Practical Philanthropy: Mary Rose Gunn of The Fore

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Below is a transcript of Lyn Tomlinson and Mary Rose Gunn's conversation. 

Podcast transcript

Lyn Tomlinson

Welcome to episode two of Practical Philanthropy: small charities, big impact. I'm Lyn Tomlinson, Head of Philanthropy and Impact at Cazenove Capital, and this is the podcast where inspirational people share their experience of giving their money, their time or their skills to have transformational effects on society. In this episode, you'll hear from Mary Rose Gunn, co-founder and CEO of the Fore. The Fore is an incredible organisation established in 2017 as a venture philanthropy fund, and it has awarded over 8 million to over 500 innovative small charities who are working to solve some of our biggest challenges. Mary Rose is the guru in something I know will resonate with many of you – finding, funding and scaling small organisations. Welcome to practical philanthropy Mary Rose.

Mary Rose Gunn

Thank you. It's a pleasure to be here.

Lyn Tomlinson

So, can we start with something that's really perplexing me? I saw this horrendous statistic that 10% of the UK's charities get 90% of the funding. And I find that really quite staggering, because anyone like me who advises philanthropists will tell you that funding smaller charities is something they really want to do and they really care about. So what's going wrong here? Why isn't the money finding its way to these smaller organisations?

Mary Rose Gunn

That's a great question. And it's something that is one of the major 'raisons d'êtres' of everything that we are trying to achieve as a venture philanthropy fund. So I think it's because there are a number of barriers, basically, in the way, which are, many of them unintentional for smaller charities when they're trying to get a hold of funding. And one of the major ones is that the funding is often behind, and to access it, you need to get behind and through quite complicated application procedures and processes. And the bigger organisations have the fundraising machines to be able to do that. So, if it's not just direct marketing and television advertising, which is obviously the really big ones, but it's also, for grant funding and funding from trust and foundations, you need to have people who know how to fill in the forms and know how to articulate what they're doing in 150 words, or sometimes even 150 characters. And when you're a small charity, you probably don't have access to the best fundraisers. And the system, many of parts of the system really, aren't very fit for purpose, in my view, because so much of the funding is just going to the people who've got the best fundraisers rather than people who've got the best operations on the ground.

Lyn Tomlinson

And it's a really important problem that we solve, isn't it? Because charities and smaller charities are really important to the UK. Could you just tell us a bit about how important they are?

May Rose Gunn

Yes, completely and utterly, they are vital for us all. I think, because mostly they are so well connected in their communities in comparison to the big organisation. They know the communities that they serve. The smaller charities, whether that be because they've got an online community of people who've got specific types of disability, or whether it be because they operate in a very specific geographical area and so they really know the people that live around the corner from them. But it's also, I think, possibly more importantly in some ways, that is often where the best innovation comes from, because they are so well connected with the challenges that they see people facing. They know how to come up with the best solutions and there are definitely top down solutions that can be very effective. But so often the most cost effective ways of solving problems come from people who have been living those problems inside out for however long. And if we don't support small charities, we lose all of that innovation. And one of the things that we are absolutely about is trying to find those ones that have got really great solutions and then helping them to scale up if that is appropriate, become more sustainable, have greater impacts or replicate their solutions so more people can benefit from them.

Lyn Tomlinson

And that was really interesting because if you listen to episode one, I spoke to Alexandra Chapman, whose family foundation established Ethiopia and they've, in more recent years, started a small grants programme where they are trying to fund innovation and make relatively small grants compared to the other grants they're making. And I just wondered if you could give us an example of where relatively small amounts of funding have actually had a transformational effect both on the charity, but also the people that it exists to help.

Mary Rose Gunn

So, Rich Grahame's charity, Settle is operating with young people who've been through the care system. And there is a horrifying statistic that one in three young people who leave care are homeless within three years. And this is something that has been going on for a long time. And charities, local authorities, bigger organisations have really struggled with trying to solve the problem. There are complex needs amongst the young people who have been in care, as, of course, you can imagine. They have often experienced some pretty traumatic events in their lives, they have had quite chaotic circumstances that they may have come from in order to end up in care in the first place. And horrifying stories that have come out in recent years have shown just quite how unfit for purpose a lot of the care system can be. So when you are coming out of the care system, often as a young person, you might not have the tools for general day to day survival and life knowledge that you need to live in private accommodation on your own. And Rich Grahame was a young man at the time. He's still pretty young, but not quite as young as he was, who had been working in various homeless organisations and had realised that this was a real issue.

But it was also one that really didn't need too much of a complicated solution. And he felt he could really pull something together to change this and help these young people and make sure that they could have much more positive experience of living in private accommodation. And he said, 'Look, I think we can do that by just providing a set of wraparound services'. So, for example, you might need help writing your CV, you might need help learning how to pay bills properly and just put things on direct debit, because when you're in care, the local authority pays for everything. But suddenly when you're in private accommodation, you need to make sure that you pay your television licence, you need to make sure that you don't take out credit cards that you can't afford to pay back. And so Rich set up a wraparound value coordination of services, basically, for these young people, which he called Settle as an organisation. He was doing incredibly well and had a very high success rate of keeping the young people that he worked with in their private accommodation. And he went to local housing association and showed them what he was doing and they said, you know what?

We'll pay for the service for this because it costs us a fortune when we have to evict young people who aren't paying the rent or the bills are racking up. And we hate doing that. We particularly don't want to do it. And it would save us money if we pay for you to come in and work with these new young tenants and make sure that they have a much healthier start in living independently. Rich, then, when we met him a couple of years later, had housing associations knocking on his door to bring his model of Settle into their housing association. And he had a real issue, though, because he was so busy delivering the services on the ground - I think he had one staff member at the time - he just didn't have the time to scale up the organisation, to build more partnerships and to take things forward. And he was in a situation where no funder and nobody he spoke to would basically give him the investment style funding that he needed to free up a few of his days a week to work on the bigger picture with Settle. So that was when we were able to give him a grant, which was £30,000 offered over three years.

So really, in terms of it on an annual basis, not a huge amount of money, which freed up his time so he could get somebody in. Basically, he spent the money on getting somebody in to come and do more of his delivery work so that he could concentrate on the strategy. And Settle has gone from strength to strength since then. We're incredibly proud to have been able to support them in their development as a charity. We put them in touch with a senior credit officer from a big financial institution in London who helped them with some financial planning and modelling. They've now got 16 members of staff, they've helped over 600 young people and they've got ambitions which we love to be working with 25% of the young people coming out of the care system in the next few years and they look like they're on track to do pretty well towards that. So it's a fantastic story and it's an example of where somebody who was very close to the problem really saw exactly what was needed to solve it. Because the sorts of support up until Rich coming along that these young people were being offered was really just not working.

Whereas now they've got a 99% success rate of people keeping in accommodation and these young people are going on to have much, much more positive lives.

Lyn Tomlinson

I want to take a moment to pause and reflect on this incredibly rich and detailed example Mary Rose has talked about here. Firstly, what struck me is this concept that those who are working in their communities close to those with lived experience, or have lived experience themselves, often come up with the most cost effective and impactful solutions. Yet many of our services are designed by those who don't have this experience. According to 'Crisis', the cost of a person being homeless for twelve months is just over £20,000. Yet here we have a social enterprise that can reduce the homelessness rate of those leaving care from 33% to 1%. And that's an absolutely staggering change in outcomes. And the benefits to those people is very clear, but also the benefit to government, given the cost to society of this intractable problem. And as we see so often, local authorities have no budget for prevention and it requires someone like the Fore to fund settle with what is frankly a tiny grant in relation to the cost of the problem they are trying to solve. And that grant enabled the organisation to scale up and reach over 600 people.

That's an unbelievable social return on investment. For me, this example exemplifies the magic of the social enterprise sector in the UK and those who fund them.

And so on to the topic of due diligence then, because I'm sure that's something our audience will be really interested in. So 150,000 charities in the UK have less than 500,000 of income, right?

Mary Rose Gunn

Yes.

Lyn Tomlinson

There's a lot of charities to choose from. So if you are someone who wants to find a Settle, which I think lots of people would, just how on earth do you go about it?

Mary Rose Gunn

If you're very specific, I think, about what, you know, you want to fund, then in addition to that, what things that you can do are go to the Charity Commission website and narrow down your search criteria. Look at there's an online platform called '360 Giving' which looks at where funders are giving money to and who's getting money from where. It's about really making sure that you do in a lot of instances, you do the bulk of the research. So it is about thinking through, as a philanthropist, where are the causes that you want to support? And is it that you're really interested in working in your local area or is it that you're really interested in working in a local area, and you're only interested in young people's charities? Because you can do quite a lot of narrowing down if you have worked out in your head what you're interested in supporting.

Lyn Tomlinson

Great, and when you're actually looking at a small charity, what really jumps out at you? What should people be looking for when they're having those initial conversations?

Mary Rose Gunn

So I think for us, the most important thing is people. And, I mean, that won't really come as a surprise to anybody. It's all about leadership and who the solution, and what they're doing has to be compelling- and that sort of goes without saying - but it's all about who are the people running in the organisation. And, do they know, not just what they're doing, because obviously they know what they're doing, but do you know that they know where they're going? When you ask them the right questions, are they giving you sensible answers to them? For example, with our due diligence, what we're looking for is we're looking for two fundamental things: we're looking for strength of leadership and the ability of our funding to be able to unlock some kind of significant change in the organisation. So we as a funder, aren't looking to fund business as usual, we're looking to give charities an opportunity for step change. So it might be in sustainability, but it might also be in scaling, or resilience, or growth of some sort, and growth in impact as well. So we are looking for those two things. But leadership, we break that down into a number of four, in fact, categories, to be exact.

The first one is management of the organisation, which is about and it's not just about the people running it on an executive level, it's also about the board. Do they have the right people around them to enable them to succeed? And if they don't, can we help them find them? So with all of the things that we're looking for, nothing has to be perfect. But it's about a willingness, from the organization's perspective to acknowledge what they might be missing and look and willingness to address that challenge. So, for example, we funded an amazing organisation that was a group of artists based in Wiltshire who were reducing loneliness by running amazing workshops for elderly, many of them suffering from Alzheimer's and dementia. And they were so fantastic at what they did, but their finances were a little bit messy and it wasn't for us about, 'you need to have perfect finances before we'll fund you', it was about them saying, 'yes, we know they're not great, but we need to go on an excel course', and us saying, no, you, you're the artist, you are amazing about engaging with the elderly people, you run these fantastic workshops, you have amazing results from what you do.

We know loads of accountants who could help you write, create a template, spreadsheet and you just need to fill the numbers in and out the bottom will come the figures that you need. Or is it that you need an accountant to join your board? Those are the sorts of questions that we're asking and the response to those questions is much more crucial than the situation at the start. So if they go, oh, no, but we don't want any help on that, that would be a red flag. But when the charity says, we'd love someone, do you think there might be someone out there that could help us with that? That's when we kind of light up. Absolutely. There are loads of people out there who love doing a spreadsheet and they would really, really value the chance to be able to share their skills with somebody who is actually changing lives on the ground.

Lyn Tomlinson

Quite often, people think about philanthropy being about giving money and of course that's true, but Mary Rose Gunn highlights something that's really important here: about giving your time and your skills as well. And as you can hear from her example, the value to the organisation of what to us is a pretty straightforward piece of work, is absolutely enormous. And in my experience, many people who get the most out of their giving are involved with a charity way beyond their money, very often using all of the tools at their disposal to affect the change they seek.

And just that point about changing lives, and you mentioned it there as well, about you're amazing at delivering the intervention, you do that best. How does someone know that the intervention is the right thing to be funding? Do you do any of that due diligence in your process?

Mary Rose Gunn

So, yes, there's a sort of nuanced answer to that. We're taking risks, but we think that that's very, very important, that nobody has changed anything if they don't take a few risks. So while we are doing a certain amount of due diligence on whether this is the right intervention or not, we're also not pretending to be experts in every sector. The Fore is a sector agnostic funder, so we fund people working across any cause. It can be in youth opportunity, it can be in racial justice, it can be in anything. And we don't ever set ourselves up as the experts in any of those particular cause areas. But what we do expect is for the people running the leadership of these organisations, they need to be experts in social justice or in offering opportunities to young people who have maybe dropped out of the education system. And we work out whether they are experts by asking them good questions. Obviously, there is potential for them to be fantastic at giving good answers and then not being experts on the ground. But it's very unusual, I would say. I liken it to Dragons Den, in that anyone watching Dragons Den kind of knows who's going to get something because they answered the questions of the drag.

The Dragons know how to ask the right questions and they answer the questions really well. And one of the questions that we pose in due diligence is about what's the competition like in your sector? Who are you up against? Why are they better than you? And we reference the charities during due diligence, so we'll speak to board members as well as external referees. So, for example, if it's a charity that is offering a really exciting, creative, arts and culture intervention in schools. Perhaps one of the referees might be the head teacher of one of the schools that they are working in, and the questions will be posed to that head teacher, why did you choose to work with this charity over others? And why is it so good? So we're getting a pretty good all around look at the organisations that we are funding and it's also very, very competitive, so only the best at getting through.

Lyn Tomlinson

So, in terms of reporting everyone's favourite subject, how do you follow up with your investees in terms of the impact that they're making or reporting requirements?

Mary Rose Gunn

So we do monitoring evaluation on an annual basis of the charities that we are giving funding to, and that's done on a verbal basis. So we have conversations with them, we turn these into written reports and we turn them into data. But fundamentally, we believe in not putting the burden of reporting on the shoulders of the charities because they're so busy with everything anyway. And our part of our due diligence process is about helping them set themselves some KPIs for their organisation, which are markers that are right for them. And so they are reporting back to us on their ability and their success in hitting their own targets. So we are quite keen, we're very keen and keen to try and spread the word on this, is for people supporting small charities to try and make sure what they want the charities to monitor is something that's useful to them. Because I think with a lot of funding, they can find that they are tying themselves up in knots to try and meet what the funder wants to report back on, because they are a funder for specifically children's charities, so they need numbers of children helped as their metric.

Whereas if you're a charity that's working in a community and you are doing a number of varied interventions, that might not be exactly what you need to measure.

Lyn Tomlinson

Fantastic. Thank you. That's fantastic. And you call yourself a venture philanthropy fund, which is really interesting because lots of the audience will be familiar with venture capital. So I suppose just thinking about it in terms of taking on additional risk and growing companies, it's very similar process and you wouldn't expect them all to do brilliantly. So what do you think in terms of I mean, obviously you're so good at it now that most of yours go on to better and wonderful things, but when you first started out, what do you think you learned from that process and any failures that you might have had?

Mary Rose Gunn

I think we right, to be honest, right from the start, the success rates were really, really high. And I think that's because when you make it all about people, it's not that difficult to spot the quality. The people who have got vision and the people who are inspiring and running these small organisations, they're not that difficult to spot because there's just a feeling about them. You want to help them when you meet them and they are obviously so dedicated to the causes and the difference that they're making. That bit, I think, hasn't been the difficult bit. I think we've learned a lot about the value over the last five years and then obviously, we had a four year pilot before that as well. So over the last nearly ten years now about how important it is. It's not just about the money, so we are providing it's unrestricted funding that is very important to mention. It's the unrestricted funding, but it's also about the connections with broader networks and also with the peer-to-peer networks. So we now do spend quite a lot of time enabling the portfolio charities to meet each other because they learn enormous amounts and get an enormous amount of benefit from being able to share skills and experiences.

It's really lonely running a small charity or a nonprofit in the UK. The funding landscape is brutal and it can be incredibly demoralising. And particularly when we've had COVID, we've now got a cost of living crisis. The leaders who are running these charities and social enterprises, they are the good samaritans of the world. They are the people who have seen a problem and stopped beside it and said, you know what, I'm not going to keep on walking, I'm going to try and do something about this and try and change this. And they are often doing that because they might have some personal connection with that problem. So it can be one thing that we really advocate for with the organisations and the portfolio charities, is making sure that they've got the right support around them where we can, so that they don't feel like they're on their own. They feel as though they've got people who are operating from their side of the table and that's something that I think is really lovely. It's actually a phrase, in fact I had a conversation this morning with someone we're working with who's a foundation, and they said when they started up, they're quite new, they wanted to feel like they were on the same side of the table as the charities.

And that's when the power dynamic is right. That's when you've really got it right as a philanthropist, is when the charity feels like you're on their side. You can be a critical friend, but you are on their side fundamentally. You're not just shopping as opposed to investing in them. You're not just saying, 'oh, how many more children have going to have learnt to read by the end of the intervention'. You're saying, 'I love what you do, I love your mission. How can I help you further that?'

Lyn Tomlinson

And that's a pretty amazing statement to end on, actually I think. So this is obviously your area of expertise and you sort of devoted your entire career to it. How would someone listening to you who wants to follow your great work get in touch with you? Or where should they follow you online?

Mary Rose Gunn

Well, we have a website which is thefore.org. I am also delighted to speak to people. I'm on LinkedIn. I'm on Twitter @Maryrosegun. We have newsletters that you can sign up for. We have networks if you're somebody who's interested in giving skills but you don't necessarily have any resources. We have networks that you can sign up to where you can share everything that you've learned in your professional career. And we are just very keen to collaborate with people. So please get in touch.

Lyn Tomlinson

Fantastic. Thank you.

I hope you enjoyed listening to Mary Rose. I certainly did. Expertise and passion absolutely oozes out of that woman. I found so much to take away from my time with her, particularly this need to be really respectful of small charities, given their limited resources, and do as much of the heavy lifting as you can. How it's obvious when you meet the right leadership and just how unbelievably difficult and quite lonely it is for these incredible people to access the funding they need. Next up in episode three, we'll be talking to Sophie Marples from the Gower Street Foundation. Sophie went from funding women and girls to funding climate change. Why did she do it? What help did she get? And what were the challenges? Thank you for taking the time to listen to Practical Philanthropy. You can reach me on LinkedIn or at Lyn.Tomlinson@cazenovecapital.com.

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