Community Fund strategic plan

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Ten months after the Community Fund launched the review of its strategic plan for 2002 to 2007, it has published the finalised document, approved by Parliament on 15 April. Consultation on the plan included questionnaires, meetings and randomised survey work. About 750 organisations returned questionnaires, and a summary of the results of the consultation can be seen on the CF web-site at http://www.community-fund. org.uk/index2.htm The new strategy reflects the Community Fund’s expectation that it will have to tighten its belt over the coming period. From a high point of 1999, when it distributed £450m, the CF is budgeting to spend £213m a year ‘from 2004 onwards’. The plan also brings the CF’s work even more tightly into line with government’s preference to see Lottery funding being targeted on the least well off groups in society. While there is a prominent commitment on page two of the new plan that the CF will remain a ‘generalist grant giver’, groups and causes falling outside of the defined priority categories will have to make an exceptionally compelling case to be successful.

The three ‘key elements’ to the strategic framework are:

Targeting of awards
ensuring that funds achieve long-term benefits 
closer working with other agencies.

Main policy changes

Targeted beneficiaries: 
i priority areas 
ii groups of people

Priority areas are dominated by Fair Share beneficiaries, most of which have already been announced. In the split between CF and NOF, CF-funded areas will be: 

Anglesey 
Ashfield 
Basildon 
Blaenau 
Bolton 
Bournemouth 
Burnley 
Caerphilly 
Darlington
Gwent Bolsover
Doncaster 
Dudley 
Ellesmere Port & Neston 
Enfield 
Great Yarmouth 
Kirklees 
Luton 
Neath Port Talbot 
North Somerset 
Peterborough 
Portsmouth 
Rotherham
St Helens
Solihull (north Solihull) 
Stockton-on-Tees 
Tendring 
Thanet 
Wakefield 
Walsall 
Waltham Forest 
Waveney 
West Lancashire 
Wigan 
Wrexham

The Scottish version of the plan does not specify which Fair Share areas will be CF funded.

In addition, CF regions and countries list the following geographical priority areas:

Eastern: Harlow, Thurrock
West Midlands: Cannock Chase, Newcastle-under-Lyme, Tamworth 
East Midlands: no named areas but three categories of geographical disadvantage are identified 
Scotland: no additional areas identified 
Northern Ireland: 118 wards specified throughout all 25 district / borough councils 
Wales: Bridgend, Newport

We know that Fair Share commits the CF to a three-year spend of £70m on its Fair Share areas, and another £10m on areas yet to be announced under its forthcoming rural disadvantage scheme. 

Groups of people the CF is targeting remains unchanged from the consultative document. The broad categories are: children and young people; disabled people and their carers; BME communities, including travellers; refugees and asylum-seekers; older people and their carers. The sixth group in this category is ‘people in areas disadvantaged by social or economic change’, which enables regions to target groups such as the homeless or those affected by rural isolation, outside of named geographical priority areas.

Each country and region has set its own, more specific priorities from within these broad beneficiary groups. Potential applicants should first check their local CF priorities carefully.

Core costs
The CF has for the first time accepted payment of certain organisational overheads, after years of lobbying and debate on this tricky issue. From April 2002 the CF will accept two kinds of charge: i the proportion of salary directly attributable to the supervision or management of the CF-funded project ii a contribution towards accommodation overheads in cases where the funded project does not require extra space.

The CF will not fund:

  • all-encompassing ‘service charges’ as part of an application 

  • notional allocations of all support-staff time l core costs of applicants with annual income of £10m-plus 

  • any overheads or other costs specifically paid for by another funder.


It will, however, accept supervisory costs for more than one person where project personnel have multiple reporting lines, or for consortium bids.

The CF hopes that by accepting these specific and limited elements, it will save precious staff time in reviewing budgets from potential applicants. The voluntary sector managers’ group ACEVO is expected to report in November on some more work it is doing on core costs and accountability; at which point the CF says it will review its own approach.

Match funding
For the first time, from April 2002 there is a requirement for match funding. Organisations with incomes of £5m-plus will be expected to fund 25% of their application either from external sources or from their own reserves. CF says this is not an absolute ruling: it will still consider 100% funding in exceptional cases.

The match funding rule technically only applies to the large grants pro-gramme (ie, for projects of £60,000-plus). But the CF would look pretty closely at an Foundation (www.neweconomics.org.uk), for example, believe that to achieve a step change, community enterprise needs substantial capitalisation, major reinvestment in community-owned assets. This will require from funders a new level of understanding and an investment perspective in relation to grant making rather than a client/supplier contract perspective in which the funder typically seeks to buy outputs (see box, right). application for 100% funding from a large organisation under its medium- and small-grants programmes.

Maximum grant size
The ceiling on maximum grants has been lowered from £400,000 to £300,000. But in London, the South West and Northern Ireland, where funding demand is particularly high, the ceiling will be £250,000. These upper limits do not apply to the England-wide, UK-wide, international or research programmes. 

Continuation funding
While the CF will continue to provide second-term grants of up to three years, the rules are to get tougher from April 2003. Second-term grants will be tapered to a final year contribution of 25%. The CF has yet to work out the details of how it will apply tapering, but the thinking behind it is clear: applicants will be expected to devise and implement ‘exit strategies’ as part of their business planning. The requirement to have an exit strategy is not new, but the need for it to be robust will be far greater from next April.

All second-term grants awarded from April 2003 onwards will be affected by this policy change. We can expect more detail in the coming months.

Continuation funding quota removed
The good news on second-term funding is that the CF has removed, with immediate effect, its budget quota. In the past the CF has limited second-term grants to 25% of its total large grants programme budget. In some regions this has had the effect of squeezing out continuation funding applicants. The fund is now confident it can manage requests for refunding without imposing a ceiling.

Table 1

Capacity building
Another contentious issue. The Community Fund has decided to limit its funding of community infrastructure development to its geographical and beneficiary priority groups. This is less dramatic than it sounds, as these categories are likely to constitute the lion’s share of awards anyway.

Acheiving long-term benefit
This is the second key element of the CF’s new strategy, and addresses the huge and difficult issue of whether funded projects are providing real value for money and achieving effective change. The CF has commissioned several pieces of research from which it hopes to devise grant-making procedures that will assess and improve the impact made by funded projects. One early change is to have one-to-one ‘grant set-up’ meetings between newly successful applicants and their CF grant officers, with the intention of providing a more focused and intensive level of support. There is clearly, however, a lot more work to be done on how to measure and evaluate long-term benefit. The strategy plan talks of exploring and possibly adopting an ‘investor approach’ to funding. Expect this, and the new emphasis on ‘outcomes’ to be a far more prominent feature of the CF’s work than during the first seven years of grant-making, and expect it also to have an impact on what will be expected of award-holders in the way of demonstrating the value of their projects.

Under this heading, also, the strategic plan flags up the CF’s intention to begin to use the powers it has under the 1998 Lottery Act to delegate grant-making to other bodies, and also to solicit applications from specific groups. 

The CF is also hoping that the government will make the rule change flagged up by the Culture Secretary Tessa Jowell in March, to enable it in future to distribute non-Lottery funds on behalf of other agencies, especially the government itself. This could impact significantly on the CF’s future role and the size of its funding pot.

Working more closely with others
This third key element of the strategy is an acknowledgement that the CF needs to be far more closely bound in with other strategic initiatives and funders in future. It will increasingly expect applicants to be aware of and even linked in with other agencies working locally on similar or complementary projects. This should come as welcome news to those local authorities that have had difficult relationships with the CF in the past.

The strategic plan gives the following illustrations of relationships the CF wants to pursue: 

  • regional and country funding forums 

  • other funders: charitable trusts, EU, local government, devolved administrations and central government 

  • local voluntary sector infrastructure bodies

  • Regional Development Agencies and their non-England equivalents 

  • voluntary sector umbrella bodies 

  • government offices and non-England equivalents 

  • equality agencies

  • LSPs and SIPs

  • government agencies rolled out at local level such as Connexions.


Table 2