Government departments to make three year funding the norm for third sector organisations
Charities, voluntary groups and social enterprises all stand to benefit from new guidance published by the Government, ensuring every Whitehall department offers three year funding to third sector organisations in all but exceptional cases.
The guidance document, published jointly by the Office of the Third Sector (OTS) in the Cabinet Office and the Treasury, sends a clear message across Government that, where appropriate, funding for the third sector must be for a minimum of three years.
Throughout the next three years, departments will have to report their progress to the Minister for the Third Sector by the end of October, who will in turn report that progress to the Treasury and to Parliament as part of the annual review of the Compact.
Phil Hope, Minister for the Third Sector, said:
“We are determined to make three-year funding the norm not the exception for the third sector, and this guidance will help departments across government make our commitment a reality.
“Charities, voluntary groups and social enterprises play an increasingly important role in helping to deliver our public services, not least because of their ability to innovate and reach people that government cannot always reach. However, this ability can be hampered by short term funding and I am determined to help third sector organisations improve their financial stability and reach their full potential.”
This is the first in a series of concrete steps towards making three year funding the norm rather than the exception, and – with the reassurance they will not lose funding from one year to the next – aims to help third sector organisations to be:
- more sustainable – to engage in longer-term planning, borrowing and investment
- more innovative – with more time to develop and demonstrate the impact of new services and activities
- provide better value for money – reducing time spent on year-on-year fundraising, freeing up staff to concentrate on delivering long-term outcomes.
While the Government are keen to ensure three year funding is the norm, there are instances where shorter-term funding may be more appropriate, for instance if a department is funding one of events or for very specific pilot projects.
