The UK’s grant making industry is on the brink of an evolution.
At its core, the long-established process of grant making aims to align those wishing to fund worthy causes with charities and community groups who depend on funding to help those in need. However, communication between applicants and funders can often prove to be challenging, and the need to complete multiple application forms each year is having a significant impact on the Third Sector’s efficiency and productivity.
With research revealing that 66% of UK grant applications currently fail, let’s explore the current UK grant application process and the reasons behind this.
Size and competitiveness of sector
According to the Charity Commission, there are over 168,000 registered charities in the UK, alongside 184,000 known unregistered charities. Furthermore, it’s estimated by industry experts that there could be as many as half a million unknown unregistered charities for local causes and community groups across the UK.
With the number of British people who give regularly to charitable causes in decline, and a UK-wide pool of just 10,000 funders from which these causes can draw valuable resources from, the Third Sector is fiercely competitive. This places significant pressure on charities to invest heavily in the grant-making process, making every application as tailored and comprehensive as possible in a bid to secure valued funds.
UK third sector grant-making research found that an average of 62 questions were asked in a typical grant application form. However, huge disparity also exists, with some funders asking in excess of 190 questions, including similar information being requested in a multitude of ways. The same study identified a mean word count of 1,622 for qualitative responses within grant application forms.
It is against this backdrop that the enormity of the UK’s grant-making industry becomes clear – worth between £3-4bn per annum, with vast investment currently being made in a process that looks to connect the dots between two diverse groups.
The average UK grant application takes 19 hours to complete, with registered charities typically making 22 applications annually. The sheer quantity and duplication of produced content requires huge resource – time that could be strategically spent elsewhere.
Much of this issue comes down to eligibility and the successful matching between appropriate funders and applicants, and with this comes recognition that the current system is no longer fit for purpose. Sizeable levels of inefficiency have arisen as a result of there being no standardised framework and structure to the grant-making process, in turn meaning that each and every application requires input from multiple stakeholders – all of whom likely juggle this task alongside many other priorities pertinent to their cause.
Overall cost to the sector
Research estimates that writing grant applications in the UK costs the sector £1.1bn annually. This estimation only factors in costs associated with paid staff across registered charities – and it is believed to be closer to £1.4bn when non-paid staff and trustees are added to the equation.
Against this backdrop, a full time equivalent of £921 million is spent annually applying for unsuccessful grants – and by the nature of the sector, these costs are being indirectly financed by funders and public donations. With an estimated 8% of voluntary sector paid-staff time being currently dedicated to the grant making process, research indicates that a move towards a standardised approach could pave the way for a sizeable uplift in workforce productivity.
As the Third Sector continues to grow, evolution is essential. Digitising and standardising UK grant applications is a key first step to ensuring that worthy causes receive the funding they sorely need in the most efficient and timely way possible.