Dorset Youth Association recently received a grant from the government’s Transition Fund. While the money is enabling the organisation to adapt to the changing funding environment, it isn’t out of the woods yet. Dave Thompson explains

Dorset Youth Association was established in 1943, with the primary focus of providing support and activities for young people across the county. Since these humble beginnings, we have developed our range of services significantly. This includes support for volunteers who run their own clubs or groups in the area, and the provision of advice and information to vulnerable youngsters who visit our Routes Centre. Our support staff deal with issues ranging from emotional and sexual abuse, to housing provision.

Underpinning all of this is our mission to create a better quality of living for children and young people in Dorset.

The current financial situation is making life more difficult for many of the individuals and families we help. We have also been adversely affected by the economic recession and subsequent public spending cuts.

Under the Labour government we received a significant amount of public funding, which represented 86 per cent of our total revenue. This included financial support from Capacity Builders, the Children’s Workforce Development Council and the youth volunteering charity, V.

Time for change

In 2010/2011, we generated revenue of £600,000 including the funding from these three programmes. As a result of cuts, we lost approximately £277,000 in funding. Combined with a contract for a tender worth £43,000 and a £17,000 service level agreement from Dorset County Council coming to an end, there was a £340,000 shortfall in our income. This is having a major impact on the level of services that we could offer.

In addition, we lost around 30 per cent of our staff, all of whom were hugely capable and enthusiastic people. This presented a problem in that it’s difficult to train individuals up to the necessary standard, and engage them with the charity. Although it could be argued that it’s easier to recruit staff now (with the difficult funding environment) it’s not that simple.

Discussions among the staff and trustees concluded that we needed to readdress the balance in our funding streams and increase the amount we were attracting from alternative sources to taxpayer funding. We also wanted to ensure that we maintained full control over the future direction of the organisation, which can so often be problematic when an external source is providing funding.

Golden opportunity

Due to the nature of our work, we had a certain amount of scope to identify gaps and develop new services. So, when the Office for Civil Society announced that it was making a Transition Fund of £100m available to third sector organisations, we were keen to find out more.

The fund was established with the aim of enabling successful applicants to manage the transition to the new funding environment – the outcome being that civil society organisations will be more agile and able to take advantage of any opportunities presented by such change.

An important consideration for us was that the fund isn’t designed to enable organisations to continue working if they don’t already have the financial means to do so. In our case certainly, we didn’t enter a bid for a standalone project. We based our application on some of the long-term objectives we were looking to achieve. The funding is enabling us to undertake a full organisational review, which encompasses:

• Research and analysis of the markets available to us;
• Understanding the requirements of the young people and familes we provide services for;
• Understanding the needs of our colleagues within the sector;
• Recognising our internal strengths and weaknesses as a charity, as well as external opportunities and threats;
• Working environment analysis using the PESTLE [political, economic, social, technological, legal and environmental considerations] management technique; and
• Analysis of existing and potential funding sources.

We saw the Transition Fund as an opportunity to overhaul our mission – our direction of travel, so to speak – create a new business plan, and implement it over the coming months.

With this in mind, we needed to assess staff training and responsibilities, then plan any changes to ensure that we were working as efficiently as possible – for example, potential restructuring and the development of individual action plans for fundraising. Our key focus areas were community giving, public service delivery, social enterprise and trading. All of these represent opportunities for future funding.

Last year, community giving made up 11.5 per cent of our income, including local fundraising, awareness campaigns, charity grants, individual donations, major gifts and philanthropic giving. We’re still working on the review process, but if we could grow to 50 per cent funding in the next 12 months it would be a real boost. This depends on the opportunities available, but we do need to spend more time on this stream.

As public service delivery represents such a large portion of our income we need to look at service level agreements, grants, developing consortia, new commissioning procedures and payment by results, which the government is promoting. Direct payments for services and partnership work create further opportunities.

One of the clear messages we’ve had from our partners in the NHS and within the local county council is that they will no longer be able to provide lots of smaller contracts, service level agreements or tenders. They will be offering fewer, higher value contracts, which are more cost efficient and easier to administer. There will be increased competition for such projects, so we have formed a local consortium, with 21 organisations that currently deliver local services in our county. Barnardos, Children’s Society, Relate (Dorset) and some smaller organisations including community farms are involved. In this way we can prevent service duplication, while positioning ourselves to apply for more tenders in the future. The consortium is operational and we have applied for our first two funding bids – one to Big Lottery, and a tender for drugs and alcohol services.

Last year, social enterprise and trading brought in 2.5 per cent of our revenue. We will continue to attract funds through the hire of our on-site facilities and other service provision.

As I mentioned earlier, we have to be wary of the direction in which funding takes the business. For example, we could have attracted £500,000 to spend on an individual project, which included an element for management costs. However, delivery of the project could easily distract us from our mission.

The Transition Fund represented a golden opportunity to take a step back and look at everything we’re doing, facilitate change in our fundraising strategy and adapt as best we can. The funding has enabled us to rethink our strategy and set clear processes and targets in place. Our trustees will expect us to demonstrate improvement in our financial situation by March 2012.

Ticking all the boxes

The first step in the application process – as is the case with any application for funding – was looking through the documentation and ensuring that we met the criteria.

Once we were clear that we were eligible, we needed to ascertain the main purpose of the funding and then match this with our organisational needs.

We were extremely careful to match our bid as closely as possible to the guidelines set out in the application. Myself and our fundraising officer went through the guidelines in very fine detail to establish our parameters: what we needed to achieve as a charity, what the finding would enable us to do, and the best way of marrying these together.

We also did lots of background reading on current government thinking and potential policy and legislation changes, working out how we would fit in with these.

The fund was launched in November 2010 and the application had to be submitted by January 2011. Many of our staff were on notice at that point, so it was a very difficult few months. While we did work on other smaller bids during the same period, the majority of our time was spent on this. 

Once we had a bulleted list on page, it was a matter of writing a narrative. At this stage we asked some internal and external partners to read over the bid for us to ensure we were on the right track. This was invaluable as you can get so involved in writing a bid that it becomes difficult to recognise the areas in which you can improve. Another person can pick up on a point that could make the difference between success or failure. So, it was a process of refining and checking, multiple drafts, meeting word counts and then polishing the application ready for submission. We worked through the process stoically, ensuring all bases were covered.

Fight or flight

The reality of the process is that if your organisation is at risk, you prioritise funding applications such as this and ensure that you get them right. This is difficult as you also need to spend time on improving the quality of your work and service delivery, which will frequently drop off when you’re concentrating on a bid. This can be especially true in smaller charities with no extensive management structures or fewer staff. Inevitably, the task will fall to one or two people, so some difficult decisions will need to be made.

A lot of people will see that we were awarded £105,000 and think that the hard work is over. However, we’re not out of the woods by any means. We have lost services and are desperately trying to attract funding to deliver more, but we’re determined to do it. The Transition Fund has helped us to restructure and reshape our future, and we will welcome anyone who can offer help or support to get in touch over the coming months.

Dave Thompson is director at the Dorset Youth Association.

This article first appeared in The Fundraiser magazine, Issue 5, May 2011