Senior Researcher Kalli Jayasuriya shares her expert advice on how to decode funding jargon
Funders often use technical terminology. As the researchers behind Funds Online, we review hundreds of funders each month and have developed a strong grasp of funding lexicon, but we still come across terms that catch us out. That’s why we’ve created a short glossary, exploring the different types of funding offered by funders, to help fundraisers cut through the jargon.
Capacity building funding
This includes In-kind support (see below), grants, loans or pro bono services to increase an organisation’s ability to deliver services and achieve its mission. Esmée Fairbairn has a funding scheme that offers funding to charities to help them access consultancy services.
Capital costs funding
This typically includes grants towards material goods/items, such as equipment and building/refurbishment costs. For example, the National Churches Trust contributes towards repair costs of churches, chapels and cathedrals.
Commercially-led support
This is a term you will find looking at our Companies entries on Funds Online. It describes charitable support, such as sponsorship or the donation of a percentage of total sales, that is directly offered by a company. For example, Alpkit Ltd distributes 1% of its sales to its corporate foundation (Alpkit Foundation).
Core/revenue funding
This is funding that goes towards a charity’s general costs of operating (otherwise called core costs). Such grants may help with the cost of bills, rent or salaries. A funder that offers this type of funding is the Garfield Weston Foundation.
Employee-led support
Again, this is a term that we use for Companies entries where applicable. It describes charitable support, like fundraising, volunteering or payroll-giving, that is directly offered by employees of a company. For example, EDF Energy Holdings Ltd runs a volunteering programme that allows staff to use two days’ paid leave each year to support local community and environmental projects.
General charitable purposes
This term is one of several categories listed in the Charities Act 2011 that identify what the trust is set up to achieve. Some trust funders list specific objectives, like “The advancement of health or the saving of lives”. Others use ‘General charitable purposes” to cover a broad range of objectives and to allow for a degree of discretion.
In-kind support
In-kind support refers to funders offering direct and essential support besides money. It often comes in three types: goods (e.g. equipment/materials needed for a project), services (e.g. transportation), and people (e.g. labour required for a project). In Kind Direct distributes donated products to charitable organisations, saving them money.
Match funding
This term is most commonly used to describe situations where a funder (particularly a corporate funder, or sometimes a statutory body) increases the value of donations by matching contributions. For example, The Morrisons Foundation will double a colleague’s £100 donation to a charity. The term can also refer to funding arrangements where applicants are expected to secure partial funding from other sources, as the funder does not cover the full cost of a project or activity.
Permanent endowment
This does not refer to a type of funding. Instead, a permanent endowment is assets (cash, investments, land, buildings) that allow a charity to generate income to distribute. These assets are intended to be held by the charity forever, though sometimes there are conditions that allow the permanent endowment to be spent, sold or transferred.
In 2023 Lankelly Chase announced its decision to wind down and redistribute its assets, worth £134 million, to charities that are working to tackle social injustice, such as the Baobab Foundation. For further information about permanent endowments, visit gov.uk.
Project funding
Whilst core/revenue funding can be applied generally across a charity to cover its operating costs, project funding is destined for specific activities/initiatives. For example, the Arts Council offers project funding through its National Lottery Project Grants scheme to fund arts, libraries and museums projects.
Retrospective funding
Most funders may explicitly state that they do not offer retrospective funding. In other words, they do not fund costs that have already been incurred or projects that have already taken place.
Social investment
Unlike grant funding, this form of financial support is fully or partly repayable. There are several types of social investment. The first is borrowing, otherwise known as loans, which often charge interest though they can sometimes be offered to charities?at low rates?or interest-free.
The second is?quasi-equity,?which is a form of social investment for organisations like charities which legally can’t issue shares because they can’t be owned for private benefit. It describes a financial arrangement where loan repayments might, for example, begin or increase once the investment starts to increase the organisation’s income.
It’s also possible to source blended finance, a combination of repayable support and grants. For more information about social investment, check out Good Finance.
Statutory funding
This refers to funding (in the form of either grants or contracts) provided by government bodies at both local, regional and national levels. Check out Jay Kennedy’s article about the importance of local authority grant-making, drawing upon data from DSC’s Grants for Good report.
Support costs
In charities’ accounts, support costs are listed to represent costs that a charity generates from operating. Normally, they include rent, insurance and other bills. These costs are not directly related to providing services or delivering projects. In this sense, support costs are similar to core costs.
Unrestricted funding
This is funding that an organisation can use as it wishes, provided that it’s within its charitable aims. Check out the William Grant Foundation to see how this foundation defines restricted vs unrestricted funding.
Unsolicited applications
This refers to applications for grants that are submitted without direct invitation from the funder. As you may have seen when browsing Funds Online, there are some funders that do not accept unsolicited applications, as they may either proactively select their beneficiaries or directly invite charities to apply.
In such cases, fundraisers may need to figure out how to get the attention of the funder in other ways, for example by networking.
Using Funds Online
We hope this glossary is a handy tool to use when searching on Funds Online or conducting your own funding searches elsewhere. You can filter by various elements, from funding types to charitable purpose. Our filter tools on Funds Online narrow down your search and find funders that you need. Where the information is available, Funds Online outlines which types of funding and exclusions apply to each funder. These features help you find the right funding fast.
If you want to learn more about how to boost your chances of success when applying for support for your charity, DSC’s training team also offer courses on writing applications!