Lloyds Bank Foundation has guaranteed half of its £11m in core funding will be ringfenced for charities led by Black, Asian, minority ethnic and disabled communities.
The move is part of efforts by the funder to focus on supporting small charities, with an annual income of £25,000 to £500,000, and to prioritise equity, diversity and inclusion in its funding awards.
Its five-year strategy states that the funder “acknowledges the barriers people face because of their gender, ethnicity, nationality, disability”.
It adds: “Because of their size and in-depth understanding of the communities they serve, these charities are best placed to reach, engage, and support people and where the Foundation's combination of unrestricted funding and capacity-building support will have the greatest impact.”
Of the funding, £2.75m is being reserved for Black, Asian and minority ethnic led communities, with the same amount earmarked for charities led by people with disabilities.
Flexible, unrestricted grants of £75,000 over three years are being made available.
Launching our new strategy, ‘Building #ABetterFuture’. Scroll down to read our key priorities and how we will continue to support #SmallButVital charities https://t.co/c3ZUxuGrSa 🧵
— Lloyds Bank Foundation (@LBFEW) October 3, 2022
"Small charities, who were on the frontline during the pandemic providing a lifeline for communities, now face rising costs, increased demand for support, insecure income and staff burnout,” said Lloyds Bank Foundation chief executive Paul Streets.
“Yet, small charities are best placed to create lasting change because of their size, unique understanding of the community they support, and ability to adapt.
"To ensure we use our resources effectively, we're focusing on small, local and specialist charities, where our combination of funding, support and resources will help charities thrive, communities grow stronger, and people overcome complex issues and barriers so they can transform their lives."
The Foundation says that a least a quarter of its core funding over the last two years has been allocated to charities led by and for Black, Asian and minority ethnic charities.
Among charities supported by the Foundation is Equality Action.
“Like many other charities and organisations, we get caught up in the delivery of day-to-day services needed by beneficiaries and overlook taking time to reflect on the organisation's internal workings,” said the charity’s executive officer Varsha Parmar.
“We know we need to strengthen our internal structures and review our long-term strategy, but charities do not have the funding to do this, as most funders only give restricted funding for specific projects.
“The funding from Lloyds has been a blessing for our charity with the two years unrestricted grant and the amazing consultancy support in kind.”
Further details around the funding application process will be announced by the Foundation in November.
Structural racism among funders
A report by the Ubele Initiative last year found that Black led charities are being made to feel “as though they aren’t deserving of funding” through structural racism in the funding sector.
Issues highlighted include diversity and inclusion efforts being confused with demonstrating anti-racism by funders.
There is also a lack of transparency about why unsuccessful funding applications are being turned down and the report criticised the “unequal power dynamic” between funders and black and minority led charities.
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