What are unrestricted funds and how can you encourage them?

Be transparent

Many trusts and foundation grants come with conditions restricting how the money donated will be spent. These funds are ideal for one off projects but suggests a lack of trust and confidence in charities to invest their donations effectively. Furthermore, individual givers need the reassurance that their contributions will make a difference which has led to more and more charities asking for donations in exchange for a specific project, item or function.

While no one wants to gift a donation to an organisation that will fritter the funds on administration, donors should realise that robust governance and the work to ensure your charity is there for those who need it in the future comes at a cost.

To build trust with your donors be transparent about where the money goes. Take the time to work out how every pound raised is divided between beneficiaries and the expenditure needed to raise more money and innovate to meet needs in the future. A simple pie chart with carefully chosen wording to illustrate your expenditure shows the value your charity brings to your cause and helps to convince an individual giver their donation is in safe hands.

Demonstrate impact

Thankfully a small but growing minority of grant-makers are offering unrestricted funds, for example Esmee Fairburn Foundation and Pears Foundation. What these philanthropic organisations have in common with your individual donors is the desire to see how their giving is a force for good.

Communicating your impact is an opportunity to engage supporters and donors in your work beyond the scope of a one off project or an aspect of your work. Give thought to the ripple effect of a donations. As well as sharing the lasting impact on the lives of the beneficiaries look inward and think about what difference the charity’s existence has made to the lives of your team or the wider economy to give a positive spin on payroll and overhead costs. Use clear and effective communication to bring home the value of your work and persuade donors to back your purpose. We’ve rounded up some of the best ways to effectively demonstrate your impact to funders here.

Once you can give your donors the confidence to trust that the money you receive is spent in wise and impactful ways, they’ll be more likely to allow you to decide exactly how to spend any further donations in future.

If you’re looking for any further support with encouraging unrestricted donations to your cause, get in touch with us and we’ll be happy to help.