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Technology helps to reduce bureaucracy in grant-giving - report

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Technology helps to reduce bureaucracy in grant-giving - report

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Published by 24publishing for allpay Limited in Local Government and also in Communities, Finance

IPPR North, taken for granted, Big Lottery Fund, VCS, prepaid card, grant-giving, allpay, social fund, housing benefit, 9 January 2012 IPPR North, taken for granted, Big Lottery Fund, VCS, prepaid card, grant-giving, allpay, social fund, housing benefit, 9 January 2012

Local authorities, charitable trusts and foundations are experimenting with new technology to reduce bureaucracy in grant-giving – including using prepaid cards as a way of paying out grants.

This example was highlighted in a report released today by influential think tank IPPR North which examines the ways in which small voluntary and community sector organisations utilise and receive funding.

It also recommends steps to ensure that the Government’s ‘big society’ agenda neither passes these organisations by, nor squeezes them out of their vital community functions.

The report notes that while the role of the public sector may have diminished in this area, £3.6bn a year is given in grants to charities (including religious organisations and universities) by charitable trusts and foundations.

While this is the preferred form of funding for many organisations, there remains a significant problem with excessive bureaucracy, warns the report, especially in application, reporting and monitoring processes. It has been estimated that voluntary and community sector organisations “waste around £250 million a year on making duplicated or unnecessary reports to grant-giving foundations and government bodies”.

However, it notes that some organisations are experimenting with using new technology to reduce bureaucracy in grant-giving. It cites a partnership where The Big Lottery Fund is working with payment specialists allpay to pay out grants with a prepaid card [pictured right]. This, says the report, “enables the donor to then monitor where the money is spent online and in real time, rather than through a retrospective, paper-based system”.

allpay already works with a number of local authorities who are using its prepaid offering. Derbyshire County Council, for example, is providing allpay’s prepaid cards to residents to pay for Children’s Services, while others are using it for a range of payments from housing benefit and adult social care payments to decorating allowances.

Local authorities are also exploring prepaid cards to pay out parts of the social fund which they will administer from April.

Nick Peplow, allpay’s business development director, said: “Prepaid cards really help grant-giving organisations reduce bureaucracy. They help to significantly streamline and reduce costs in both the reporting and the monitoring process.”

The IPPR report warns that small voluntary and community sector organisations are the “life-blood of civil society and that they have a crucial role to play in the big society”. It highlights the need for more flexible approaches to funding to help sustain these organisations through the Government’s Big Society agenda.

In particular, it recommends that grant-giving organisations should think more “creatively” about how they can use and target their grants to small voluntary and community organisations to support them at key turning points, and they should consider bolstering endowment funds.

It also recommends that microfinance products should be designed specifically for VCS organisations, and if the government should consider allocating capital through Big Society Capital to ensure that it meets its targets for 25 per cent of contracts to be delivered by small organisations.

If you would like to find out more about how allpay’s prepaid card solution could support your organisation in administering and paying out grants, contact Ley Wilson at ley.wilson@allpay.net or call 01432 852 416.

Notes:

allpay is the UK’s leading payments specialist working with more than 750 public sector clients ranging from housing associations and councils to Her Majesty’s Court Service, credit unions and charities.

As well as facilitating the collection of bill payments for organisations, allpay’s prepaid card solution enables organisations to have more control over the distribution of their funds, moving away from costly cash, cheques and vouchers.

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