Digital funding has changed. Learn about funders’ confidence, experience and expectations in 2024. #1 of 3 articles.
“Digital is no longer a shiny new thing. It has moved from the innovation space to being something that is more embedded in how nonprofits operate” - Funder J
This resource is for people working in nonprofits applying for funding for digital costs. It’s also useful for grant makers interested in learning about other funders’ views.
Note: this article mainly uses ‘funding for digital costs’ rather than ‘digital funding’. Read why we think this term is better.
How we wrote this article
This article is based on 7 interviews with people working for UK grantmakers. We ran interviews rather than doing surveys because interviews create more insights. They help us get under the skin of the issues we want to explore.
We talked to them about:
- The types of digital grants they’ve been making since February 2022.
- How they approach assessing bids for digital costs.
- Advice for organisations applying for funding that includes digital costs.
We include lots of quotes but we’ve anonymised all data.
About the people we interviewed
People’s roles included grants managers, funding officers, data & digital leads.
Their goals centred on:
- grantmaking aligned to organisational strategy
- building relationships with grantees.
Most described themselves as reasonably digitally savvy. Some had low confidence in using digital tools. Views on their organisation’s digital competence varied similarly. They also see their organisation's competence as increasing.
The volume of applications for digital costs has persisted since the pandemic
Only one funder said they thought applications for digital costs had dropped since Feb 2022. The others either didn't have accurate data or had seen them persist at the same level
“We see digital coming through some of our grants more” - Funder T
“It's hard for me to know how our funding digital has changed since the pandemic as we make 300 grants a year” - Funder P
“There has definitely been a shift towards realising the potential of doing digital.” - Funder Y
“We haven't seen a drop off in applications for digital costs. More organisations are offering hybrid services since the pandemic” - Funder J
Funders expect to fund digital through their broader grant making strategies
The time of niche digital innovation funds has ended. And funders no longer single out digital as a priority area.
Instead they recognise that it has become normal for organisations to operate online and use digital tools to deliver their work.
Instead they see it as normal to operate online and use digital tools. And they expect these costs to live in standard budgets, not as ‘innovation add-ons’.
They will fund all 3 types of digital costs as part of organisations’ core and project budgets. They want organisations to guide them on their digital needs and priorities.
They told us:
“We expect some degree of digital across all projects now.” - Funder J
“I have seen a move away from digital innovation towards integrated digital costs as part of bread and butter funding.” - Funder F
“Digital costs could fit into any of our existing themes but they aren’t a priority over other costs.” - Funder W
“A funder would now expect a new project to have digital costs included as every project these days tends to operate with at least some digital even if it’s not focused on it.” - Funder Y
“If they tell us that one of their needs or approaches includes an element of digital we are very open to listening to that.” - Funder X
Funders focus on outcomes over approach
Nothing has changed here! Just as they always have, funders want applications that align with their goals.
This means they care more how a project links to their goals than the methods used.
This includes digital and non-digital ways of working and delivering services. They trust applicants know what they need as long as it's clear how it will create impact.
They told us:
“We are agnostic in the real world. We will fund digital costs as long as the quality of the application is there around outcomes and fit to our strategy.” - Funder J
“We want to move to a more trust base. We will try and let people do what they think they need to do.” - Funder F
“We are thinking ‘is this project having an impact on beneficiaries’? And if that includes digital then that is fine.” - Funder P
“We trust grantees to spend money as they see fit. It could include any of the 3 types of digital costs as long as it's clearly going to benefit and improve their ability to achieve their outcomes.” - Funder X
“Just like if they told us they wanted to run a face-to-face service we would still want to understand their approach and plans. We are guided by them telling us what they need.” - Funder W
Some funders lack confidence in assessing digital applications
We know nonprofits lack confidence asking for funding for digital costs. See our work with Dot Project. But though all 7 funders see funding digital as normal, only 1 explains this in their guidelines.
This could be because funders themselves don't feel confident with digital costs requests. Often they find it harder assessing digital approaches than non-digital ones.
They told us:
“We are less confident in asking applicants questions about digital. We could be encouraging them to talk about it more because we want them to feel confident to tell us if that is something they need money for.” - Funder P
“Funders like us need to learn to fund digital - to be more confident and informed.” - Funder Y
“Our confidence and approach is shifting, but our guidelines were written more with face-to-face work in mind. Because of this an application from a project or service that is predominantly face to face is probably more likely to seem like a fit with our guidelines.” - Funder W
“Our funding managers are becoming more confident in assessing and handling digital costs as part of a grant” - Funder J
Organisations would benefit from reassurance about including digital costs in their applications. Funder guidelines and websites could provide this.
A couple of other mentions
- There is a slow trend towards funding more core and infrastructure costs. This includes digital infrastructure (e.g. CRMs, websites, staff digital skills training). Funders expect core applications to include these types of costs.
- Digital inclusion is still important. One spoke of the need for digital service applications to consider digital exclusion. They want these to show how they will reach digitally excluded people too. They said: “digital inclusion has become more of an issue for us as a funder and we look out for it in the case for need.”
Want more in-depth insight? Learn how funders approach assessing applications that include digital costs.
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: