizen engagement as one aspect of the Making the Connections Fund. We have identified the need for a significant and targeted investment in local pilot projects that will test out innovative methods of community participation, while building up the confidence and skills of local community and self help groups. This is an important area for investment for the Welsh Assembly Government to consider.
Service delivery: For some third sector organisations, delivering public services under contract presents significant opportunities for achieving their objectives. The social enterprise model has the potential to deliver sustainable, citizen centred services, while reinvesting surpluses into local communities. However, it should be emphasised that this option will only be relevant to a fairly small proportion of the sector.
The Third Dimension and Making the Connections both recognise that the ability of the third sector to engage effectively with commissioning bodies to secure and deliver service contracts is underdeveloped. The public sector’s approach to service contracts also tends to disadvantage third sector organisations by being overly prescriptive in its specifications and monitoring. If the sector is to become more involved in service delivery then the public sector needs to adopt a lighter touch approach.
At present there are two modest funding programmes utilising European funding to support the development of social enterprise - the Community Investment Fund operated by WCVA and the Social Enterprise Development Fund operated by the Coalfields Regeneration Trust and its partners. Both are about to end and are restricted to certain geographic areas. Finance Wales also operates the Community Loan Fund to assist community enterprises become established.
BIG has concluded that a significant injection of resources is required in the form of a social enterprise development fund, combining loans for business investment with grant aid to develop enterprise skills and capacity. We recommend that this model is adopted for the proposed Voluntary Sector Capacity Building Fund, and would be happy to provide additional support in the development of this Fund.
BIG is a UK-wide Non -Departmental Public Body that operates in a devolved environment. The Welsh Assembly Government, in consultation with the Department of Culture Media and Sport, issues our policy directions. BIG’s Wales Committee was recruited through open advertisement, with involvement from the Welsh Assembly Government at key stages. The Committee has a high degree of responsibility for setting the strategic direction of BIG's work in Wales.
BIG's current policy directions for 2006-09 were agreed with the Welsh Assembly Government following extensive consultation with stakeholders (Appendix A). They set out the broad themes, outcomes and priorities that we should take into account when developing our portfolio of funding programmes.
We conduct further detailed policy analysis and discussions with stakeholders, including Assembly departments, to develop individual programmes. We openly recruit programme committees, involving external experts, to advise on the programme and decide on awards. BIG’s Chair and Director for Wales meet regularly with Welsh Assembly Government Ministers and Officials to discuss progress, and there is ongoing contact with relevant Assembly departments. A summary of our current funding programmes is given at appendix B.
We believe that these arrangements ensure a clear distinction between the Assembly’s role in establishing the overall policy framework and BIG’s role in delivering effective funding programmes. It provides an appropriate level of democratic accountability, ensuring that our programmes take account of the Assembly’s strategic priorities. At the same time it allows us the flexibility to adapt to the evolving policy context and respond to the needs and aspirations of communities. This is important in gaining the support and active engagement of the organisations that will ultimately deliver the projects and the people who will benefit from them.
An important consideration for BIG is to ensure that we achieve the greatest strategic impact with the funding we have available. There is a significant risk that in trying to respond to a wide range of issues and demands, funders attempt to achieve too much with limited funds. This can result in funding programmes that have too many objectives or that are disaggregated into numerous small streams. Funding is spread too thinly to be effective and the original strategic objective becomes diluted.
For example there are a number of small to medium size grant programmes funded through the Welsh Assembly Government aimed at promoting voluntary action and building community capacity in different settings. Some of these are delivered by external organisations. They include:
There is a place for small funding programmes offering easily accessible small grants to community organisations. BIG’s Awards for All Wales Programme plays a valuable role in helping small groups to build their confidence, while improving their local community.
However, large-scale community development requires a coherent strategy supported by clearly targeted resources. It cannot be achieved through a disparate set of small funding programmes each tackling a different aspect. The strategy should be based on robust research and analysis, as well as consultation with stakeholders, leading to clear strategic objectives to meet identified need. The grant-making arrangements should have well defined aims, outcomes and priorities that are realistic and achievable with the available funding. Wherever possible they should provide a simple, co-ordinated channel for meeting the developmental needs of the third sector.
Intelligent Funding: In line with contemporary thinking amongst funding organisations, BIG has adopted what has become known as 'Intelligent Funding’ principles to guide its work. We aim to:
We recognise that although our funding is relatively modest compared to that of the Welsh Assembly Government, we provide an important resource for the third sector that enables it to pursue its innovative and campaigning activities independently.
Outcomes focussed funding : One of our clearest expressions of Intelligent Funding is the outcomes approach that we have implemented across all our programmes. This approach concentrates on the outcomes we want our funding to achieve rather than the activities or services that will be provided. We ask applicants to describe what will be different for the people and communities that their projects are meant to serve rather than what they will do.
This helps us to establish clear terms of engagement with the applicant from the outset and underpins the application and assessment process. It also forms the basis of the contract with the grant recipient against which we monitor progress and evaluate performance.
In monitoring projects we focus on whether they are achieving their outcomes rather than the details of compliance. We will work with grant recipients to review and adapt projects in the light of experience. Where necessary we will take action with projects that are failing to deliver to get them back on track.
We actively encourage, and in many cases require, applicants to evaluate their projects to determine whether they achieved their outcomes. The findings inform our overall evaluation to assess the effectiveness and impact of the programme.
We recognise that the concept of outcomes funding can be challenging for some organisations to understand at first. We have published guidance for applicants explaining the outcomes approach.
We believe that the outcomes approach provides a robust basis for assessment and active management of projects. Combined with appropriate support measures, it can help to improve the project development and management skills of organisations. In the long term it yields benefits through better-designed projects that deliver results and enhances the capacity of applicants.
Funding models: BIG supports a wide range of activities and initiatives from open small grant programmes to major strategic investments. We have developed a set of delivery models designed to provide different types of funding to meet different situations. The models include generic application forms, guidance materials, assessment and management tools and the supporting IT systems that can be adapted to the requirements of different programmes.
At one end we have open competitive grants programmes, with broad outcomes and objectives, intended to support projects that respond to the needs of local communities or promote innovation. At the other we have highly strategic programmes, designed to meet specific policy objectives, they have closely prescribed outcomes and priorities and may be delivered through arrangements with third party organisations.
The Third Dimension document refers to the need for key funders of the third sector to work together on outcomes funding methods in line with the partnership approach advocated in Beyond Boundaries. We would be happy to respond by sharing information on our programme development and delivery processes and the range of funding models we utilise and their impact.
Expert partners: BIG works with a number of expert partners to help deliver its programmes. We have engaged external consultants to provide development and support services to help applicants plan, and in some cases deliver and evaluate their projects. This is an effective way of helping less experienced organisations to build up their skills and confidence to access funding.
We also utilise the expertise and networking potential of external stakeholders to achieve strategic objectives. For example, under our Healthy Families - Child’s Play programme we have contracted with Play Wales to work with the play sector to create a coherent infrastructure for play across the country and identify strategically important play projects. Under the Healthy Families - Way of Life programme the objective is to identify joined up methods of promoting healthy eating and physical activity amongst children. We have engaged Hall Aitken to develop three pilot models, support local organisations to deliver projects based on them and evaluate the results.
BIG has an integrated equalities scheme that mainstreams equalities issues through our programme development and delivery procedures. All our programmes undergo an equalities appraisal that includes gender issues. Rather than set specific budgets to address matters such as gender, we ensure that programmes are open and accessible to organisations working with communities where there are equalities issues. Where necessary we will conduct outreach work to encourage applications from under represented communities. In addition, for some programmes we target specific disadvantaged groups that face particular challenges in accessing activities and services.
Multiple funding sources: The difficulties caused by multiple funding programmes cannot be entirely placed on the Welsh Assembly Government. Other funders in the public, private and charitable sectors contribute to the plethora of funding programmes that the third sector has to negotiate. Each programme has its particular application criteria, timescales and grant management requirements, which make it difficult for third sector organisations to co-ordinate applications to different sources.
Alongside the Welsh Assembly Government’s Strategic Action Plan, there is a need for a cohesive response from all funders of the third sector that will:
This proposal should not be seen as a means of limiting choice, but one that will streamline current arrangements, improve customer services and make it easier for organisations to access funding from different sources.
The Wales Funders Forum was a previous attempt at co-ordinating the efforts of funders of the third sector, which had limited success. It is essential that any future initiative should have the full commitment of the participating organisations to focus on the needs of customers and to effect real change in the way their funding is targeted and delivered. It requires clear leadership and resources to deliver significant benefits for the third sector. As part of our remit to promote good practice in grant funding, we would welcome the opportunity to discuss how this might be achieved with the Welsh Assembly Government and other third sector funders.
Sustainable funding: We have already mentioned the need to support the core activities that underpin voluntary action through grant aid. There are no simple solutions to the problems of long-term voluntary sector sustainability. Realistically, contracting for services and social enterprise are potential solutions for a relatively small proportion of organisations. Most voluntary activity does not lend itself to this type of market environment. If society values the innovative and campaigning role of the third sector and the enormous voluntary resource that it commands, then it has to support its infrastructure and core activities, largely through grant aid.
As a Lottery distributor, BIG is not in a position to provide long-term core funding for third sector organisations. However we can support developmental and innovative activity that others find too risky to support or that currently sits outside their strategic framework. BIG has made significant efforts to respond to the third sector’s need for more flexible and longer term funding by introducing specific measures into our programmes, namely:
Big Lottery Fund
December 2007
Themes
| The promotion of community learning | The promotion of community safety and cohesion | The promotion of physical and mental well being |
|---|---|---|
Outcome 1People of all ages equipped with the skills and learning to meet the challenges of a modern society. |
Outcome 2People working together for stronger communities, social justice, and better rural and urban environments. |
Outcome 3Healthier and more physically active people and communities. |
Priorities1. Tackling the barriers to community learning & effective life skills 2. Enabling children & young people to achieve their full potential |
Priorities3. Empowering communities to develop and deliver local revitalisation programmes 4. Developing constructive community responses to disaffection, anti-social behaviour and crime 5. Enabling older people to live independent lives and to contribute to their community 6. Enabling communities to manage and enhance their local environment and amenities |
Priorities7. Developing people’s ability to take responsibility for their own health and well-being in line with the principles underlying Health Challenge Wales, encouraging individuals and organisations to improve health in Wales 8. Promoting healthier eating and increasing physical activity across all age, gender and social groups 9. Developing new approaches to promoting mental health and well being |
These are small grants for local community groups across Wales, supported by the Big Lottery Fund and the Heritage Lottery Fund. Awards between £500 and £5000 are available for community, education, health, environment and heritage projects. Schools are eligible to apply under this programme.
Applications take 3 months to process - groups should allow 3months before they will hear the result of their application.
In Wales the aim of the programme is to help young people:
The Young People’s Fund has £13.2 million to distribute between 2005 and 2008. For this period the programme will focus on young people between 10 and 19 years old. Bridging the Gap and Reaching Out are now closed to further applications.
Closing date: 31 January 2008
Minimum Grant: £500
Maximum Grant: £5,000
Total available: £1 million
The aim of the programme is to support young people with good ideas for activities or projects to take a leading role in developing projects to improving the lives of young people or their communities.
Applicants should allow 3months for applications to be processed.
Launch date: 30 November 2005
Closing date: 2009
Minimum Grant: £5001
Maximum Grant: £ 1,000,000
People and Places aims to bring people together to make their communities stronger and to improve their rural and urban environments. It will support local and regional projects and projects that work throughout Wales. People and Places can fund projects that achieve one or more of the following programme outcomes:
This programme will be open to the community, voluntary and public sector. Money will be available for capital and revenue projects and can be used for the development of communities of place or communities of interest in Wales.
Through the Healthy Families initiative BIG seeks to add value to existing policy by making a strategic link between children’s play, nutrition and physical activity and create a joined up approach to promoting active and healthy lifestyles among children and families. This is a strategic initiative that aims to make a long-term impact in this field of activity.
The beneficiaries of this programme will be children between the ages of 0-12. Priority will be given to initiatives that benefit 8-12 year olds where there is a particular need for play projects.
The programme has two strands - Way of Life and Child’s Play.
Launch date: June 2007
Closing date: 16th November 2007
Minimum Grant: £250,000
Maximum Grant: £500,000
Total available: £7million
The Way of Life programme will promote healthy and active lifestyles among children in family settings.
The aims of the Way of Life pogramme are:
Applicants are able to apply for grants between for up to 3 years, primarily for revenue costs.
Hall Aitken has been awarded the contract to support the delivery of the programme. They have developed a number of models to try out new approaches in promoting healthy eating and fitness with families. The models will form the basis for a series of pilot projects delivered locally across Wales. Some of the models will utilise the health benefits offered through children’s play. Each project will be expected to conduct its own evaluation and the results will be used to inform future policy and practice in this area.
Hall Aitken will work with applicants to prepare their applications for funding and will continue to support the projects during delivery, advise on evaluation and collate the final results.
Launch date: October 2006
Closing date for applications: Round one closed 4th May 2007. Round two closed 6th March 2009
Minimum Grant: £250,000
Maximum Grant: £1 million
Total available: £13 million
The Child’s Play programme will support the implementation of the Welsh Assembly Government’s Play Strategy by supporting the development of the infrastructure for children’s play and strategically important play projects.
The Child’s Play programme aims to:
Applicants are able to apply for grants lasting up to 4 years. Funding is available for both capital and revenue expenditure.
The Big Lottery Fund has appointed Play Wales to help deliver the Child’s Play programme. Play Wales work with the statutory and voluntary sectors to develop applications for both infrastructure development grants and play project grants.
Open for applications: 28 June 2006
Closed for applications: 29 September 2006
Minimum grant: £250,000
Maximum grant: £1 million
Total available: £15 million
Stepping Stones will provide funding to:
Stepping Stones will support local and regional projects or ones that work throughout Wales. We will fund projects that take a strategic and innovative approach to achieve three or more of the programme outcomes:
Projects can be funded for between three and five years.
This was a two-stage application process. Only projects successful at Stage One were invited to move on and apply to Stage Two.
Open for applications: February 2007.
Closed for applications: 28th September 2007
Minimum grant: £250,000
Maximum grant: £1 million
Total available: £15 million
The Mental Health Matters programme aims to:
The programme outcomes are:
Funding is primarily for revenue costs and grants are available for up to 5 years.
Open for applications: 12 November 2007
Application closing date: 18 January 2008
Minimum grant: £1,000
Maximum grant: £10,000
Total available: £5 million
The Breathing Places programme is a UK wide small grants programme developed in partnership with the BBC. It complements the BBC’s Breathing Places campaign by giving funding for small groups. In phase 1 and 2 of the programme around £5 million was distributed for projects that improved the local environment or created new breathing places.
The aim of phase 3 of the programme is to:
We want the programme to bring about the following changes:
A breathing place is a green space that benefits wildlife and the local community. It may be local woodland, roadsides, parks, local nature reserves or wildlife areas, ponds, green corridors and wildflower meadows.
Open for applications: 29 October 2007
Application closing date: 30 March 2009
Total available: up to £25 million
The aim of the Research programme is to influence local and national policy and practice by funding the Third Sector to produce and disseminate evidence based knowledge. In the longer term the programme, through producing sound evidence, will aim to help develop better services and interventions for beneficiaries.
Integral to meeting the aim of the programme will be the following five outcomes:
1. Improved understanding of issues relating to the Big Lottery Fund’s UK themes and country outcomes
2. Improved Third Sector participation and knowledge in developing, doing and using research
3. Improved dissemination of Third Sector led research
4. Increased participation of beneficiaries and users in a range of research roles
5. Improved partnerships between the Third Sector and the research community.
The programme is demand-led. It will fund high quality social and medical research on issues identified, and considered important, by the charitable and voluntary and community sector; and support the use and dissemination of this research activity. Key is that beneficiaries and users are involved, in setting the agenda, conducting, managing and disseminating the research.
Living Landmarks is the Big lottery fund’s transformational grant programme. It will fund a number of large scale projects of national and regional significance across the UK, which will transform, revitalise and regenerate communities.
Living Landmarks has awarded three grants totalling £70 million to projects in Cornwall, Falkirk and Belfast. Under Living Landmarks: People’s Millions four projects have been short listed for an award of up to £50 million. These were presented in a series of television programmes during the week of the 3rd December. The winner will be decided by public vote, and the winner is due to be announced on 12th December.
This programme awards grants up to £80,000 for projects that make a difference to local communities. Short listed projects were showcased on local ITV Wales news during the week commencing 27 November and awards were decided by public vote. Five awards were made in Wales totalling £300, 000.