DiNN CEO addresses Cost of Living Crisis and how Black-led CSEs are affected
We recently released our report on the cost of living crisis, A Desert without Resources, thanks to the kind CSEs who responded to our survey in April. The report is a sobering look at the current sentiments held by UK-based Black-led charities and social enterprises (CSEs) and the projections for coping with the crisis.
The funding sector needs to change and CSEs need to be included in the process. Part of this process includes coming together and building clear proactive measures to own our power. DiNN CEO and founder, Bayo Adelaja, recently spoke at an online fireside chat about the current crisis. The talk did not shy away from difficult topics and leaned into the urgency for change.
The below excerpts have been slightly edited from the interview to ease reading experience, but you will still experience the raw, spoken style. We hope it gives clarity, inspires, and that you share it with your networks.
Can you speak to the relationship between different CSEs where there's a lot of overlap and competition for funding. How they support each other and how they potentially don't support each other.
Bayo Adelaja: We’re working with Black-led organisations, experience-led organisations, as well as very small grassroots organisations that are in need of particular support because of the lack of resources in their local area or lack of infrastructure support. At first, I was told that these organisations are in a system that has been described to me as cannibalistic, and at the time it didn't immediately resonate with me, but as time has gone on, I've recognized that there is a deep lack of trust and engagement within the funding sector. Funders are trying to protect their impact focus, and as a result of that there is an increased scarcity mindset and heightened competition between Black-led organisations.
So you'll find that a funder might suggest or encourage partnerships and collaborations, but that is being done in an environment where there is no time, so there's no opportunity to have the space to form authentic collaboration. What you then find is organisations that are in a scarcity mindset, highly competitive with each other, doing very, very similar work, forcing themselves into relationships, where they're having to work together in order to satisfy a mandate that has been drawn out by a funder with good intentions. They are then put in this position where there is likely an inequitable partnership between the two organisations. You might have one that is over-delivering versus under-delivering, often one will be essentially taking a lot of money for doing very little work and receiving a lot of the benefit of organisational development and therefore be more sustainable despite not having the actual expertise within their own organisation to carry out the work going forward.
Organisations that are led by well-meaning people and funders who are also well meaning, are forced to build these systems that alienate organisations from each other. And when you compound that with the fact that we're constantly asking local organisations to compete at a national level, kind of like asking a local street basketball player to compete in the NBA or a local, happy-go-lucky runner to run in the Olympics. To me, it's the same level of competition that we're fostering. I did the maths the other day, and it's genuinely about four times more difficult to get funding in this sector than it is to get into Cambridge or Oxford University.
That's what we're putting people up against on a daily basis, and we're expecting them to thrive in it, where it's just not possible. So, when we talk about the scarcity mindset, or we talk about competition, or we talk about challenges, the system itself fosters that and thrives on it. I don't believe there are any individuals within this sector that think it's working. But we also don't know how to change it, and I'm finding that it is becoming untenable, particularly in the context of the cost of living crisis. It is showing a deep lack of trust with the funding sector. That's incredibly unfortunate because all of us got into this because we wanted to make a better world and a better society. We wanted to feed into a happier community, a safer community, a more mentally well community. But then when you think about what is actually happening to leaders of these organisations, leadership teams, staff, we’re essentially creating this idea that any organisation is replaceable and because of that, no organisation can stand the test of time. We end up in a space where newness is valued, because we don't really expect any organisations to last beyond five years. And if they do, we then start making it rather difficult for them to keep going because most funders can't fund you over a certain amount of money. Revenue-wise or if you've been around that long, there are heightened expectations of your ability to raise your own money and fend for yourself.
I have a follow-up question to that which I guess is the inverse: is there anything that you can say about the concept of radical support across the sector or within certain areas of the sector?
BA: The challenge that you see on a day-to-day basis is that because there is a lack of trust, because there is a lack of understanding and value around proof of concept, as well as impact not being the thing that is actually moving an organisation forward, it's more about innovation and newness in the sector. It feels like going back to that point about cannibalism, like this cycling in and out of organisations and the ones that have proof of concept being less important than the ones that are newer. It means that what you're being supported to do is not as valued as your ability to do it in a new and innovative way. You're never really allowed to learn from what you've done. You're only allowed to grow or change, and growth and change are good things when you can base it off of the background of what you've done in the past. So, for me radical support looks like a need to have a real respect and validation for what has worked and providing support for the organisation that has created that, then to ensure that it can keep that thing working.
There is a gap, I found, that happens between £150,000 to £350,000 as revenue and then it happens again between the £500,000 and £2 million where funders expect you to make that jump on your own. And I say on your own because existing mechanisms like social investment, like asset grabs, they're so rare and difficult to achieve that it becomes almost impossible. Therefore, we're putting ourselves back in that cycle of having to prove that we are already something that we can't be without support.
How do we see DiNN’s vision and mission encompassing the current cost of living crisis? And how can we extend our capacity?
BA: Extending capacity is an impossible conversation in the context that we're in. If you look at the report: roughly two-thirds of organisations are seeing themselves likely to close within the next six months. And that's not unique to Black-led organisations. That's something that's happening across the entire sector. In the same vein, 70% of grant funders are on some level of strategic review or pause on their funding programmes, and it's particularly true of endowed funds, which I find so interesting, that endowed funds are stopping their funding in the middle of a crisis because they feel they've spent too much of their endowment. Which is an interesting conversation that should be had with the Government as to whether or not we adopt something along the lines of the American model where endowed funds have to spend at least a certain percentage of their endowment every year. I don't know if that's sensible or not.
The only cause for action at this point is retrenchment and that's a horrible thought, and at this time, because of the incredible increase in demand for support. Organisations are having to get smaller and the only way to expand and meet demand is to digitise significantly. The challenge with digitization is that the belief in its impact is lower than in-person work. We're looking at much smaller organisations or organisations becoming non-existent. We're looking at organisations, and more generally the Black community needing a lot more support, because the people that are most likely hit will be our Global Majority communities in terms of loss of jobs, heightened bills, living in overcrowded, highly expensive metropolitan areas across the country, and heightened lack of autonomy which affects mental health because you don't have a lot of options available to you, so you become more stressed, become more depressed, more anxious.
Lack of support to address those things in real time, means we likely won't be back to normal levels - normal being 2019 levels - until 2025/26. What we'll see over the next few years is a stripping away of the safeguards that individuals have concerned themselves to develop over time because we're not seeing funders show up in the way that we need them to at this time. Going back to the thoughts around radical support, in one case, an organisation was asking for emergency money from a funder, the funder did not recognise the level of the emergency, and did not accept it on the basis of what the organisation was saying. Another situation that comes to mind is an organisation being asked to prove financial stability in the context of asking for core funding on the basis of not being financially sustainable. It's this almost chicken and egg thing that's happening where I believe, truly, the funding sector is desperately letting down the charity sector and social enterprises right now.
What I fear deeply is that COVID opened up a big door, and it meant that so many organisations, particularly in our community, became registered because they wanted to engage with the funding sector. And so many good things happened, and so many good things are still happening, but the scale of them is incredibly small compared to the need. And again, just contextualising that with the significant difficulty that people haven't been receiving any level of funding to do any work that they’re doing. It's almost like the sector is fine with seeing these organisations close on the belief that there will be so many more that come up on the back of their closure. And that's the feeling, that's the deep mistrust that is happening. And we had this great opportunity when COVID happened to change and to really embrace the needs of smaller organisations, and to really open those doors and ensure their survival. But it feels like we kind of decided that that was enough. The Government has not stepped up in the same way that it did with COVID when it comes to charities and social enterprises. Yes, there's the £100 million the Government has released, but if you consider £100 million is about a quarter of what the National Lottery gives to London every year, it's really not a lot of money. Like I say: good things are happening, but it's not nearly where it should be.
And at the moment, if we're saying it's four times more difficult to get funding as a charity or social enterprise than it is to get into Oxford. What are we going to say in two years? It's 10 times more difficult? It's 20 times more difficult? And are we okay with that? I think what's likely going to happen is we're going to see a lot of incredible human beings that are doing some fantastic work, decide that they just weren't meant to do it, or this isn't the right place for them. That's where I was many years ago. I had given up on the grant funding space completely, because I just thought, oh, they don't get us, they're not going to be supportive of us. So I was going to have a corporate job and do some things here and there on the side and live my life and thankfully, one funder came through and that was enough to keep me going. I think it was £15,000 and that was the only grant funding I got for the first four years of running Do it Now Now as a community project and I was giving between £14,000 to £20,000 of my own money to run it every year. I was making £32,000 a year at the time, so only God knows how I did that.
We’re here now, but exceptionalism isn't the rule. We're one story out of genuinely 1000s upon 1000s and we're dealing with all of the challenges that they're dealing with just on a different scale and with different parameters. My fear is that great people who want to do something are just going to be completely discouraged. We'll find that the diversity that was hard won, over the past couple of years, will be completely lost. I don't think we'll have another opportunity until a completely new generation comes in and doesn't know what this generation has gone through. They’ll put their faith in funders with a hope that there'll be another crisis and then it will probably just happen like this again, and probably has happened before, but I wasn't there so I don't know. It's a really bad outlook at the moment, I'm not going to lie, it's a really negative space that a lot of people are living through.
And as an infrastructure organisation, my concern is the physical and mental health of the individuals who deeply care about their communities, who are now facing the closure of their organisation because they can't receive the support they need because the funding sector is not set up for emergency funding. It feels very much like supply and demand culture, where it's like we supply your impact, you buy your impact from us. One of our service users was saying that they went to a funder and said, “hey, its cost us X amount more money to deliver this than the grant that you've given us” with an expectation that the funder will come back and say, “Oh, wow, let's try and adjust the budget. Let's see what's happening. Is there a way we can support you?” Instead the portfolio manager or fund manager was just like, “Okay, cool.” Just think about that and feel that. It makes you think: Ah, so the people that are making these decisions or advocating for us in these spaces, they're trying to achieve these numbers. This is the impact that we said we would create in this space, and we are essentially selling our impact to these funders.
When you understand it like that, it actually gives you a lot more power to navigate the funding sector because then you understand your position in it, it's not a group of people that are here to champion your organisation. What would it be if it was to make you the best leader that you can be, here to support you, care for you, and make sure that you get through that challenge of building an organisation and doing it well. If you speak to a fund manager, one to one, they're not doing that. A grantee isn't seeking to be in a transactional relationship like that. But then when you add all the bureaucracy and you place the people-based relationships in the middle, it's very difficult.
If you haven’t already, please take a look at our recent cost of living crisis report, A Desert without Resources and DiNN’s 2021-2022 Impact Report.
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