Section 2 examines who the grant holders are; section 3 looks at the average ODT scores;
section 4 explores what they have been funded to undertake; section 5 looks more broadly
at how grant holders have framed LSF within their applications; and section 6 attempts to
draw out some broader strands of analysis, which will be examined further throughout the
evaluation. Section 7 ends with a brief summary and conclusion.
2.1 Region
Organisations in all English regions have
been funded although there are important
variations. Twenty-one percent are based
in London and 17% in the North West
compared to 7% in the East Midlands and
6% in the North East and East of England.
Figure 1 opposite gives the actual number
of organisations funded in each region.
These regional patterns of funding reflect
the general distribution of voluntary
organisations reported in NCVOs civil society almanac: but there are also important
differences. A greater than proportionate number of grant holders are in the North West
and a comparatively smaller number of organisations have been funded in the South East
compared to the general regional distribution. Other regions that show a disparity are the
East of England (which has the lowest number of grant holders but a higher than average
number of organisations generally) and Yorkshire and the Humber (where the opposite
pattern is observed: this region has a lower than average number of organisations generally
but accounts for 12% of the grant holders).
48
36
30 29
19 17 16 14
11 10 9
6 4 4 4 3 3
2.3 Income
The ODT provides four pieces of income data on each grant holder - confirmed
organisational turnover in 2013 and 2014, estimated turnover in 2015, and estimated
income in 2015 (see figure 3 for details). Taking estimated income for 2015, the average
figure was 530,588 (ranging from 0 to 9,400,000) representing a small overall increase
on 2014. For further analysis, these income figures were separated into income
bands/brackets.
180
160
140
120
100 2013 Turnover
2014 Turnover
80
2015 income
60
Estimated 2015 turnover
40
20
0
0 to 25k to 100k to 500k to 1m to
10k 100k 500k 1m 10m
From 2015 income data by far the most populous group of grant holders is those with an
income between 100k to 500k(59%) with just under a third (30%) between 500k to
1m. A much smaller number (9%) of organisations have an estimated 2015 income of over
1m.
120 115
107
100
80
60
44
40
20
0
Decrease No/small change Increase
Income growth can also be split up in different ways. Analysis of the 2013 and 2014
incomes revealed the following distribution (see figure 5). The following growth bands were
used: no growth (less than 1% increase), small growth (1%-10% increase), large growth
(10%-50% increase) and very large growth (more than 50%). Evidence from recent NCVO
research1 suggests that LSF grant holders may be generally more financially successful than
small and medium-sized charities overall because in NCVOs analysis there was a fairly even
distribution between organisations that had seen a fall, a rise or stayed the same between
2008/09 and 2012/13 (please note the different time period).
Significantly for a programme like LSF the NCVO research showed that the income of small
and medium sized charities is more volatile than larger charities. For example, the research
found that of all charities with an income between 100k-500k in 2008/09 - 23% had
moved into a lower income band and 8% in to a higher income band by 2012/13. Looking
by sector - health, social services, law and advocacy lost the highest proportion of overall
income. This volatility extended to the very survival of organisations with 23,000 small and
medium charities disappearing in the same period. Over the same period 18,000
organisations were created.
Crees, J., Davies, N., Jochum, V. & Kane, D. (2016) Navigating Change: An analysis of financial trends for
small and medium-sized charities, NCVO
140.0
116
120.0
100.0 90 93.9
80.0
60.0
38
40.0
23.2 22
20.0 5.4
0.0
no growth small growth large growth very large growth
-20.0
-14.8
-40.0
Using the growth bands defined above (figure 5), there is a noticeable amount of
organisations that have had no growth and large growth. Probably more telling is that there
are 22 organisations that have grown by more than 50% in one year, with an average
increase of 94%. It seems that this average is large because of the maximum values in
terms of real growth (as opposed to percentage increase).
In particular, thirty-three (12%) grant holders reported no fixed assets and 90% reported no
accumulated reserves. Although this figure is likely to be a significant under reporting2 it is
in sharp contrast to NCVOs almanac data which reports that 81% of medium-sized charities
(100k-1m) have some reserves.
Using current asset data, table 3 shows the breakdown of grant holders in to different
groups with around three fifths of organisations (62%) having current assets of less than
half their income and around two fifths (38%) having current assets of more than 50% of
their income.
Table 3: Current assets as a percentage of income
This disparity could be due to a lack of understanding among grant holders (as the definition of what
constitutes reserves is quite technical) or it could be gaming by applicants who felt that if they detailed their
reserves they would be less likely to receive funding. Either way, the data on accumulated reserves should be
treated very cautiously.
The average figure given for the organisations proportion of income that was secured was
70% (minimum 5%, maximum 100%). The average figure given for the organisations
proportion of income that was highly likely was 26% (minimum 1%, maximum 90%).
35%
31%
30% 29%
25% 24%
20% 17%
15%
10%
5%
0%
20k to 40k 41k to 60k 61k to 80k 81k to 100k
3
Hunter, J., Cox, E. & Round, A. (2016) Too small to fail: How small and medium-sized charities are adapting
to change and challenges IPPR North
2.8 Changes in income by amount applied for
Those organisations who experienced a decrease in funding were not more likely to apply
for one level of funding than any other. In contrast, more of those who experienced no
change in funding applied for funding in the 41k to 60k and 61k to 80k ranges. There
were fewer organisations who had experienced increases in funding that applied for the
maximum funding amount.
45
40
35
30
20k to 40k
25
41k to 60k
20
61k to 80k
15 81k to 100k
10
0
Decrease No/small change Increase
50%
40%
30%
22%
20%
10% 6% 6%
3% 3% 1%
0%
A key assumption of LSF is that different organisations are pursuing their own journey (see
the theory of change), however, some useful dimensions about organisational trajectory
and exactly where the LSF project fits into this emerged from both the quantitative and
qualitative coding.
Dimension Cluster
Financial health The financial data presented above brings into focus the
very different financial trajectories of different grant holders
trajectories which have shaped their LSF application and
will likely drive many different aspects of their LSF projects.
Broadly three groups emerged:
The relatively narrow scoring range of the grant holders (low standard deviation) is perhaps
the key finding from this analysis. It is not clear what underpins this low variance. It could
be:
1. The ODT (or at least its scoring system) does not discriminate clearly between
different organisations. This does not mean the scoring system isnt valid (i.e. if 65%
is better than 64%, which is better than 63%, then the measure is valid) but rather
that it does not offer clear variance between organisations that are better than
others on these dimensions;
2. It could be that there is relatively little variance between grant holders on these
dimensions either because:
a. There is little variance amongst the population of medium-sized VCSE
organisations generally;
b. The LSF programme has targeted funding towards organisations within a
certain range (i.e. not those that score very highly or very lowly)
Explanation 2b is likely to have played a role, however, the analysis of the applications
suggests that there is considerable variance across the grant holders. As such, if explanation
1 is correct then this also means that the ODT is not especially discriminating in terms of
change over time for the same organisation. This will present some challenges when
comparing pre and post LSF ODT scores at the end of the evaluation, however, as long as
the measure is valid the low variance can be calibrated into analysis.
Strategy Quality
Market & & Record & & Overall
Sustainability opportunities planning capability impact scoring
Decrease 67% 58% 63% 67% 60% 64%
(n=44)
No/small 68% 59% 66% 69% 60% 66%
change
(n=107)
Increase 68% 61% 66% 68% 58% 66%
(n=115)
Total 68% 60% 65% 68% 59% 66%
(n=266)
These findings are primarily based on the new codes that have been generated by the evaluation team
through coding funded applications (NB: in some cases the sub-codes do not total the overall code because
not all applications contained enough detail to sub-code accurately).
through fundraising and charitable trading by up to 60%5. Within the LSF applications fifty-
seven percent of projects are focused on developing new funding streams and/or
diversifying income whereas 20% of successful applications target increasing funding from
existing streams. Thirty-six percent of grant holders intended to develop new products or
services whereas only a small amount (6%) outlined developing more income from their
assets. Twenty-seven percent of applicants intended to develop new funding streams by
targeting new funders. Twenty percent were intending to target institutional funders but
only a small number (8% overall) intended to target individuals (whether the aim was to
charge for fees and services or to raise donations was not coded). Most of those applicants
intending to target institutional funders were looking at private sector (12%) or statutory
sector (13%) funders. A smaller number of applications were looking at VCSE funders (4%).
These statistics are represented on the flow chart in figure 9.
Crees, J., Davies, N., Jochum, V. & Kane, D. (2016) Navigating Change: An analysis of financial trends for
small and medium-sized charities, NCVO
decreased their overall spending between 2008/09 and 2012/13 and, in general, increased
the amount that they spent on generating funds. Charities in the income band 100k
500k also nearly halved the proportion of their spending that went towards staff costs6.
One additional element mentioned in some applications was effective pricing which had a
number of different aims: full cost recovery; price discrimination (i.e. charging higher rates
to those able to pay more); or cross-subsidy charging more to some to subside provision
to core groups (these were not coded).
Some applications stressed the importance of an existing relationship with the advisor
(sometimes long lasting and multi-faceted) whereas others were unknown to the
organisation
In some applications the advisor had been involved in the initial ODT and application
stage
Some advisors are part of a consultancy firm whereas others are individual actors
Some applications discussed how the advisor had been recruited whether it was
informally or through a formal, selective recruitment process
4.12 Business partner
The business partner element of the application (q25c) has not been quantitatively coded,
however, some insights emerged from qualitative analysis. As in section 4.11 these insights
can inform future typologies, will be explored in more detail throughout the evaluation and
help to give detail to assumptions within the programme theory of change. Table 8 details
these insights.
Aspects of the different dimensions of the business partner role and relationship
Some organisations gave substantial detail to the business partner role and had a
clear plan to how it fitted in to LSF. For some of these organisations some of the
success of their LSF project will clearly depend on the success of the business partner
role. However, for others little detail was given, the business partner didnt have a
substantial role and they were peripheral to the success of their LSF project.
Similar to the advisor role, some of the business partner roles are around discrete
projects whereas some have a much more general advisory role.
The nature of the relationship differed with some of the grant holders having a
multifaceted pre-existing relationship that reached beyond employer supported
volunteering. The relationship also differed between organisational and individual
links.
Not all business partners were private enterprises with some from the public and
VCSE sector
It was not clear from the applications what the motivation of the business partner
was although it will be important to explore whether it falls into CSR, HR, PR or
something else.
Dimension Clusters
Scope General projects have a wide scope across the whole
organisation and often involve a root and branch review
including governance, structure, management systems and
services. Discrete projects are more associated with
organisations that are putting plans into practice and are
often focused on developing specific systems e.g. HR,
finance and IT or developing a new product or service.
5.1 What are the problems that grant holders are facing that LSF is responding to?
Some applications gave considerable detail as to the rationale for the LSF project. Most
grant holders detailed external changes which their organisation needed to respond to
including:
Funding - many saw the funding environment as increasingly tough and competitive
and the most oft-cited external change was around funding both in terms of
o the perceived reduction in funding (especially in reduced funding from
statutory sources due to austerity measures);
o the nature of funding with the medium term shift from grant funding to
contracts that is well documented in the NCVO almanac
Specific policy or legal changes that the organisation had to respond to;
Increased demand for services due to austerity measures especially perceived
increased poverty of certain beneficiary groups (this perception is supported by the
other research referenced in this report);
Broader changes amongst beneficiaries including changing demographics and new
technologies (e.g. web support).
Far fewer organisations detailed specific internal changes that were driving the need to
change. These included growing pains of the organisation where the need for change was
seen as a symptom of success (i.e. growth) rather than a response to failure. Another
internal change identified by a small number of organisations was the loss of founders and/
or new leadership.
Although the majority identified external changes as the overarching driver of change, the
remedy (by virtue of the LSF model) was to bring about internal changes. Therefore, a
number of internal changes were seen as necessary (i.e. the wide range of elements that
were outlined in section 4).
5.2 How have different elements of the LSF projects been understood and operationalised?
Space within the applications was restricted and often contested concepts were used with
little explanation, for example, an application may mention improving monitoring and
evaluation processes without going into detail on what this may entail (is this box-ticking
or simply due to a lack of space?). This made analysis of key conceptualisations challenging
and it will require considerably more detailed analysis throughout the rest of the
evaluation. Many applications used a lot of technical terms that are not so commonly used
in the VCSE sector e.g. market intelligence, harvesting data, leveraging. In isolation
there use is normal but some applications were extremely dense with this type of language.
It was not always clear what accounted for the high use of this type of language but it could
be the following:
Have certain types of organisations applied / been successful in LSF? (i.e. those
more fluent in this type of language)
How much is the language a reflection back of the language used in the tender
documents? (i.e. how much gaming has there been/ framing the project to fit the
fund?)
Is it due to the input of business/ private sector consultants? (i.e. we know from the
journey case studies that some advisors were extremely active in bid writing)
Or is this language quite normal in how VCSE organisations frame these processes
and behaviours?
Despite the challenges outlined above, analysis did provide some findings around
conceptualisations / deeper understandings. Including:
Most grant holders (even those who see themselves as successful) clearly outline
the need to make significant changes in order to adapt to their environment. In
some cases the scope of these changes is fundamental and across the whole
organisation;
Most grant holders clearly articulated the LSF advisor model by clearly identifying
areas where there was an internal lack of skills, knowledge and experience.
Crucially, a clear procedure to rectify this was given by such activities as advisor
support, training and capacity building or changing personnel;
Sustainability was primarily understood as long term financial sustainability. This
was conceived of as a good thing because it would allow the organisation to
continue to deliver its services. The key characteristic that was seen to underpin
sustainability was fitness within the new and changing environment (primarily
economic but also political and social). In some cases this conception was taken to
the next level with fitness being conceived as the ability to continuously adapt to
the environment;
There was a distinction between organisations who conceived of risk as primarily a
project management issue (e.g. staff leaving or an advisor not delivering) and those
organisations who had calibrated risk into their project i.e. because the activities
represented substantial change (e.g. a restructure or a new product) the project was
conceived as inherently risky in terms of success;
Conceptions of staff training also differed. In the most straightforward of cases, staff
training is specified on specific and limited expertise that the funding is dedicated to
developing. In other cases, however, staff training is limited to staff workshops,
often with the purpose of ensuring buy-in to the project.
Organisations gave much greater detail and clearer conceptualisations of some processes
than others:
Changes in specific systems were often given succinct rationales, remedies and hoped
for outcomes. For example, a number of projects detailed the need for improved
financial systems and the specific benefits that would be gained, they then detailed the
precise role of the advisor and key staff within these processes and how it would be
achieved (including listing the software packages that would be used). In contrast, the
two areas that had the least clear conceptualisation were around:
o Impact assessment there were excellent examples of organisations who
already had impact assessment processes in place and wanted to improve them
both for service development/ strategic planning purposes and for attracting
funding. These included developing frameworks (such as theory of change),
developing systems and engaging external support. However, in other cases
impact assessment was little developed and was pre-supposed to be a means of
proving effectiveness to funders. In other cases, quite basic monitoring
systems were conceived as impact assessment;
o User involvement the quantitative coding showed that there were substantial
differences in the level of engagement that was perceived. In some cases there
was a fundamental commitment to increase user power in service design and
organisational decisions. In others user involvement was conceived as
structured consultation which would feed into organisational decisions. In a
minority of cases, user involvement was conceived as little more than market
research;
7. Appendices
The needs analysis and thematic mapping element of the evaluation has provided an
excellent opportunity to analyse existing LSF data most notably the application forms of
funded organisations and their initial Online Diagnostic Tool (ODT) responses. The aims
were:
This work has been most useful in order to generate additional variables that will be used in
quantitative analysis at the end of the evaluation (in summer 2017) and in order to draw
out emergent themes that will be explored throughout the rest of the evaluation.
In order to be attributed to a code applications had to outline some detail around the
specific element if the item appears in a long list without any substance they were not
coded. The following coding frame was used:
Income;
Grant size;
Income to grant size ratio;
Service area;
Region;
Age