Signs of difficulty have been on the rise since Bond’s March financial statement warned about “volatility” in its funding streams. A key grant from DFID, that currently funds just under one-third of the organization’s budget, is set to run out this month, and it’s unclear if it will be replaced or in what amount.
While the Bond officials admitted to Devex that the organization’s funding position is not secure, they said this was the “new normal” of the U.K. charitable sector, and Bond would still exist, perhaps operating in a different form.
Global development professionals looked on with concern as the organization reduced staff by about 25 percent earlier this year. One development charity worker, who wished to remain anonymous, told Devex Bond employees were resigning from the organization “like rats abandoning a sinking ship”.
The 475-member charity stated in its March financial statement that it is “increasingly exposed to more volatility and uncertainty in its income streams.” In particular, it highlighted that not receiving funding from DfID beyond 2016 posed “the most critical risk” to its future.
“Bond has developed outline contingency plans, which would require further significant reduction in costs and in the strategic scope of its work going forward,” said the report.
“We plan to review the outlook for DfID funding in middle [2016/17] and take appropriate action in order to ensure the cost of Bond’s work are in line with expected income levels.”
“The new normal for charities, apart from a lucky few, is you’re only ever six months or a year away from a funding gap. … We’d love to have permanent, stable funding, but I think that’s a bit of a pipe dream.”— Michael Wright, Bond director of membership and communications
In recent years, a DfID strategic grant has made up just under a third of its overall funding, varying depending on other income sources. Slightly over 50 percent of its income is generated by membership fees, conference event tickets and recruitment advertising. Other recent donors include the European Commission and the Bill & Melinda Gates foundation.
Bond Director of Effectiveness and Learning Sarah Mistry told Devex the organization is currently discussing future funding with DfID worth up to 750,000 pounds ($947,000) over six months. Its current strategic grant runs out this month. This funding was issued in May 2013 and was worth almost 3.5 million pounds. It was due to end in March 2016, but DfID extended the funding for Bond to continue its work on the Sustainable Development Goals.
DfID’s recently published Civil Society Partnership Review made it clear the department plans to follow through on its pledge to end unrestricted core funding in favor of grants targeted at specific, outcome-led projects. As a result, Bond will use the short-term pot of money it hopes DfID will confirm in early December to support NGOs transitioning to the funding channels outlined in the CSPR.
Mistry said the DfID money would help Bond “restabilize” and help the organization replenish its low reserves. At the end of the last financial year, Bond recorded a deficit of 151,000 pounds of unrestricted funds and lower-than-target-level reserves. She added: “We’re keen for further long-term strategic funding from DfID and we think it’s in the interests of the sector because Bond provides a useful role for both parties.”
Bond Director of Membership and Communications Michael Wright said despite the alarming wording of Bond’s financial report, Bond’s position was not unusual in the current funding climate. “The new normal for charities, apart from a lucky few, is you’re only ever six months or a year away from a funding gap,” he said. “We’d love to have permanent, stable funding, but I think that’s a bit of a pipe dream.”
He continued that Bond would operate into the future with or without further DfID funding. “Bond would still exist and would still deliver services to members in a significant way,” he said. “The focus of our work might be different, but we would still be there working to support our member’s missions.”
What might a future Bond look like?
If Bond is unable to secure large-scale funding from DfID, Mistry said one way the organization will recoup funds is to cease offering services that are currently free to members. These include convening members to share learning on specific areas of practice. “We would have to move towards a more paid services model,” she said.
Bond would also be more likely to forge partnerships with corporations. It is already working with cash transfer company Western Union on a project to help executives there understand the international nongovernmental organization market it serves. According to Wright, Bond is also in discussion with accountancy, legal and governance company, Crowe Clark Whitehill, to see if it could partner with them to provide services around governance.
Wright told Devex some partnerships would be based on receiving goods in kind rather than financial income. “A lot of the time no money changes hands, but we’re able to deliver a service and expertise into the sector which we otherwise wouldn’t have been able to afford,” he said.
Bond may also see further staff cuts, as its March financial report suggested. In 2016, Bond reduced its headcount from 44 to 34. Wright said Bond did not shut down any particular part of its service but reduced capacity across the organization.
“In certain areas, even if DfID doesn’t fund us in that area again, there are other prospects for funding,” he said. “That’s why it’s important not to close down a particular area of activity, but to maintain it as much as we can.”
Among the recent staffing changes, Bond also bid farewell to Ben Jackson, its long-time CEO, and is in the process of filling the role.*
A development organization leader, who spoke to Devex off the record after being asked not to comment publicly on the issue, expressed concern about whether Bond would be able to maintain its significance in the fast-changing U.K. development climate. “Seismic changes in the nature of development and in particular, the sidelining of INGOs under the current U.K. government, suggest the new CEO is going to have to reinvent the organization from scratch if it is to stay relevant,” he said.
Mistry said Bond was keeping abreast of changes in the political and policy operating environment, which is one of the organization’s key functions. She said Bond would provide support for its members as they meet future challenges.
For example, Bond’s current six month funding proposal to DfID includes a project to help INGOs prepare for Britain’s exit from the European Union. She said Bond would also be helping organizations prepare for other expected changes in practice, such as delivering services as contractors and applying for funding as part of consortia.
Wright said Bond had a role to play in helping DfID and the development sector realize the ambitions outlined in the CSPR. “It’s vast, it’s a rough framework sketched in, there’s not a huge amount of detail,” he said of the review. “We’re perfectly positioned to do that.”
In meetings held after the review’s announcement, he continued, DfID officials said they could not haven done the review without Bond.
DfID confirmed to Devex that it is currently in discussion with Bond about its future funding and would announce details about grants in early December. Bond is due to announce who will become its new CEO in February 2017.
Molly Anders contributed reporting to this article.
* Update, Dec. 5, 2016: This article has been updated to clarify that former CEO Ben Jackson has left Bond.