How grant funding works

There are many grant funders throughout the UK, these often specialise in a specific area of funding, like sports or supporting people from a particular demographic like the BAME or LGBTQ+ communities.

We must make an application to them for a project or activity we wish to deliver, providing details of who we are, which sector we wish to support, and a detailed plan of the activity along with what it will cost and how long we wish to deliver the activity.

There are two types of grant funding, restricted and unrestricted.

The restricted funding can only be used for the project or activity that had been detailed in the application, this can be split into two areas, capital and revenue.

Capital funding is for projects that improve a building or for purchasing hardware, like computers, to support the charity’s running.
These are often higher-value projects that require quotes from multiple potential suppliers.

If an application is approved by the grant provider for capital projects, they will pledge the money to us.

This means that we do not receive a lump sum in our bank account until after the work has been carried out and we have paid the suppliers, we then must prove to the grant provider that the money has gone out of our bank account.

There is often a time limit on when we must have any work carried out and claimed the money by.

Grant funding that is for Revenue-based activities is still restricted and can only be used for the activity described in the application.

Revenue-based grant funding contributes towards paying the wages of our team for the delivery of the activities.

This is more often paid upfront for shorter activity deliveries of less than a year, but if the activity will last multiple years the funding will be given every 3, 4, or 6 months.

Here is an example…

Funder 1 pays for delivering pool-based activities for women
Funder 2 pays for delivering pool-based activities for underprivileged children
Funder 3 pays for delivering pool-based activities for people with dementia
Funder 4 pays for delivering pool-based activities during school holidays
Funder 5 pays for delivering hall-based activities during school holidays

If the team member who delivers all these activities is paid £1000 a month, which is made up of smaller amounts of money from each of those funders, we have to keep a record of which funder has paid for someone’s wages and at the end of the period we have to provide this information to the funder along with how many sessions have been delivered, the number of people supported in each of the sessions, the impact those sessions have had on the attendees.

Unrestricted funding can be used as we need it, this is often used for insurance, utilities, and other overheads that must be paid to run on a day-to-day basis, as well as contributing towards the administration time of wages.

There are very few grant funders that provide unrestricted funding, those that do have limited money and are always over-subscribed, making it difficult to receive any.

Often, they are for smaller amounts, so we must spend time making more applications to get many of them rejected.

If you have any questions about this please contact us.

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