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A Matter of Common Sense?


Report on the attitudes and approaches of funders to the

governance and workforce development costs of voluntary and
community organisations

by Ceri Hutton and Stephanie Sexton

for the

Governance Hub and UK Workforce Hub

June 2006
Introduction and Methodology (Sections 1 and 2)

The research was commissioned by the Governance Hub and the UK Workforce
Hub to help the voluntary and community sector (VCS) get a better
understanding of funders’ attitudes and approaches to supporting governance
and workforce development costs.

The research was commissioned in March 2006 with a reporting deadline at the
end of June. Given the disparity of funder viewpoints and the limited timescale it
was clear that the purpose of the research was to provide a snapshot of views to
aid further discussion (rather than seek to be a comprehensive overview of

24 funders were interviewed in detail during the fieldwork period. These funders
represented as broad a range as possible of ‘funder types’ (including non-
statutory and statutory, large and small and national and local). Case Studies
were generated in order to illustrate some of the issues emerging through
discussions. These are to be found in Section 4.

A detailed listing of all funders interviewed, including a brief description of their

current approach towards the funding of governance and workforce
development, is included at Appendix 3.

The Strategic Context (Section 3)

This research will contribute to a debate which is more broad ranging than an
immediate focus on funding for governance and workforce development. This
debate includes the strategic and research agenda around capacity building,
increased sector professionalism and the role and values of the VCS.

In addition, there has been important strategic and research consideration given
to both the questions of ‘How to Fund’, and ‘How to Cost’. Both of these
questions, with in particular the increasing focus on the principle of Full Cost
Recovery, form an important backdrop to this work.

Though it was not within the scope of this research to provide a comprehensive
strategic analysis, the key debates are summarised in Section 3. Importantly,
these should be taken into account when considering the next steps.

Findings (Section 4)

The report findings provide a summary of the key thematic areas emerging
through the interviews with funders. Section 4 also provides a series of ‘Learning
Boxes’ which summarise the key points of learning for the VCS, and a series of
Case Studies, which illustrate some of the complexities of funding around this
area. Only the key thematic areas are summarised here.

As an overarching point, the report makes it clear that the funders interviewed
represented a very wide range of philosophies, values, funding practice and

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focus. For example, some funders were interested in developing long term
relationships with an organisation, whereas others were not. Some funders
regarded the VCS as a service delivery mechanism, whereas others were
interested in the wider role and focus of an organisation.

Given the broad range of perspectives and views, the report makes it clear that
the emerging themes should be taken as a starting point to further discussions,
rather than a summative review of current thinking and practice.

Definitions. Funders had some difficulty defining what governance and

workforce development were, often preferring to call them organisational
development. Some funders were interested in these areas per se, whilst others
were interested in them as indicators of an organisation which is ‘fit for purpose’.
In addition, whilst some funders were prepared to discuss and be flexible about
what types of governance and workforce development activities they funded,
others viewed these areas as being essentially ‘core costs’ which they would only
fund if shown to be directly relevant to their particular funded project or activity.

Core Costs and Full Cost Recovery. Funders had a wide range of approaches
to the funding of core costs. In addition, funders had a wide range of views about
whether or not governance and workforce development should be included in a
general core cost calculation, or pulled out for more particular attention and
potential funding. There are a range of mixed and sometimes conflicting
messages from funders about how the VCS should present such costs. The
principle of Full Cost Recovery was not, in the main, entirely understood and
several funders expressed concern that this needed further attention and debate.

The Motivation of Funders. There is a wide variety of reasons why funders

support the areas of governance and workforce development. For some, they are
viewed as intrinsic to the role and success of the VCS itself. For others, they are
a vehicle for community or individual development. Some funders have an ‘in
principle’ enthusiasm for these areas, whilst others see their funding as a
necessary core cost in order to protect their investment in a particular service or

Assessment. Sometimes the assessment process itself can provide some

support to the VCS by helping them think through their core organisational
needs. Funders undertake assessment in a variety of ways: for example, some
employ ex-senior managers from the VCS, and others use local assessors with
links to a particular community. For some, the assessment process combines the
collection of both hard and soft information about the organisation and its needs,
whereas for others a more ‘tick box’ approach is adopted. To a certain extent,
the funders who wanted to develop a longer term investment in the organisation
were those who also were happy to be flexible and less prescriptive about which
organisational costs they funded (including governance and workforce
development costs).

Types of Support Provided by Funders. Aside from funding, a range of

support is offered to the VCS to help them examine and develop their
governance and workforce development practice. Assessment itself can help
reveal needs (and provide advice), and some funders had developed strategic

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programmes of support to respond to the emerging needs of the sector (for
example, by funding infrastructural bodies themselves). In addition, funders
have developed a range of other non-financial support programmes including
Skills Banks, Mentors, Consultancy support and a full time Development Worker
who works alongside applicants to help them develop and review their work.
Again, the provision of such support varied widely: some funders regarded such
non-financial support as critical, whereas others did not.

Strategic Issues Raised. Funders think that the VCS needs support in a variety
of ways, including around start ups and the development of practical support for
trustees. They recognise that the VCS is coping with a range of pressures which
could benefit from further discussion and co-working. In addition, funders
themselves identified a range of areas where more support would be welcomed,
including help in understanding quality frameworks and the development of an
inclusive and realistic debate around the principle of Full Cost Recovery and its
implications for the future.

Conclusion and Ideas for Future Action (Section 5)

There are two over-riding messages which emerge from this piece of research.
Firstly, though ChangeUp has highlighted the importance of governance and
workforce development, it was felt that the VCS itself needs to ‘seize the ground’
and define why such areas are vital, and how they should best be funded.
Secondly, there is a need to ‘spread the word’ about the need to fund costs
associated with governance and workforce development and importantly to help
all funders gain a sense of how, and why, such costs are important.

The role and contribution of funders as actual or potential support mechanisms

to the VCS needs to be acknowledged alongside the support offered by existing
VCS infrastructural bodies. Future discussions should consider both contributions

A variety of practical ideas for action emerge from the research, ranging from
initiating a more comprehensive debate on Full Cost Recovery, to exploring
practical initiatives around e.g. quality standards. It was hoped that the hubs
would assist in taking forward some of these.

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