New Connections funding: behind the scenes and reflections so far

• Learn more about the organisations funded through the New Connections programme
• See an infographic with a timeline for New Connections to date and an overview

As a social justice funder, Esmée has funded some brilliant organisations tackling injustice and systemic inequity over many years. But we know that our funding criteria and application processes have been a barrier for newer, smaller, and historically underfunded organisations – including those led by communities experiencing racial inequity.

Why New Connections

If we know what the barriers are, why not just remove them? This is a tension we continue to grapple with, particularly with rising demand for funding. Most organisations we fund have a turnover of over £100k, with paid staff and a board of trustees or directors. Organisations working for racial equity or justice are less likely to fit this model, due to historic underfunding. We worried that dropping our funding criteria for these organisations without changing our application process would have a big impact on the time and resource taken by organisations to apply for funding. We also worried that we were not well set up to support smaller, often community-led, grassroots organisations.

Before New Connections, we have funded grassroots groups in partnership with others who do have the expertise to support them, such as Baobab Foundation and Comic Relief’s Global Majority Fund. We also trialled different approaches to doing this ourselves, such as the Blue Spaces and Youth-led Creativity programmes, which we are in the process of learning from.

But when it comes to organisations working for racial justice, we know there’s more to do. It was clear that we needed to challenge ourselves on our perception of ‘risk’ – including rethinking how we look at and assess track record, scale, governance or financial expectations. Our Board agreed to ringfence £1.5m from the main grant budget to test a different way of funding organisations that cannot currently apply to us because they do not meet our governance or turnover criteria.

First steps

To start, we worked with an external consultant to review the experience of similar approaches/initiatives from other funders, such as the National Influencing Programme by Lloyds Bank Foundation, Grassroots Movements Fund and Pathfinders by The Joseph Rowntree Charitable Trust, and the Ideas and Pioneers Programme by Paul Hamlyn Foundation. We then used this to inform a series of short ‘sprint’ sessions with members of our Involving Young People Collective and Esmée staff to develop options. We weighed the pros and cons of the options before agreeing that an invitation-only, closed fund would make sense at this stage given our capacity and an intention to avoid wasting organisations’ time in applying.

New Connections was set up to make up to 20 grants of £60k for up to two years to organisations who we believe are a good fit to our strategy, but do not meet our usual turnover or governance bar. In line with our commitment to fund more organisations led by communities experiencing racial inequity and our racial justice priority, we aimed to prioritise those organisations. Initial work with the consultant helped to shape the development of the programme. The offer includes additional capacity-building support and a peer network which is being co-designed by the organisations alongside Do It Now Now, who we appointed as the Network Facilitator.

Identifying organisations

Members of Esmée’s funding team were asked for suggestions of organisations from their sectors. These suggestions came from different sources including speakers at sector or community events attended; research into our areas of work – using key campaigns on social media, sector news websites, and 360Giving data; via community support organisations; and from recommendations from people we fund, other funders, or partners.

58 organisations and individuals were suggested. For this first round of funding, we decided not to prioritise un-constituted organisations or individuals as we thought it set unrealistic expectations that we would be able to change our funding criteria to directly fund individuals.

A team consisting of directors from our three impact areas, funding managers from each of the areas and myself as coordinator came together to shortlist organisations – focusing on their impact and alignment to our strategy. We also considered the geographic spread of the organisations. Before reaching out to the organisations, we wanted to feel confident that we would fund them so we developed a set of criteria to check against as part of our due diligence.

A simpler, lighter touch “assessment” process

We wanted to turn the tables with our assessment process, taking as much of the work on as we could ourselves, and keeping to conversations where possible. We started by inviting the shortlisted organisations to have an initial chat with us. In the call, we shared more about Esmée and New Connections, how we found out about the organisations and why we were considering them for the fund. The organisations, in turn, shared more about their work. After the call, we set up a record on our salesforce database for the organisation and sent them an email outlining what we wanted to discuss at a more in-depth second call.

This included:

• The organisation’s work: what the funding would be used for in broad terms, the organisation’s aspirations in the next two years and beyond, and which long-term outcomes they think most closely fit with their work.
• Safeguarding: we asked if they had a policy and/or approach to how they keep their staff and those they work with safe. (Funding was not conditional on the existence of a safeguarding policy and we were open to supporting organisations with this as part of the relationship).
• Diversity, Equity and Inclusion (DEI): approach to DEI within the organisation and through their work as well as current challenges and any changes they are looking to make. We also asked about any questions they might have about Esmée’s approach and work on DEI.
• Finances: management of finance, UK Bank account registered in name of organisation. We emphasised that we were unable to offer grants to individual bank accounts.
• Governance: checked that we had understood their governance model from information from Companies House/Charity Commission correctly and also whether they anticipated any changes to this in the next two years or so.
• Risks: asked about any that we should be aware of.
• Additional support/capacity building: asked what additional support their organisation might need including support on safeguarding, finances, business planning, and fundraising. This was to help with the initial planning for the support the organisations would co-design.

We also requested any ‘off the shelf’ material – such as applications to other funders, reports or plans that we could use to help draft the application. In an effort to make the process easier for organisations, we requested that they do not spend any time on writing new material for us.

To reduce the burden on organisations, we did not ask them to submit a written expression of interest or full application (our usual application process). Instead, I worked with the Funding Manager to write up a draft funding recommendation based on all the information we had gathered through the calls and emails. The draft was then shared with the organisations, alongside a screenshot of their organisational details, so they could review it and provide edits or feedback on it.

Normally, we draft a recommendation based on the information organisations submit through their written application and follow-up calls we have, and these are what are used for the relevant committee to make a funding decision. We usually don’t share this writeup with organisations beforehand, so this helped make the process more transparent.

Overall, we asked for less information on the organisation than we usually do, focusing more on the impact of the work, rather than any ‘risks’.

“Approving” the grant

After both parties were happy with the written recommendation, we took it to our regular bi-weekly review meetings for decision, which is where small grants are decided – with at least two directors approving the grant. For us, this was more procedural. One of the lessons learnt at this stage is that we could have more clearly communicated this to the organisations to avoid any uncertainty that it was still being assessed. Internally, this stage was also important for ensuring shared learning and awareness of the organisations we were funding through New Connections.

Reflections so far

• Overall process: This was light touch for the organisations and most felt it was responsive/attentive to their mostly limited capacity.
• Time to develop and implement: The fund took 18 months from inception (when we first worked with the external consultant) to awarding all the grants. This is partly due to limited time and capacity within Esmée to manage and oversee the programme, but also because organisations needed more time to engage as they were often operating with limited capacity, so correspondence took time. We’re learning that setting aside enough time and resource is crucial to develop and implement initiatives with care – including being responsive to organisations’ needs.
• Clarity over roles and responsibilities within Esmée: When we started this work, we did not have dedicated resource to support it with various Esmée staff taking on different responsibilities in addition to their usual workload. My role as Coordinator for the programme was developed partway through the process in recognition of the need for clarity over responsibilities and to ensure progress. However, we recognise there is a tension between wanting to get on with trying out different ways of working and waiting to have the right things in place before beginning.
• Closed funding: There are pros and cons to having a closed fund with multiple factors to consider:
  • The time cost to organisations in applying to an open fund with so few grants on offer, and the time cost to Esmée in assessing applications.
  • Reliance on Esmée staff knowledge and networks – by identifying organisations to fund ourselves, these are new connections that we already knew about on some level.
  • Limiting our scope – there will be more brilliant organisations doing work that fit our strategy that we could hear about through an open fund.
  • Removal of competition - Esmée finding and approaching organisations removed the usual element of competition for our funding. This alongside the more conversational process created a different dynamic, which was more honest and trusting.
  • Assumptions – without an open process and much publicly available data on organisations, we were making assumptions about turnover, governance, and whether organisations met a shared definition of being led by and for communities experiencing racial inequity. This meant we funded three organisations that didn’t fit all our criteria.
• Transparency over the funding recommendation: Sharing our draft funding recommendation and working collaboratively with the organisation to finalise it gave them an insight to our process.
• The organisations: Generally, the organisations were quite young, mostly CICs (Community Interest Companies) and thinking about transitioning their structure and governance.
• Consistency: An added benefit to my role as Coordinator meant there was some consistency as I was able to sit in all the conversations, which has been helpful in identifying common messages, questions and learning.
• No one-size-fits-all: We recognise that each organisation is unique with different needs and capacities – for instance: organisations have been able to request payments based on what made sense for their organisation. There are also different levels of engagement for the New Connections programme, with their priority rightly being their work. So we’re conscious of needing to ensure that we support them to engage in a way that works for them and they’re able to get the most out of the programme.

It’s important that we use what we learn from New Connections to shape our support for these organisations, but also our main funding. We will share more of our learning as the programme progresses. But if you have a question or thoughts you’d like to feedback about this work, please email us at communications@esmeefairbairn.org.uk.