Sources of funding

Fund-raising is always a challenging part of planning a project, and while important, a clear project plan should be established first.

Funding bodies will wish to see evidence of a business plan or feasibility study with your application, which will back up your vision and will require you to meet certain criteria. You will, therefore, need a clear aim and set of objectives as to what you want to achieve, before you apply.

It is easier to have a clear aim when searching for funding. Projects can go astray by looking for funding and then trying to find a project to match the funding!

Grants are an excellent source of funding and it's worth taking the time and making the effort to investigate which grant awarding bodies, trusts or charities would be willing to support your project, as even a small amount of money from a number of different sources could mount up to what you need.

Most funding bodies will publish details of what they will and will not fund, so check it out before you apply. That way you can be sure you choose the grant that will work best for you.

All grant schemes want to give money - that is what they are there for, but they have their own rules to follow.

Asking questions and for explanations helps them understand what you want to achieve and how they can help you. If they aren't the right grant scheme for you, they may be able to direct you to one that is.

Funding bodies will measure applications for funding against a set of eligibility criteria. These criteria will differ from funder to funder and any group hoping to apply for funding should, in the very first instance, ensure that they are familiar with the funder’s criteria to ensure that their project fits within these.

Many organisations seeking funding for their projects fail at this initial stage.

There are a few simple checks that should be carried out before a group considers making an application for funding.

The constitution

Any group applying for funds will be expected to send in a copy of their constitution with their funding application. The constitution should be signed and dated on the day it was adopted or amended. In addition, a group can only apply for funding for activities which are reflected in the aims and objectives outlined in the constitution. For example, a group set up to promote and provide for the needs of elderly people in Cupar cannot apply for funds to carry out work with young people or with people living in another part of Fife – the constitution does not allow for this and a funding body will reject any application on this basis.

Annual accounts and bank statements

Most funders will require a copy of a group’s most recent set of accounts.

If a funder requests a copy of a group’s bank statement, check whether the original is required or if a photocopy will suffice.

Charitable status

Some funders will only fund groups and projects which have charitable status. The group should have evidence of this either in the form of a letter from the Inland Revenue or a charity number. However, many funders do not require charitable status and will fund groups set up with charitable, philanthropic or benevolent aims. This should be reflected in the group’s constitutional aims and objectives.

Geographic targeting

Some funders will only fund groups and activities based in a particular community.

National governing bodies

Does the group have to be registered with a governing or regulatory body? For example, SportScotland will not fund the activities of a group unless it is registered with the relevant governing body.

Upper and lower limits to funding

Check whether there is an upper or lower limit on the amount of funding available from a funder. If an application is in excess of a funder’s upper limit of funding, then it may be rejected on this basis alone.

Match funding requirements

Some funders will only fund a percentage of project costs and require an element of match funding. Check whether the match funding needs to be in place within a certain timescale.

Applications for capital projects

Groups seeking funding to undertake improvements to a building or to build on land need to own or have a lease on the property or land in question. For example, a group meeting in a local authority-owned community centre will not be granted money to improve the building.

Accurate costings

Check that costings are accurate, up-to-date and inclusive of VAT. It is more difficult, and sometimes impossible, to go back and ask for more funds to cover unforeseen increases in project costs. In some cases it is advisable to factor in a small percentage of overall costs for contingency.

Funders may also require written estimates or quotes for particular items of expenditure; again make sure these are not out of date.

Project planning

There is sometimes a tendency to keep costs as low as possible in the hope that funders are more likely to fund such a project or initiative. In fact, it is better to remember the principle of value for money. Make sure that all costs are included.

Free reserves

If a group has free reserves, or money in the bank that on the face of it can be used to part or wholly finance the project it is seeking funding for, you will be expected to explain why this money is not being used. Funders may accept that the money is earmarked for something else - ongoing maintenance of a building or another project but a group must provide this information.

Defining outcomes

Many funders are now basing their assessment of grant applications on stated outcomes. They want to make sure that grant money is making a difference and bringing about change.