Thinking about digital funding? Learn what processes funders use, what they look for and how their digital experience varies.
This resource is for people applying for funding for their non-profit’s digital costs. It is also for grant makers interested in learning about other funders’ approaches.
The article will be most relevant if you’re seeking funding for a hybrid or 100% ‘digital-first’ service. But many of its insights will also apply if you are seeking funding for core digital infrastructure for your organisation.
It is based on interviews with 7 people working for large UK grantmakers. It builds what we learnt about how they view digital funding in 2024.
Note: this article mainly uses the term ‘funding for digital costs’ rather than ‘digital funding’. Read why we think this term is better.
Recap: digital is normal now
In ‘How grantmakers view digital funding in 2024’ we learnt that funders now see digital costs and projects as normal parts of how charities do work. Because of this they no longer run digital funding programmes. Instead they expect you to include digital costs in applications to their regular programmes.
We also learnt that they:
- want to fund work that aligns with the aims, goals and outcomes of their programme/s
- are open and positive about digital as a way to achieve outcomes
- often find it harder to assess applications for digital costs than non-digital ones.
Here’s what we learnt about how they assess applications that include digital costs.
Funders use the same process for assessing applications for digital costs as other application types
No one we talked to uses a different process for assessing digital elements of funding bids. They all follow the same steps as other applications. Whether it's digital hardware, software, salaries or external costs the process is the same. They want to be equitable.
They told us:
“We have no specific practice, no systematic thing.” - Funder K
“We do a similar assessment process for what we would do with non-digital services.” - Funder O
“We don't have a specific process for digital costs. We don't have guidance on what is an acceptable amount to spend.” - Funder Z
“We would look at whether the project aligns with programme priorities. We would look to see how use of digital in the application fits with that priority.” - Funder D
“We have no particular practice around assessing digital costs in a bid.” - Funder R
“We don’t necessarily follow digital practice. It would depend on whose desk it lands on.” - Funder L
Funders’ skill at assessing digital costs and approaches varies
Funders’ confidence and assessment skills are inconsistent - both within and across organisations. They are aware of this.
The things they find hardest are:
- understanding why digital has been chosen as the approach
- understanding what good looks like
- gauging value for money.
Fortunately, their confidence is growing.
They told us:
“We want to have consistency across our team. We are grappling with how to do this.” - Funder R
“It is new to us and we are not yet as comfortable with digital as other bid aspects. It's very much a learning process.” - Funder Z
“Our funding managers are becoming more confident in assessing or handling digital costs as part of the grant.” - Funder J
“Assessors are less comfortable looking at budgets for digital costs than other things. It's hard for us to understand what is reasonable.” - Funder D
“Trying to assess against criteria but having a lack of understanding of digital as it's not our focus.” - Funder O
“I fear that we don't have the expertise compared to our experience in other sectors around cost of things and what a good intervention looks like.” - Funder K
- Clearly explain anything technical
- Show why your costs are value for money
- Reference good design practice
- Do all this in a way that someone with little knowledge might understand. Do your best with any word limits..
Funders look for ability and experience in a proposal
Funders want to be reassured that you know what you’re doing. They will look for reassurance in your organisation’s:
- digital expertise
- past experience
- knowledge of how to maintain digital services and core infrastructure.
They told us:
“We would do diligence checks, see what their website said about them and if it aligned with their digital request.” - Funder R
“We want to see your expertise and approach - in managing the project and managing sustainability beyond the project e.g. internal resources.” - Funder J
“Has the organisation got the capability to deliver the project? Digital design and delivery can be expensive and get complicated.” - Funder L
“One applicant explained how they were scoping and working with partners. And their various supports. That reassured us that they knew what they were doing.” - Funder O
Funders find larger digital costs harder to assess
We heard that smaller digital costs are easier to assess. But the higher a budget is, the lower their confidence in assessing if a cost is reasonable.
If there is a large technical or external cost then they may consult with an expert or simply not fund it.
They told us:
“The budget is key. Especially if digital is a large part of the application.” -Funder D
“Certain costs we may not know what the benchmarks are. You can say this about any cost. You need to do a little research on them.” - Funder O
“The biggest challenge has been looking at budgets and what is a reasonable cost - e.g. a website redesign for £10k vs one for £50k. It's often not clear what the difference is.” - Funder K
“Sometimes it's hard for us to break it down and understand if it's reasonable.” - Funder L
“If there is a heavy technical element then our assessors will consult with one of our digital team. They will assess if costs are reasonable and if the applicant has the know-how to deliver.” - Funder J
Funders look for research when assessing
Funders expect organisations to be able to back up what they say. This isn’t just about researching what beneficiaries say they want and need. Technical research can show that you’ve assessed what's technically possible and why your approach (and its cost) is a good use of digital.
They told us:
“Have you asked why you are using the digital element? Why is it the best way for your beneficiaries? Is how you are implementing it the best way for them?” - Funder J
“Ideally they will have done some user research with their beneficiary groups to understand their wants and needs.” - Funder D
“Generally our organisations have a good sense of their service users but sometimes we want to see more research.” - Funder O
“Does it feel to me as an assessor like a warranted use of digital?“ - Funder L
“How do they actually know technically if it is feasible?” - Funder K
“We also look at whether digital has become a part of engagement with marginalised communities.” - Funder R
Funders expect to see how digital fits into your theory of change
Funders want to understand how the way you use digital contributes to your impact. Even if you don’t have a formal theory of change you need to show this.
This applies even if you’re applying for funds to build internal capacity or strengthen organisational resilience. How will this enable change for your beneficiaries?
Funders told us:
“We want to understand how this will contribute to their outcomes. How it will make their work better.” - Funder K
“Is the use of digital going to have an impact on the overall project?” - Funder D
“We want to know how the digital element leads to the social change we are looking for.” - Funder Z
“Applications that are more ambiguous about the end result are harder to assess and fund. That has been a pattern.” - Funder J
“Success may look different from a traditional project. We want to understand where digital is helping you get to, and how.” - Funder O
Experienced funders are interested in how you will maintain your digital infrastructure
Two of those we talked to had significantly more experience of funding digital. They told us about their experience of seeing grantees fail to plan for future digital costs. They saw this at both service and organisation level.
Because of this they want applicants to show how they will sustain or maintain their digital work. Especially if there is a heavy technical investment at the beginning. They consider it a poor investment if the charity is unable to maintain this once the grant ends.
They told us:
“We want to see organisations understand and consider ongoing costs. Sometimes you see projects and applications to set up a site or chatbot and then the money ends. You see the budget should continue. Then it fizzles out or they ask for more funding. Then the impact of legacy is reduced.” - Funder J
“Often people's solution is to hire external support but if you are building a new digital service you have to maintain it. We want to see clear thinking about how they will do that e.g. internal staffing or new internal staffing. Or building relationships with organisations who can support an ongoing stream of work.” - Funder L
“There are many ways to plan for future maintenance and we are happy to see these. We just want them to show they understand this.” - Funder R
Unsure what you need funding for? Learn about the nine different things we mean by digital.
‘Digital funding’ is a fairly broad term. Read what we mean by digital funding.
There’s lots you can do to strengthen any application for digital costs. These articles will help you:
- Why you need to run a discovery phase before making any application
- 9 ways to make your organisation more attractive to funders
Want to understand your core digital costs and budget better? Dot Project’s series of 3 articles will help you:
- How to understand your current digital costs
- How to budget for future digital costs
- How to integrate digital costs into your operating budget
And look out for our next article on 21 February that shares advice from funders on applying for funding that includes digital costs.