Recap: what we know about funding needs so far
We can see throughout this report that there is a significant need for funding to enable charities to progress with digital and develop their organisational capacity. As a recap:
- Digital is a priority for charities: A quarter of charities say that digital is a top priority in their organisation (27%), whilst half say it is important, but there are other more pressing priorities (53%).
- Digital is integral to service delivery: 81% of charities are using digital tools in service delivery.
- Organisations are struggling with finances and capacity: Squeezed organisational finances and a lack of capacity are creating a significant barrier for two thirds of charities. A further 60% (an increase on the 49% last year) say the biggest barrier they face to progressing with digital is finding funds to invest in infrastructure, systems and tools.
In recent years, our reports have shown that demand for digital funding has outstripped supply. This year, we can see once again that there is limited access to digital funding and that organisations struggle with the digital skills and capacity to apply for this.
Accessing digital funding
Only a quarter of charities have received any digital funding this year
- Applications for digital funding: Only a third of charities applied for digital funding this year (34%), whilst a further 18% of charities (and 22% of small charities) applied for funding, but did not include any digital costs in their applications.
- Success: A quarter of charities (24%) accessed digital funding. Of these, 6% received funding for substantial digital costs, whilst 19% (1 in 5) accessed funding for some digital costs, such as new devices or staff time. Note that some charities received both (these have not been double counted). A further 10% of charities were rejected for funding applications that included digital costs.
- Size and success: 26% of large charities were successful and received funding for digital costs, compared to 19% of small charities.
- Digital stage and including digital costs in applications: Charities at an early stage of their digital journey are less likely to apply for digital funding. We can see that 31% of those at the curious stage did not include digital costs in funding applications, compared to 21% of those starting out with digital and only 12% of those at the advancing and advanced stage.
- Digital stage and accessing funding for digital costs: Of those who accessed digital funding, 68% were at the advancing and advanced stages, whilst 23% were at the starting out stage and 8% were at the curious stage.
Funding needs
Three quarters of charities need funding to create time and capacity to work on organisational development and digital strategy (73%)
We asked charities what they most needed funding for. We also asked charities to tell us the one thing they would ask of funders in order to progress with digital. There are five key funding needs.
- Time (73%)
The need for funding to create internal capacity has increased significantly. This year, three quarters of charities (73%) need funding for capacity to move forward with digital. This need is similar for 75% of large and 74% of small charities. Last year, 45% of charities needed time and/or support to develop their digital approach or strategy. The 73% of charities identified at least one of the following funding needs(calculated to avoid double counting):
- Organisational development (57%)
- A digital strategy (39%)
- Someone internally to lead on digital change (30%)
“What we lack is TIME. Our small management team is so busy delivering services and doing everything to support that there is little time for anything else.”
“We would ask them to fund us for 12 months to put our digital plan into place because we know that once in place, it will increase and diversify our income and will reduce our administration and operating expenses as we will be more efficient. It will free up time that our staff team can spend on reaching and supporting more people.”
“Funding is always an issue to grow our capacity in this area, yet it underpins all we do.”
“To fund a post’s time for at least 12 months so we can focus entirely on switching to digital methods of delivery.”
- People with expertise (50%)
A top priority for 50% of charities is a need for funding so that charities can bring in digital expertise. They identified at least one of the following funding needs (and has been calculated to avoid double counting): a need to access external advice and expertise (37%) alongside a need to employ core digital staff and people with digital expertise (22%). This was also a prominent theme in open responses:
“Help from a professional to develop a digital strategy and help with security/GDPR.”
“To allow us to bring in external expertise to give us capacity to implement an ethical and nature led digital strategy.”
“To help us invest in working with reputable and effective digital agencies who can help us move forward in our digital reach and strategy and to see paid advertising as a solid investment.”
- Training
43% of charities (and 49% of small charities) say they most need funding to access training for staff and volunteers. This has increased from 36% last year. This was a prominent theme in the open responses for 40 charities.
“We’re a small team so it would be useful for us all to have training sessions for digital technology and funding for IT equipment and services.”
“Consultancy support with automation to help us save time and provide bespoke training for staff around AI and other digital tools.”
“To employ someone to update the website and help to put together a strategy and also to train volunteers.”
- Tech and systems
Two thirds (66%) of charities need funding for internal technology, hardware, systems and licence costs. They identified at least one of the following funding needs (the overall figure has been recalculated to avoid double counting):
- 28% who need funding for IT and infrastructure.
- 26% who need funding for devices and computers.
- 25% who need to implement a new CRM.
- 34% who need funding for subscriptions and licence costs (similar to 33% last year).
Last year, the second biggest need for funding was for computers, devices, IT and infrastructure (37%). Whilst charities need funding for tech and systems, capacity, people and skills development are more important this year.
“Invest in our digital infrastructure and help us build a strong and secure technology base. This could improve our services, making them more accessible and efficient, while also ensuring the privacy and security of my users’ data.”
“To support us with a volunteer management system that would significantly reduce administration time, reduce the number processes we use and streamline our work.”
- Services
Overall, 42% of charities needing funding for services (this has been recalculated to avoid any double counting). This includes 24% of charities looking to develop existing digital services, 18% who want to develop a new digital service or innovation and 19% are looking to undertake user research, discovery and scoping. The open responses show that charities are no longer able to design inclusive or effective services without additional funding for digital costs.
“Please recognise that our core costs have risen in line with the cost of everything and don’t refuse funding for things we need to deliver our services – websites, platform for newsletters, additional staff time needed to advance our knowledge and understanding.”
“Be aware that in order to create inclusive, anti-oppressive digital spaces for our work we need resourcing and support, and to understand that to reach disabled, neurodivergent and queer communities a safe digital experience is critical.”
“Provide upfront funding for innovation that will result in more efficient services in future years.”
Funding barriers
Nearly half of charities (45% of all charities and 49% of small charities) cannot find suitable digital funding for their needs
The most significant factors affecting charities’ access to digital funding are:
- Prioritising meeting demand and delivering current work (38%)
- Paying the bills and other core costs (30%)
- Funders not covering digital costs (28%)
- Funders not covering staff time spent on digital and data (23%)
- Not being able to find a funder to support a digital project (21%)
- Applications for face-to-face services are more likely to succeed (21%)
We can see there are three overall barriers charities face when accessing digital funding:
A lack of suitable digital funding
- Overall, 45% of charities say the biggest barrier they face is a lack of suitable funding. The figure is the unique proportion of charities facing one or more of the following barriers (recalculated to avoid double counting):
- Their typical funders do not cover digital costs (28%)
- Their typical funders do not cover staff time spent on digital and data (23%)
- They cannot find a funder who supports their digital project (21%).
- This rises to 49% of small charities, compared to 40% of large charities.
A lack of capacity to prioritise applying for digital funding
- Looking across the responses, 46% of charities say the biggest factors preventing them from seeking digital funding are linked to capacity. This rises to 52% of small charities. The figure is the unique proportion of charities facing one or more of the following barriers (recalculated to avoid double counting):
- The need to prioritise meeting demand, which affects 38% of charities (this rises to 43% of small charities and 46% of those providing frontline services).
- 30% of charities (and 36% of small charities) saying they need to prioritise paying the bills and other core costs.
- The need to prioritise meeting demand, which affects 38% of charities (this rises to 43% of small charities and 46% of those providing frontline services).
- This is disproportionately affecting charities in Wales (41%) and in Scotland (44%).
- These highlight the pressures that charities are currently under and the impact on organisational development.
A lack of confidence that funders will support digital applications
- Overall, 34% say they do not apply for digital funding because of the way they think this will look to funders (recalculated to avoid double counting). The is the proportion of charities facing at least one of the following barriers:
- Funders are more likely to support face-to-face services (21%)
- If they include digital costs within their core costs, their application will look too expensive to funders (13%).
- Funders are more likely to support face-to-face services (21%)
- For those delivering frontline services, 28% say they do not apply for digital funding because applications for face-to-face services are more likely to succeed.
The barriers are consistent for charities led by and targeting specific marginalised groups and other demographic groups. However, charities led by or supporting black communities look to be disproportionately affected by a lack of suitable funding:
- Black led charities: 41% say their biggest barrier is ‘we cannot find a funder who will support our digital project’, compared to 21% of all charities.
- Charities supporting black communities: The biggest barrier for 35% is that their typical funders do not cover digital costs (compared to 28% of all charities).
“Digital development – software/licences, staff provision etc typically fall into core costs and therefore many restricted funds do not cover. Marketing – whether digital or not is very rarely covered within a fund. Recognition from funders that all of the above are required to successfully deliver projects would be a step forward.”
Better funding practices: What charities are asking for
When we asked charities to tell us one thing they would ask of funders, 55% explained what they most needed funding for in order to progress with digital (discussed above). A further 40% focused on the need for funders to improve their funding practice in the following ways:
Understand digital costs and why they matter
A clear and consistent theme is a need for funders to learn more about digital costs. Charities want funders to better understand what they are, why they exist and why they are important to fund. More importantly, charities want funders to appreciate the value of funding digital costs to the organisation, service delivery and communities.
“They need to understand digital so they understand our asks … and raise full cost recovery percentages.”
“Understand that core digital costs are vitally important to us being able to deliver our services.”
“Please understand that our organisation cannot operate without our digital infrastructure, which enables us to reach out to those needing our support. Please fund this!”
Fund digital costs as a core cost
Overwhelmingly, charities want funders to recognise that digital costs are integral to service delivery. They believe funders should cover the costs of devices, licences, infrastructure and staff time as an integral core cost. Charities asked for full cost recovery, core funding or unrestricted funding to support these effectively.
“Allow us to receive funding for staff devices, core costs and for service user devices. More unrestricted funding, if the funder’s due diligence suggests they will fund us then trust us to use it for what we need to do. Our ‘bread & butter’ provisions that are hard to fund.”
“Allocate a proportion of each grant to digital costs.”
“Please allow full inclusion of digital costs in our applications.”
Make it easier to include digital costs in application forms
On a practical level, charities are looking for funders to improve their application processes and forms to be more inclusive of digital costs and funding needs. They asked funders to provide clear guidance and budget lines for digital costs.
“Commit to funding digital costs by incorporating it within their grant applications.”
“Provide clearer guidance on what they’re willing to fund.”
“Make it easy to apply for those who don’t know what they don’t know.”
“A space to explain how necessary digital costs are to maximise our reach, efficiency and impact.”
Support us to develop our organisation
Another prominent ask is for funders to support with capacity, through core funding or unrestricted funding. This would give charities time to explore how they want to move forwards with digital and to upskill their staff and volunteers. In addition, many charities ask funders to give them additional support (directly or through signposting) to determine what they need.
“Fund our core work so we are no longer working in scarcity, then we will have capacity to explore other areas such as digital.”
“To provide funding without us having to know upfront what exactly the funding would be used for in order to apply for the funding in the first place. Allow space for us to receive funding and then find out how it can be used best, perhaps with support or signposting from the funder.”
“Funding to appoint a digital worker who will help address our digital weaknesses as an organisation. Current staff and volunteers do not have time/capacity to undertake training because we prioritise service delivery. Without direct developmental investment there can be only minimal progress.”
“To award a grant and also to give advice on suitable providers or point us to another organisation who CAN give that help and advice.”