How do we ensure publicly funded grant makers remain relevant for the twenty first century?

In a recent piece I quoted a figure that Senscot had published, claiming that over one-third of Unltd’s Millennium Commission funded investments were going to organisations without any form of asset lock. Unltd’s chief executive, Cliff Prior, contacted me following the article’s publication to say that this figure was incorrect and that the actual figure was far lower. He told me – as is now on their website – that the actual figure was only 30 out of 5,000 awards. Which is around half a percent of awards made.

It’s worth clarifying where the one-third figure came from and how it differs from the, equally correct, figure of 0.6% that Unltd prefer to use.

Rodney Stares, Senscot’s Treasurer and the author of the statement on their website, has explained that the figure is drawn from a report that went to Unltd’s board in 2012. The paper showed that the proportion of Level 2 awards (more substantial awards of up to £15,000) that were going to Sole Traders and Companies Limited by Shares – neither of which provides an asset lock – between 2008-2012 added up to 33.3% of the total. This is the figure Senscot quoted and which I referred to.

The figure Unltd have quoted is, I believe, the proportion of total awards made, including Level 1 awards – which go to support people with ideas, but without any organisational structure around them.

I accept that the one-third figure could be misleading, since it does not include Level 1 awards and I have sought to clarify the basis of these numbers. Nonetheless, the one-third figure does provide an important indicator of more substantial investments made.

However, despite the confusion (now, I hope, cleared up), I do stand by my general view that Unltd has not delivered against its original proposal, particularly in relation to the drawing in of significant private sector finance to support social ventures and in the way it has sought to secure charitable funds from other sources to deliver its programmes.

It’s worth – not least for reasons of transparency – explaining the basis of my opinion. At the time when the proposal to establish Unltd and bid to take over the Millennium Commission endowment was being developed, I was running a charity supporting homeless and ex-homeless people to run community projects, Groundswell UK. I was approached by my father, who was one Unltd’s founders (though no longer associated with the organisation), to see whether we would support the proposal – along with a large number of other not for profit organisations. After objective consideration of what was being proposed, we decided to lend our support to the initiative and wrote a letter of support for inclusion in the submission. I also appeared in a promotional video that was produced; explaining why I thought Unltd’s plans to support people with ideas to improve their communities was a good idea. Since we were asked to support the proposal, I was given sight of the plans that were being submitted to the Millennium Commission.

I was most impressed by the charts that showed how the Millennium Commission’s endowment would be more than matched by huge swathes of private investment which would provide the finance to implement their proposals. The Millennium Commission funding would be used to leverage this additional investment and bring extra finance to support social good. It was an attractive part of the proposal – bringing in huge amounts of cash to support social entrepreneurs, but one that has never materialised.

This is my biggest disappointment about Unltd.

It offered something more entrepreneurial and exciting than what had gone before. It was not, to my mind, ever intended to be ‘just another grant distributor’ funnelling public money to good causes. If that had been the intention, then would it not have been more efficient just to hand the money back to the Lottery distributors that the Millennium Commission funding had been siphoned off from in the first place?

There is though, I think, a wider debate which we ought to be having and that is what we see as the role of funders that are distributing public money. How should they operate? Should they be concerned about asset locks, governance structures and profit? Or should they focus exclusively on the outcome and not worry about the means of achieving it? Do we expect grant distributors to collaborate to maximise the efficient use of resources? Or should we be encouraging competition as a means of driving up quality?

When Unltd was being set up there were of course, no Community Interest Companies, little discussion of asset locks and the social investment sector was still in its infancy in the UK. Things have moved on and of course the context has changed greatly too.

How do we ensure our funders remain relevant and fit for purpose in order to meet the aspirations and needs of social innovators and entrepreneurs? How do we ensure they remain accountable and transparent? What is the role of civil society and other stakeholders?

These are questions which I feel need to be asked if we are to meet the social, economic and environmental challenges of the 21st century.

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One thought on “How do we ensure publicly funded grant makers remain relevant for the twenty first century?

  1. Pingback: Big Society Network affair continues to shine a light on murky workings of government | tobyblume

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