Small Charity Week - The Crucial Role of Core Funding for Small Charities

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The Crucial Role of Core Funding for Small Charities

Core funding is indispensable for small charities, providing the necessary support to cover essential operational costs and enabling them to focus on their mission. Core funding is often overlooked in favour of project-specific funding, core funding is vital for the ongoing stability and effectiveness of small charities.

By adopting strategic approaches and maintaining transparency, small charities can improve their chances of securing this crucial funding. Ultimately, robust core funding is key to the longevity and effectiveness of charitable organisations, allowing them to continue making a positive impact in their communities.

The Importance of Core Funding

Core funding ensures that a charity can maintain its infrastructure and continue operations, even when project-specific funding is uncertain. It supports the foundational aspects of an organisation, allowing it to manage its day-to-day activities and administrative tasks smoothly. For small charities, which often operate with limited resources, this type of funding is particularly critical. It allows them to allocate their energies towards their mission rather than worrying about covering basic expenses.

Furthermore, core funding enhances a charity’s ability to plan for the future. With assured financial support for operational costs, charities can focus on strategic planning, and expanding their services. This stability is crucial for building long-term relationships with beneficiaries, stakeholders, and donors.

The Challenge of Securing Core Funding

Securing core funding remains a significant challenge for many small charities. Rising operational costs have enhanced this issue, making it a primary concern for grant fundraisers. The competition for limited unrestricted funds is fierce, and many charities find themselves struggling to keep the lights on and cover essential administrative costs.

The difficulty in obtaining core funding is often due to funders’ preferences for project-specific grants, which have clear, measurable outcomes. Many funders are reluctant to allocate funds to cover general operating expenses, perceiving it as less impactful. However, without core funding, charities cannot effectively deliver their projects or services.

How to Appeal to Funders

To successfully secure core funding, small charities need to be strategic and transparent. Here are some key steps to appeal to Funders:

  • Transparency: Clearly demonstrate how your organisation delivers on its aims and why your approach best supports your audience’s needs. Provide easy access to your organisation’s safeguarding policies and annual accounts on your website.
  • Clear Purpose for Unrestricted Funds: Articulate a clear plan for how unrestricted funds will support your charity’s aims. Explain how administrative costs contribute to your organisation’s overall strategy. For instance, funding an administrative post can allow client-facing staff to focus entirely on their roles, enhancing efficiency and support for clients.
  • Open Conversations: Engage with donors, including trusts, foundations, corporate partners, and major donors, about your actual funding needs. Honest discussions about the importance of core funding can lead to deeper and more supportive partnerships.
  • Include Overheads in Project Budgets: When applying for project-specific funding, always include a proportionate amount of overheads needed to support the project. This ensures that your organisation is not losing money on delivering the project.

​Finding Core Funding Opportunities

Identifying sources for core funding can be challenging. While lists of are available, it’s essential to tailor your approach based on your organisation's capacity and specific needs. Here are some tips:

  • Research: Use free resources and databases to find funders offering unrestricted funding. CAN’s development officers are highly experienced in helping clarify organisational objectives and find the right funding. Contact us for advice – details are at the end of the article.
  • Visibility and Honesty: Keep your funding needs simple and transparent. Clearly explain why unrestricted funding is crucial for your organisation.
  • Build Relationships: Engage with funders through pre-application calls or meetings to build trust and understanding.

​Developing a Funding Strategy

A well-crafted funding strategy is crucial for securing the income needed to run your organisation. Here are some steps to develop an effective strategy:

  • Eligibility and Guidelines: Ensure you are eligible for the funding and thoroughly understand the funders’ guidelines before applying.
  • Evidence of Need: Collect and present data to demonstrate the need for your project or service.
  • Clarity and Simplicity: Clearly explain your project or service in simple terms.
  • Realistic Budgeting: Develop a realistic and well-thought-out budget.
  • Defined Outcomes: Specify what you aim to achieve, for whom, and by when.
  • A comprehensive funding strategy not only helps in securing necessary funds but also ensures that your organisation can meet its objectives effectively and sustainably.

Who can help?

We can. As mentioned above, CAN’s Development Officers are very experienced in advising and supporting many hundreds of community groups and voluntary organisations through the complexities of finding the right funding and the application process.  If you’d like help with your funding strategy, call us on 01362 698216 or email office@communityactionnorfolk.org.uk  

We also have an extensive library of factsheets including one specifically on developing a funding strategy, if you join CAN as a member you can access these fact sheets as well as a wide range of additional benefits. Find out more here