Out of the Shadows

Staff blog by new Regional Grants Manager, Tessa Hibbert.

Recently I came across the concept of the charity world’s ‘shadow economy’ in an interesting article in the US Journal The Chronicle of Philanthropy.

In today’s funding world, where some funders still refuse to contribute towards core costs or insist on innovation, charity fundraisers are being pushed into dressing up organisational running costs.

Although improvements have been made, we know that funders typically limit their contribution to core costs at a certain percentage of a grant application. The specific amount varies from funder to funder and is rarely explicitly stated.

This leads to a situation where a charity will work with two budgets: an internal one which reflects the true organisational cost, and one prepared for a funder, which subtly shifts the emphasis.

There is a particular issue relating to the budget for managers and senior leaders. After all, who wants to fund the ‘bureaucrats’?

Having just joined the Blagrave Trust, I was really pleased to find the Trust increasingly making unrestricted grants. Blagrave recognises the value that skilled and professional staff with years of accumulated wisdom bring to programmes. Blagrave places a strong emphasis on monitoring and evaluation of impact, and an expectation that charities will include the costs associated with this in funding requests. Blagrave’s ambition is to add value to all partners through sharing of accumulated knowledge and expertise and there is a recognition of the costs associated with networking and with becoming a learning organisation.

Evaluating the impact of unrestricted grants remains a challenging area and one I am actively exploring along with our partners. But the bottom line is that, if we don’t see the true cost of an intervention we are funding, then our judgements about value for money are based on false data.

Of course it is essential that Blagrave’s funding contributes to outcomes for children and young people. But rather than keeping the true costs of this in the shadows I believe it’s essential to bring them out into the daylight. Then Blagrave – and other funders – can reflect on the cost and sustainability of true social change.


Tessa Hibbert is the Blagrave Trust’s Regional Grants Manager, supporting partners to monitor and evaluate their impact, collaborate, and learn from each other. She can be contacted here.

24th May 2016