Managing community funds

Funding policy 

If you have a fund for distribution, it is important that you have clear policies to guide your decisions. You may have to assess and make selection decisions on proposals from third parties or identify and defend the decisions for activities you are carrying out yourself. In addition, a robust funding policy can help manage the expectations of your community, ensure you don’t lose sight of what you want to achieve and help avoid future conflict over funding decisions.

If it does not already exist, a good first step is to draft or update a Community Development Plan (CDP)

What else to consider

In addition to the main development priorities of your community, your funding policy, setting out specifications, such as ethical requirements or technical and geographical restrictions that you want to put on the fund is essential. As a general rule, it is worth including reference to the need for funding to be aligned with the wider aims and objectives of your community organisation.

A good CDP will be able to inform funding policy on how monies will be spent, e.g. acquiring assets, renewable energy, the young, the elderly, employment and training. The policies can also define any eligibility and  assessment criteria, and assist the application and selection process for your fund.

You might want to consider:

  • who will distribute the money
  • who will be eligible to apply for funding
  • what you will fund
  • what you will not fund
  • any minimum and maximum funding limit
  • match funding requirements
  • whether to give a larger number of small awards or a small number of large awards
  • any ethical considerations/restrictions
  • your terms and conditions
  • will the funding be as grant, loan, equity or a combination of these

It’s good practice to relate your plan to other local and national strategies but look out for duplication of effort especially statutory obligations.

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