In part 6 we looked at getting your income mix right. We are now going to look at Match Funding and Financial Sustainability, which often come up on grant application forms.
Match funding
It’s always worth checking if a funder is expecting to see some level of Match Funding. Match funding means that the amount you are requesting from the funder is matched by the amount you are also able to put into the pot. For example if your project costs £12,000 you may request £6,000 from the funder but must show where the other £6,000 will come from.
Your ‘match’ can be in monetary form from another income source or from your reserves. It could also be in terms of volunteer time, or other costs paid for by the charity, but these must directly relate to the running of the project which is getting funded. Both the grant funding and your match funding need to be evidenced, monitored and accounted for – even though the funder has not given you all of it.
Financial Sustainability
Most funders are keen to know that their funding will make an impact in the long term and not just the short term.
With capital items, on-going sustainability is quite easy to demonstrate, as the item purchased would be expected to have a useful life well beyond that of the monitoring period, usually 1 year. However, you may be asked how this will be maintained or replaced when it wears out, such as purchasing a washing machine to enable homeless people to wash their clothes. It’s obvious that at some point the machine will need replacing. Is there a plan for how that will be funded in the future?
The most obvious financial sustainability would involve charging the users of your service, so the activity can carry on after the initial pump priming funding ends. However, for most charities that approach would have a limiting effect on the numbers who would access the project and, most importantly, is likely to hit hardest the very people you are trying to help.
Another way to look at sustainability is to consider the impact that the funding will have on the beneficiaries during and after the project year. If you were planning to work with 10 struggling families over the course of the year, the sustainability element to focus on would be the expectation that they will then be in a much better place to move forward with their lives, with greater resilience for the future and less need for external intervention, than was the case before they met you.
Another option
To help sustain activities in future years, do also consider increasing your unrestricted income options (see part 6). For example a garden project selling its produce, or general fundraising events, such as a quiz night or sponsored fun run, or increasing regular donors.
It is also fine to say that after this project is finished you will look for alternative grant funding to continue to develop the work in line with the feedback gained.