Blog: offering funding choices to grantees

Choice: we all want more of it, whether at the supermarket or when trying to arrange a convenient appointment at the GP's surgery. And as a funder, we were keen to provide choice for the grantees of our empty homes programme. Therefore, we let them decide whether they wanted to apply to us for a grant (of which we have many years' experience) or a programme related investment (of which we have much more limited experience!).

Programme-related investments are by no means suitable for all charitable organisations. By offering this choice, our intention was that we would provide an opportunity for some organisations to become more resilient and self-sufficient. In addition, uptake of programme related investments will make our future funding capacity more sustainable.

Interestingly, rather than choosing one or the other, the Highlands Small Communities Housing Trust (HSCHT) requested a hybrid funding of part-grant, part-programme related investment. After being approved for funding, HSCHT worked with us to negotiate a mutually agreeable set of terms and conditions. Our board initially had some reservations about the length of the programme related investment, which was 21 years. We asked HSCHT whether this could be shortened, but as we jointly explored this option it became apparent that it would be incompatible with our aim of helping bring empty homes into use. By reducing this time scale significantly, HSCHT would've needed to get a commercial loan, therefore compromising its ability to cost-effectively transform the properties. Following these negotiations, we offered HSCHT a combination of grant (50,000) and social investment (70,000) to bring back into use two rural empty homes.

This exercise of scoping out alternatives, but eventually reverting to the original plan, proved worthwhile as it enabled us to more fully appreciate the wider implications of reducing the term of the programme related investment. HSCHT, for its part, was pleased to be in dialogue with a funder which was open-minded enough to look at options, yet flexible enough to not make dictatorial decisions.

We are keen to do more programme related investments with other charitable organisations and we don't want to be overly risk-averse, therefore missing opportunities to really make a difference. As a result of working with HSCHT, we now have more confidence in our own judgement that longer term programme related investments do not pose a threat to us.

In the meantime, HSCHT has begun the renovation of the first empty property which will then be rented at an affordable rate to a local, low income family. This is a robust community-focussed project and it has received interest from Margaret Burgess, Scottish Housing Minister. Our relationship with HSCHT is working well, with monitoring visits being made regularly to see work in progress and receive updates. We look forward to the completion and tenanting of the two empty properties, while maintaining a connection with HSCHT for the next two decades.

Lorna Mackie
Programme manager - Empty Homes
The Nationwide Foundation
November 2014

This blog first appeared on on 6 November 2014.

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