Some of our services :
Business Consultancy
Tailor Made Training
Training Courses

 

 

Why Bids Fail

Pathways 21 conducted this snap survey in April and May 2010 on behalf of its clients in order to capture the views of funding agency programme managers. The primary purpose of the research was to give applicants some insight into the opinions of funders and what they want from bids. An 18 question online survey was used as the primary research tool for this project, and the source for the figures/charts shown in this report. Clearly the opportunity for longitudinal research should be supported.

A range of funders from both charity and public sectors took part and of key interest to observers, will be the similarities in their responses. It should also be noted that non -public procurement including trusts are not regulated by OGC and the EU in the same way as public bodies, and therefore a broader range of systems and processes are utilised.[i]

210 Funders were contacted via email and telephone and asked to respond.

The response rate was 7.6%.

Funders were chosen that;

·         Gave grants to groups rather than individuals;

·         Of a value greater than £1,000; gave funding on either a nationwide or London area basis;

·         Funded community/social projects

Local Authority, Charities, Trusts were all contacted, the ‘rule of thumb’ being that if funding could be bid for through a formal process and the bids would be reviewed and judged by a set of stated criteria.

As the research was carried out primarily to benefit our clients who are based in the London area, we contacted funders who only funded nationwide or London only projects.

There is no standardised procedure for the level or detail of response for failed bids, and this lack of standardisation can cause confusion between bidders and funders.

The Charities Commission does not undertake monitoring of how trusts and charities distribute money, and take a reactive ‘hands off’ approach, only investigating when there is a specific complaint made.

The current financial difficulties faced by the country have also created uncertainty amongst applicants as to the level of funds available, and what is needed to secure them.

Therefore, in a climate of increased competition with contractors fighting for smaller contracts bound by tighter criteria, better intelligence on access to funds can prove a significant advantage.

The research was intended to form

·         a ‘snapshot’ of current funding conditions,

·         how the economic downturn has affected funding organisations and their decision making process, and

·         what are the broad reasons for bids failing.

Questions raised were as follows;

“How has the current economic climate affected your funding levels?”

Initially the results seem somewhat positive – 75% say that their funding levels have not been affected, however with many organisations receiving public money that may soon change as predicted spending cuts arise. Another factor to bear in mind is that of ‘standstill’ budgets. That levels have not decreased does not mean that they will grow, and with the effects of inflation in real terms the same money will be achieving less.

“Has that affected your preference for larger/smaller contracts?”

For the large majority (80%) of our respondents there has been no change in preferring one over the other. Some organisations do not deal with contracts so the question would have been irrelevant.

“How has that affected how you review applications and tenders?”

62.5% of our respondents answered this question and all who did said that this has not. Reading between the lines as it were, we can see that although actual procedures for review may not change how they are applied and the room for leeway over small matters may alter. Funders may not be looking for the ‘perfect’ bid, but they may have to justify their spending decisions to greater standards of accountability.

“What are the main reasons for a bid being refused?”

Here we see more balanced results but the dominant theme is that of unsuitability or ‘ineligibility.’

66.7% of respondents cited ineligibility, lack of capacity and poorly written tenders as joint most important concerns.

Respondents who added optional comments stated –

Failure to demonstrate evidence of need for project/ service, without an appropriate quality standard, poor preparation of budgets/costing service, governance arrangements not sufficiently robust.’

‘Projects make up new projects and hope they will receive funding when they need core funding.’

Although issues of track records and lack of experience were important,(cited by 40% of respondents as being a major concern) they were secondary to concerns amongst funders that bidders were applying for funds in a haphazard manner. Although there may be some appeal in the concept that ‘any funds will do’, applying for funds for projects that do not suit the organisation or are seen as superfluous seems not to be viable.

Judging by these results it seems that bidders would be better placed making a well thought out application for funding that they can deliver on, and making issues of track record and prior experience secondary.

“What are the most important factors for you in deciding whether a bid succeeds or not?”

The reverse of the previous question showed a strong preference (85.7%) for capacity to deliver; cost and track record were important, but still secondary, being 57% and 63% respectively. Well- written bids were not expressed as a major factor for being funded with only 35% citing this as important.

Confidence in the bidding organisation to deliver was given the highest importance to funders. If the trend in government of entrusting more delivery of services by third sector organisations continues, issues of capacity and confidence in delivery will become ever more important. Organisations that are currently viewed by funders as having the capacity to deliver over their rivals may well reap the rewards.

What is the approximate current ratio between successful and unsuccessful applications?

A clear majority here for a ratio of 1 in 4, as opposed to 1 in 10 or 1 in 2. This ratio seems balanced and perhaps indicated that there are not a vast amount of bids in the first place, and that those who do so have a realistic chance of winning funding. Factors that may push the ratio higher in future could be; reduced finances means less funding so more competition, a reduction in the number of funded projects results in more competition, reduced finances means criteria for funding become tighter.

What is the current approximate percentage of ineligible applications?

The intervals we gave our respondents were quite broad, a compromise we had to make with the relatively short time scale of the research. However we can see that most respondents said the percentage of ineligible applications were in the 0 – 20% range. There were few who said 60% of their received applications were ineligible.

A study by the Directory of Social Change on ineligible applications found that of the 2,500 biggest grant giving trusts in the UK -

‘.....983,753 applications were made.

Trusts received 361,149 ineligible applications

(36%).

Trusts made 316,762 awards’

Source –

‘Ineligible Applications – The wasted work of the Voluntary Sector, DSC 2010’

What sectors does your moderation/appraisal system cover?

Nearly all our funders (73%) provided moderation or second level appraisal to the third sector or all sector.

Do you have an appeals process?

The vast majority of our respondents (81%) do not have an appeals process.

Do you have a complaints process?

66% of respondents did have a complaints process. This discrepancy can perhaps be understood by the fact that public funders must have complaints policies in place.

What capacity building support do you offer unsuccessful applicants?

Unsuccessful applicants were offered mostly feedback on various levels with local CVS being a preferred outlet of advice to failed third sector applicants. Although there were some positive exceptions, most capacity building seemed to relate to preparing tenders and bids.

How many previously unfunded organisations did you support in your last round?

There was a divergence in results with around half saying that they had funded none, with the others giving a range of figures.

. Have you increased the number of years funding available for each project?

The majority of our funders (62.5%) had no change in the number of years with 3-4 years being a common figure given by respondents. There had also been a small increase in the number of funding years for a few agencies. If finances are hit hard, funders may show a preference for longer funding timescales with charities they trust, and have proven their capacity to deliver. However, there is no evidence here that funding agencies have extended their funding time span and continue to be risk averse in this area.

Do you provide up front payments to ensure projects can start with positive cash flow?

The vast majority (87.5%) of our respondents do provide up front payments. For the time being, funders seem confident to allocate advance payments.  By this stage however, funders will have looked for and found, capacity for delivery and have formed enough confidence in bidders to deliver positive outcomes.

What feedback to you gives to unsuccessful applicants?

There was a clear preference for email and /or telephone feedback. Funders seem to want to provide, if not the bare minimum, then at least an option to have more information upon request. A face to face meeting was the joint least favourite with email only. Funders seem to want to satisfy queries so as not to alienate bidders, but seemed cautious of ‘escalating’ feedback into a drawn out procedure. A correlation can be seen with the number of funders who have a complaints process compared with those who have an appeals process.

What training do you directly or indirectly provide to applicants to ensure strong applications?

Funders seemed to offer little training to applicants, and what was offered often seemed to be delivered through consultants and third parties. Day or half day workshops were offered by some local authority funders, as well as meetings prior to applications. It was not possible to assess positive outcomes for bidders attending workshops and meetings, but there was little evidence of quantity or dedicated capacity building programmes.

Do you think organisations learn from their mistakes, or do you see the same mistakes being made repeatedly?

64% of respondents replied negatively. One respondent replied –

“Some groups submit the same application several years running but usually eventually either stop or improve.”

The phrase ‘stop or improve’ gives a strong warning to funders, that if the quality of applications does not improve then eventually there will be no organisation to submit them. Issues also arise, judging by the strong preference expressed by funders to have confidence in bidder’s capacity to deliver and suitability for funds, of the effect of repeated ineligible bids on the perception by funders of bidders.

‘We rarely consider repeat applications’

If you could give one piece of advice to organisations who present bids to you to improve their chances, what would it be?

Nearly all of the respondents emphasised the need for communication between funder and bidder at the initial planning stages.

 ‘Only submit tenders for services that you are able to demonstrate effectively at all stages of the process that you can deliver proactively, innovatively and in accordance with the Specification.’

‘Read our guidelines and past funding history on the website carefully and dont bother putting in the work unless you believe you have a good fit!’

 

 

Conclusion

Funders and bidders alike would agree on the need for suitable bids to be put forward for appropriate funding. On both sides, there is no desire to waste precious time and resources on applications that have little or no chance of being funded.  Bidders need funds in order to survive, and funders need to grant funds to meet their outcomes. The relationship needs to be more symbiotic instead of the cliché of going ‘cap in hand’ to the fund holder. With the implementation of government policy to outsource services to be delivered by third sector organisations and SMEs, the relationship will have to become more transparent in order for services to be successfully delivered.

What then, can applicants do to improve their chances of gaining funding?

A theme that emerged throughout the research was the importance funders put on bidder’s capacity to deliver projects contrasted with their reluctance to provide significant capacity building support. Foundations have no requirements to provide capacity building, but with funders whose money comes from the government, and whose projects are expected to be carried out by the third sector as an alternative to direct public services, this is more problematic.

As it is unclear at present whether more resources or emphasis on providing capacity building to the Third sector will arise from the new government, it falls on bidders themselves to ensure they are fit for purpose.

Bidders must resist the temptation to apply for as much funding as they can, or to tailor a need where there is none, and concentrate on well prepared bids for funding that they can provide evidence of successful delivery.

There is also a discrepancy between what funders view as suitable feedback and support and what bidders perceive as their rights. Applications will  improve if bidders receive clear feedback and access to decisions made by funders, and although many do provide this, more needs to be done, and accessibility to the decision making process needs to be standardised.

 



[i][i]http://www.freshfields.com/publications/pdfs/2006/14533.pdf

 

Pathways 21,

Suite 45, Veridion Way,

Thames Innovation Centre,

Erith, Kent

DA18 4AL