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Funding, Fair Pay and the cost of living crisis

Back in July this year, social sector think tank New Philanthropy Capital published Confronting the cost of living crisis – how funders can mobilise, a report on the patterns and impacts that were already emerging from the escalating economic disaster – commonly referred to as a cost of living crisis –  that we see now. This authoritative report confirms what the sector knew would be true – that the worst affected communities and groups are: young people, people with disabilities, unpaid Carers, people who are homeless or at risk of homelessness, people who are refugees or seeking asylum, single parents, BAME communities, and older people. Largely the same groups disproportionately affected by, and still in recovery from, the pandemic.

As a funder with experience of work across all the groups above, we’ve been focused on how we can best ‘mobilise’. Some of our conclusions are sober echoes of pledges made during the strange period since the pandemic struck the UK, with some differences. Here’s an update.

 1. Fair pay. As summer gives way to autumn, and to a deepening crisis, the Real Living Wage (RLW) Foundation will be making its announcement of the new salary levels early this year – in September instead of the customary November, reflecting a renewed urgency. The RLW will not reach or benefit all of the groups above, but as a RLW accredited funder, we believe that funding charities to provide the RLW to their workforces is just one tool we can and should implement in our attempt to tackle the causes and consequences of poverty. With in-work poverty at the highest level today since records began, a pledge to help ensure people are paid fairly is a small but important commitment.

So this month, we’re reaffirming our commitment to help ensure the Voluntary, Community & Social Enterprise (VCSE) sector is paid a fair wage for the crucial work it does. Other funding organisations must do the same if this is to be achieved.

More precisely, wherever we fund salaries or other kinds of remuneration of staff time, we are explicit that we expect organisations to agree salaries at RLW levels, and have written this into our grant terms. In parallel, we commit to understanding the obstacles to doing so, and working with organisations to overcome these. Our goal is to support a sector in which the whole workforce is paid and employed fairly. 

2. Future-proofed budgets. In recent months we have been looking more critically at the budgets submitted to us to check whether or not adequate cost of living increases have been applied in future years’ budget allocations. Organisations may be asked to add an uplift to their projections where this has not been incorporated.

3. Flexibility. By offering core funding and flexibility across budget lines, we can help provide at least a temporary buffer where budgets are tight, ensuring that salaries aren’t left behind.

4. Giving more. We are aware that we can achieve more by simply giving more to certain areas of need, and where we have funding experience. We are committed to looking more closely at these in line with our goals and continuing to release more funds accordingly.

5. Supporting leaders. Back in 2020, we joined forces with Young Manchester and leadership & coaching expert Polly McAllester to develop a programme called LEAD+ to support and connect Manchester VCSE sector leaders at a time of crisis. We are delighted to be launching this again this month, offering two free programmes, which will run concurrently from October. Leaders of youth organisations working in the city of Manchester are encouraged to take a look and register interest in future programmes.

6. Shared resources. In partnership with Bruntwood, we continue to offer Funding Plus to all grantees and to respond holistically to requests for support, providing room hire, equipment, expertise, training & mentoring, or connections. This way we hope to fill some of the gaps organisations may have and thereby add value to our funding support. All grantees are encouraged to take a look at this and get in touch.

It seems certain that hardship will increase significantly for many over the coming months, layering crisis on top of pre-existing deficit and anxiety. As funders we believe that we must respond tangibly by using the assets available to us, and using them more effectively, moving from the conventional lens of philanthropy towards one more centred on immediate practical support – and justice.


Louise Magill

September 2022