Guidance on Writing Successful Grant Applications
One of the major obstacles to delivering community activities is how to pay for it.
Fundraising is one option but there may be competition on how to use this money and it may not raise enough money. Another method is to deliver activities as services for other organisations that pay a fee in return. However, participants may also have to pay a fee, which may limit the benefits from the projects.
Providing services is certainly an option in same cases but may not always be possible, particularly when an organisation has no history of delivering similar schemes. An alternative method is to secure grant aid to finance community projects.
Securing grant aid is not without its own difficulties.
The varying application processes can seem bureaucratic and burdensome. The time waiting for a decision on an application that could be rejected can be frustrating and ultimately disappointing.
This guide whilst not offering a magic solution will hopefully help you to identify an appropriate organisation for funding and provide some information about what is required to complete a successful application. It provides some generic advice on what a good application will demonstrate and how to write a strong application to the appropriate funding programme.
Grant Aid Applications: A few tips for success
Grant aid organisations will request different types of information and varying levels of detail.
The general rule is the more funding requested the greater the level of detail and supporting documentation required.
Programmes with lower maximum funding amounts, often below £10,000, may only request in addition to a completed application form your constitution, your accounts and financial projections.
The following provides some general guidance on writing an application and the type of information and documentation that may be requested.
A purpose of grant aid is to help organisations improve their performance by increasing their resources to achieve more.
However, the grant making organisations have their own objectives and the organisations they fund need to help them to achieve them.
Any project funded therefore must have an element of mutual benefit between the two organisations. Grant aid tends not to be a blank cheque but usually has conditions of funding attached to ensure it is aligned to the funders objectives and rules.
The first thing to consider is whether securing grant aid is the best method of funding your project. For example, can you fund the project from your own resources or would it be suitable for sponsorship?
If you are going to attempt to secure sponsorship a different approach is required. A business case for the sponsor would need to be identified. In other words what will they get out of it that will help their business, such as promotional opportunities to people who may buy their product or service?
Once you have decided grant aid is the most appropriate method of funding your scheme, you need to identify the most appropriate organisation to apply to.
Eligibility and choosing an appropriate grant organisation
After selecting some grant organisations with a programme that seems to fit your proposal read their guidance notes carefully and ensure you can satisfy all the eligibility criteria.
You should also consider their strategic funding priorities to see how closely your proposal meets them. The more priorities you can meet the better your chance of success. Larger grant requests require more strategic justifications such as meeting local authority objectives or agendas such as in health or safer and stronger communities.
If they give the success rates of applications it may enable you to make a judgement about your own chance of success. You should also check their levels of funding and their average grant levels, if possible. There is no point in applying for more than they award and if you are applying for more than their average grant you will have to make a strong case for funding.
Contact the grant giving organisation
If allowed telephone the organisation to discuss your proposal, get some guidance and establish a point of contact. It may save a lot of wasted time and energy if they discourage an application at this point. They may also provide some useful guidance and hints.
Another benefit of speaking to the organisation is the actual personal contact.
Although application processes can seem impersonal and bureaucratic you should remember they are managed by people. If you build up a relationship with an individual, they can be a good advocate at the organisation for your project and can provide you with more tailored advice than their guidance notes.
Remember they can often make or break your application so give them the respect they deserve! Personal contact may not always be possible, and processes vary but at least by contacting the organisation you may be told whether your project is worth making an application or not.
Writing an application: Things to do
Once you have checked an appropriate organisation to apply to you need to plan how to write your application.
It is important not to rush an application, you may understand the benefits of your project, but the funder will not unless you can clearly represent it and justify the need for the project within an application.
Planning the Project
- What will the project do?
- How will the project outcomes meet the funding priorities?
- When will the project be delivered and meet its intended outputs and outcomes? Who will be responsible for managing and delivering the project?
Planning the Application
Can you provide all the further information requested and how will you answer the questions in a way that maximises your chances of success? You should take time to consider the budget and make sure it is realistic as many organisations will not increase their grant if costs subsequently increase.
Consider the time frames: you need to make sure the decision will not be too late for your project. They will not bring a decision forward for you as they have their own internal timescales to adhere to such as board meetings.
Make sure you can explain what the grant buys and why the grant is needed. Can you justify the financial need for a worthwhile scheme and demonstrate you have exhausted all other potential funding (if this is requested as some bodies will only offer grants when there are no other funding possibilities).
Answer the Question
Assume the grant assessor knows nothing about your organisation or your proposed project. Provide clear answers that are specific to the question in a concise a manner as possible.
Provide a clear description of the proposed project such as the planned activities and who will be the beneficiaries. Explaining what the project will achieve and ensure it explains how it will meet the funding priorities. Include the project’s timescales such as a proposed start and end date, if applicable. Try to sell your project as something that is distinctive or that offers something different, this will
make it more attractive to the funder as they will receive their own benefits from funding innovative schemes.
The description should provide a clear project proposal with outputs / outcomes.
You cannot have a general project idea it must be clear what you want to achieve and how it will be achieved.
What is the Need for the Project?
The application will generally have to demonstrate a recognised need for the project.
- Why is the project important?
- Who have you consulted to identify unmet demand such as a locally identified need?
- How will the project meet this identified unmet demand? You may need to provide evidence that justifies the case for the project. Explain how the need was identified such as by research, consultation or is it identified as strategic importance by a relevant organisation such as the local authority.
Most grant programmes will require applications to demonstrate how the project will benefit the wider community.
To satisfy this condition you need to evidence who will benefit, such as priority user groups which should be specified in the funding programmes guidance notes.
Explain whether you have established partnerships with community groups who will benefit from the proposed project. If you can provide forecasts on the number of users it will help to demonstrate the community benefit from your proposed project, many funding programmes will request this information anyway.
Provide a clear and realistic budget that adds up, request a specific sum of money and identify where the remaining projects costs will be found (if applicable). Financial forecasts will probably be requested that detail income and expenditure possibly for both the actual project and for your organisation as a whole for the next three years. Your most recent annual accounts will probably be
If you are buying equipment include quotes where possible. If you are employing staff include salaries and job descriptions. If you are building a facility include estimates or confirmed costs if possible. Whatever the project is evidence how the costs have been calculated.
Grant giving bodies tend to prefer to fund organisations that contribute some of their own funds to a project, although this may not always be necessary especially for smaller grant requests.
If possible contribute some funding to the project, unless it is for a grant offering 100% of project costs. Financial contributions also demonstrate the viability of an organisation. They may also like to see evidence that you have exhausted other potential sources of funding.
If your accounts show larger reserves explain what they are ring-fenced for and why you cannot use them for this project. Or use them instead!
Outputs are measurable products such as a new facility, a product or a service provided. Outcomes are benefits related to the project such as from the outputs.
They are changes and benefits that are generated from the project. They could be reduced crime levels, more people participating in sport or improved literacy.
Indicators of the Project Being Successful
Linked to the identified need and the identified outputs/outcomes some measurement of success may be required, such as a target for the number of participants and/or reduced crime in the area.
A successful application requires more than a good project idea it must demonstrate the applicant has the skills to manage and deliver the project proposed. This is more relevant as the grant request increases.
To satisfy this requirement the application should show how the project will be managed and that the applicant has the required skills.
If a partner organisation is delivering the project, then their skills and experiences will need to be included. If the project includes employing staff, then the appropriate procedures and policies will need to be in place.
A grant organisation may request information regarding the sustainability of the project, this may relate to a number of factors. It may be how the project will continue after the funding ends, such as it will be self-financing. It could mean the project has an exit strategy for the project.
An example of an exit strategy would be for the participants to join a club or to leave a legacy of qualified coaches. The other possibility is the project is of limited time frame with all the intended outputs/outcomes and identified need satisfied.
The application should demonstrate:
- What you want to do (the project)
- Why you want to do it (identified need)
- What it will achieve (the project outputs/outcomes which should be aligned to the funding priorities)
- How you will do it
If the application can demonstrate all of these it should offer value for money and have a good chance of being successful.
In addition to the application additional information may well be required. For smaller grants this may be no more than your annual accounts, your constitution and possibly some financial forecasting.
As previously mentioned, the larger the grant request the more additional information that is required. Larger requests may need to make a more strategic case for funding such as the support of the local authority, a sports national governing body, a specialist agency or meeting agendas such as social or health related.
Your most recent accounts are usually requested as part of your application.
Requests for three recent bank statements may also be requested.
Depending on the type of project various development plans may be requested, although this generally only applies to larger funding requests.
These may include business plans, sports development plans, community development plans and action/work plan for the projects delivery.
There are many sources of guidance for these plans. Often these are requested as part of the development process which may follow the initial application submission.
Evidence of Need
Projects should respond to communities needs and therefore satisfy an identified unmet demand.
Some applications may require referee’s statements but even if they do not, they can help demonstrate the need for the project. To demonstrate demand the beneficiaries should be identified and should offer their support for or participation in the project.
For example, if the project is working with schools it is helpful if they are identified and confirm their participation as part of your application.
If the project meets a local authority priority include reference to this and/or get the written support of your local authority.
Larger grants are often outcome focused. You will need to clearly demonstrate the benefits of the project and how they meet an identified need.
If you are applying for capital work on a building you will need to demonstrate sufficient security of tenure for the site, probably a lease-hold for the requested amount of years or ownership of the freehold. A rule of thumb is for requests over £50,000 at security of tenure for at least 21 years is requested.
Nearly all organisations will request a constitution or memorandum of association / articles of association or a trust deed. For CBS’s your model rules would be appropriate.
Larger grant requests will require evidence of partnership working. To demonstrate this, you will need to show other organisations are involved in the project. The partner will have a need for the proposed project you will deliver or alternatively they will have the necessary skills to help successfully deliver the project.
An example would be for a school’s literacy project with free match tickets for the children included the partner would be the school, the club and any other organisations involved in the project’s development or delivery.
For larger funding requests any potential risks may need to be identified and methods of mitigating this risk also demonstrated. General risks include time, cost, reputation, quality, scope of the project changing, benefit, and people/resources. More specific may be cultural and social risks.
Not all the information included in this guide will be relevant to every funding programme. There are no hard and fast rules.
Charitable trusts have more flexibility and discretion when offering grants as they are not beholden to government targets and regulations, whereas public sources of funding may have more stringent criteria and conditions.
The key is to study the guidance notes thoroughly. The guide though should shed some light on what grant organisations may expect generally from an application to be successful and also provide some guidance on terms and questions often
included in an application process.
Remember, The FSA can assist you with the process of developing grant applications. Good luck!
Introduction to Community Shares
Community Shares are a type of share capital, known as withdrawable shares, unique to Co-operatives and Community Benefit Societies.
Most people are familiar with share capital in Companies known as transferable shares which can be transferred or sold by shareholders to a third party and a mutually agreed price.
Investors buy the shares in the hope of either a dividend or the possibility that shares will appreciate in value. Votes are normally attributed to the number of shares held and there are normally no limits to the number of shares held.
As Companies get bigger, they enter onto Public Markets where shares can be easily transferred and sold.
Withdrawable shares are totally different. Shares cannot be transferred between people, and the value of the share is fixed. Subject to approval from the Society Board an individual can withdraw their shares, which in effect are bought back by
Interest can be paid but because of the nature of the organisation it can only be a small amount as the vast majority needs to be reinvested to meet the objects.
Still an exit route exists which is often not the case in small/medium Companies (like football Clubs) where there is no market for shares. In reality this exit route means that the Club need to either recruit new shareholders, encourage existing shareholders to invest more, pay interest into shareholder accounts and most obviously build up reserves by retaining some profits.
Why it’s a good option for a Club to raise finance
Community Shares are a popular way to raise finance compared to other options because:
- They raise money without ceding control of the club
- It allows money to be raised in an environment controlled by the Club Board
- Shares are withdrawable by investors (i.e. you can get your money back) when the Club can afford it and at the discretion of the Club Board.
- As shares they don’t sit as a liability in the club accounts but also the Club won’t find that they have to repay funds at a time when you may not be able to afford it
- It saves the Club money on costs associated with a share issue in a Company as it does not fall under the Financial Services and Markets Act regulation.
- Depending on the size of the offer the associated costs with a share offer in a PLC are likely to cost at least £50k to launch.
- It offers subscribers the opportunity to share financially if the club is successful as a small amount of interest (say up to 2%) could be paid at the discretion of the Club Board.
- It gives the possibility of the Club paying back all or part of an investor’s money, by buying back individuals shares, albeit there is no guarantee and it is most likely in the medium to long term.
- Investors in Community Shares must be a member of the Club, so there is an opportunity to gain a bigger more active membership
- It should have broader appeal than to just the normal people that put their hands in their pockets
Other important factors
We are talking about capital. Any share offer would not be about propping up losses. You’d want to have some projections to show how money would be used and hopefully reserves built up to enable withdrawals.
The overriding reason is that it is a social investment. However, it is fairer (and should have more impact) than just asking for donations or concentrating on fundraising as there is the possibility of an exit route in the future.
That’s not to say it’s a replacement for donations and fundraising though, that can continue.
Protecting 1 member 1 vote
Within the constitution there are different options available to incorporate Community Shares but the two most likely would be that the Community Share would either be an additional share which sits alongside the ordinary share (with the voting rights) or the rules could be simplified to allow one type of share which allowed individuals to build up a share account up to the legal limit for individuals of £100k but would need to contain enough money to meet annual membership subscriptions. Either way more shares doesn’t buy you more votes.
Possible tax incentives for investors
It is possible that your Community Share offer might qualify for a tax incentive scheme such as Social Investment Tax Relief (SITR), the Enterprise Investment Scheme(EIS)or Seed Enterprise Investment Scheme(SEIS).
These schemes are run by HMRC ,and have various qualifying criteria.
If a scheme qualifies for SITR or EIS, individual investors have the chance to claim back up to 30% of their investment from their personal tax liability–investment must be for at least 3 years.
As you can see, a Community Share offer can suddenly become even more attractive when you consider an individual could withdraw all of their original investment, but pay 30% less tax on the amount invested, not to mention the feel-good factor of helping the local sports club.
To find out more about Community Shares check out the information available at the Community Shares Unit or contact the FSA’s Community Shares Practitioner, Richard Irvine on Richard.Irvine@theFSA.org.uk