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The good giving blog: a new foundation

The Good Giving blog is written by Stephen Welton, non-executive chair of BGF, and Charlotte Moses Rains, chief operating officer of the BGF Foundation

Last year, BGF established an exciting new venture, BGF Foundation, an independent charitable foundation supported by a minimum of £1.5 million of cornerstone funding over the first three years. The foundation will provide support and funding to small and mid-sized local charities across the UK that are focused on improving the lives of disadvantaged children, young people and adults.

At Christmas, we announced our first three grants, to charities tackling the cost-of-living crisis. These were Little Village, a London-based charity providing baby clothes and supplies; the Joshua Tree, which supports families living with childhood cancer in the North; and Let’s Feed Brum, which provides food and friendship to those who need it in Birmingham.

I’m delighted to say we have recently revealed three more grants, this time to charities in Scotland. They are Glasgow-based Sunshine Wishes, which fulfils wishes for sick and terminally ill children; Aberdeen-based Befriend a Child, which helps children and young people with befriending and mentoring; and Edinburgh-based Home Link Family Support, which supports young families in Edinburgh and Midlothian.

I am very proud to chair the board of trustees for the BGF Foundation, alongside some excellent individuals with deep experience of both charitable giving and entrepreneurship. These include Fiona Lowry, founder of BGF-backed The Good Care Group, Phil Male, who serves as a non-executive director of several BGF portfolio businesses and has served on the board of Comic Relief, and Michelle Hill, chief executive of TLC: Talk, Listen, Change, a North West relationships charity.

With that preamble done, I would now like to welcome you to the fist instalment of The Good Giving Blog. This is a blog series that I am writing in partnership with Charlotte Moses Rains, the chief operating officer of the BGF Foundation. It is intended to constructively examine the landscape of charitable giving to understand what works well and what can be done better. We hope to build on the thinking that has led to the BGF Foundation, to help us further develop our own specific approach, as well as lay out our vision for effective charitable giving today and in the future and encourage comments and ideas from others.

This will be an ongoing project, taking in a range of subject matter. We will examine a range of topics of concern for grant-making organisations as well as the charities they support. These will include: the importance of a regional approach, which supports small and mid-sized charities across the whole of the UK; the value of volunteering and expertise in addition to financial backing, which can make a particularly big difference for smaller charities; and the value of targeted due diligence to assess which charities can make the best use of funds.

For today’s blog, however, I want to discuss a notable element of the foundation’s strategy that is, whilst not unique, then certainly distinctive among grant-making organisations in the UK. That is our resolution, where possible, to provide unrestricted funding.

Unrestricted funding, as the name implies, is funding that comes without conditions attached. By providing unrestricted funding, we essentially entrust the trustees of the charity to deploy that funding wisely, and to adapt their own strategy in line with the future needs and direction of the charity. We believe charities are best placed to understand their beneficiaries, their needs and how best to deliver their charitable objectives.

It sounds logical enough, but in fact, unrestricted funding is far from the norm among grant-making organisations. Restrictions attached to grants are very common. For example, a Scottish donor might specify that the money only be spent in Scotland. A donor with an interest in a particular cause, say cancer research, may want the funds spent only on that. A typical specification is that donated funds should directly support projects and tangible goods or services rather than be spent on the charity’s overheads.

In providing unrestricted funding, our thinking is similar to that of the Institute for Voluntary Action Research (IVAR), which has highlighted seven reasons in favour of unrestricted funding, including that it: frees up charities to make better use of their expertise; gives them agility to respond to changing circumstances and needs; gets rid of time-consuming admin; builds trust between donor and beneficiary; and gives charities greater resilience. (Read the full list.)

We believe our approach will be welcomed by many charities. What makes us think so? Because the average charity would swap a £1 million restricted grant, with various bells and whistles attached, for half as much in unrestricted funding, according to research by consultancy nfpSynergy.

I look forward to sharing more of our thinking about effective charitable giving in the months and years ahead. In the meantime, I would encourage you to look at some of the charities we have supported, which are all doing excellent work to improve the conditions of people living difficult lives.

Sunshine Wishes Children’s Charity

Befriend a Child

Home Link Family Support

Little Village

The Joshua Tree

Let’s Feed Brum

BGF Insights 03.07.2023
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Stephen Welton, non-executive chair of BGF
Stephen Welton Non-Executive Chair

Before taking on the role of Non-Executive Chair, Stephen was the founder CEO of BGF between 2011 and 2020.