Show me the money: giving grants to individuals
21 July 2014
When I think of charities, I think of the complex organisations that many have become—providing advice and services or mounting campaigns to influence public opinion and policy. Giving people money (charity in its simplest form) isn’t the first thing that comes to mind. It seems somehow old fashioned, even unsophisticated.
But personal grants are still an important option for people in need and there are lot of organisations that still provide them.
In 2010, more than 3,200 organisations gave around £632m directly to individuals in financial crisis, or without the means to pursue education and training opportunities. Comprehensive figures on how many of these charities exist are hard to come by, so it’s difficult to get a sense of the trends in demand and supply. But we know, at least, that this kind of work is happening at a large enough scale to warrant attention.
These grants tend to be given out by small charities, such as benevolent funds, giving very focused support to specific groups, meaning that the charity sector has a bottom heavy approach to financial security. Funds exist for almost any group you can think of: from nurses, teachers, civil servants, bankers, soldiers and members of specific trade unions, to people living with a particular disease or mental health problem, and those from a certain area or of a certain age.
So, what does this mean for the sector?
- A reason for giving. Funds that have a strong group identity—based on profession, location or experience—provide a personalised motive for donation, reflected by the proportion of income that comes from personal legacies. This money might not otherwise have found its way into the voluntary sector.
- Localised support. Funds based on location, and smaller charities more generally, are often more responsive, more accessible and have a more familial feel. A knowledge of local issues can be an important part of giving the appropriate support.
- Lack of coordination. Having a large number of small organisations inevitably sacrifices efficiency. There is duplication of physical assets and staff roles (such as fundraising and marketing), whilst beneficiaries are faced with a daunting, uncoordinated, and often invisible range of options for support.
- A focus on short-term relief instead of root causes. The services these charities provide essentially address the same problem—financial insecurity—which is influenced by a whole host of factors beyond a simple lack of money, such as welfare reforms, wage rates, eligibility criteria for benefits, health conditions, levels of individual financial education and the actions of financial service providers such as banks, insurance companies and lenders.
- Lack of collective voice. Given the complexity of this area, a strong voice in public policy is essential. By sub-dividing charities in terms of size and focus, it becomes much harder for charities aiming for financial security to mobilise as one.
- Evidence gaps. Similarly, with a lot of small charities operating in silos, it becomes much more difficult to aggregate evidence and assess the size of the need, without which it’s harder to think about its causes and the direction of travel.
There are certainly benefits to the way that individual grant giving is approached at present. As with any other issue, immediate need cannot be ignored in light of larger problems. But there is room for greater coordination through collaboration between organisations and the strengthening of voluntary sector infrastructure in this area.
Larger organisations, some of which are already doing good work, can help coordinate a response to financial insecurity, improve the visibility of the support available to beneficiaries, and provide a powerful voice in public policy.