Glossary - Funding Team

Welcome to our glossary of key terms. Here, you'll find simple, clear definitions for all the important words and phrases you need to know. Whether you're new to the topic or just need a quick refresher, this guide will help you navigate with ease.

Glossary of Key Terms for Funding Enquiries/Applications in Wales (UK)

1.     Group Constitution

A legal document that sets out the purpose of the group, its rules, and governance structure. It typically includes:

• Aims and objectives
• Membership rules
• Roles and responsibilities of committee members (such as Chair, Treasurer, and Secretary)
• Decision-making processes
• Financial management procedures This document is often required for funding applications to show that the group is well-structured and transparent in its operations.

2.     Group Types (Legal Structures)

Funders may require groups to have a specific legal structure. Common group types include:

• Unincorporated Associations: Informal groups run by a voluntary committee. Common for small community groups but offer no legal protection to members.
• Registered Charities: Charities are formally registered with the Charity Commission for England and Wales, with a legal duty to operate for public benefit.
• Community Interest Companies (CICs): Social enterprises that operate for community benefit, with restrictions on how profits are used.
• Charitable Incorporated Organisation (CIO): A type of charity that offers limited liability to trustees, reducing personal financial risk.
• Cooperatives: Member-owned organisations run democratically, often focused on shared economic, social, or cultural benefits.

3.     Trustee

Trustees are individuals who manage the affairs of a charity or nonprofit group. In Wales, they are legally responsible for ensuring that the organisation is run according to its constitution and complies with relevant laws and regulations. Trustees are accountable for managing the group's finances and safeguarding its assets.

4.     Governance

The systems and processes through which a group or organisation is directed, controlled, and held to account. Good governance is critical to securing funding, as it demonstrates that an organisation has strong leadership, financial controls, and accountability mechanisms.

5.     Annual Accounts

Annual financial statements outlining income, expenditure, assets, and liabilities over a 12-month period. Funders may request recent annual accounts to assess the financial health and accountability of the organisation.

6.     Financial Controls

Procedures that ensure proper management and accountability for the group's finances. This can include processes for authorising spending, maintaining accurate financial records, and conducting audits. Strong financial controls reassure funders that their money will be managed effectively.

7.     Project Proposal

A written plan detailing the specific project for which funding is being sought. A typical proposal includes:

• Clear objectives
• Description of the target beneficiaries (e.g., the community or group that will benefit)
• A timeline of activities
• A detailed budget
• Expected outcomes and methods of measuring success.

 This is a key document funders use to assess whether a project aligns with their priorities and objectives.

8.     Capital Funding

Capital funding is used for purchasing, building, or refurbishing physical assets such as property, vehicles, or equipment. This type of funding is common for projects that require infrastructure development or large one-off purchases. Funders may ask for evidence of sustainability, including how the asset will be maintained.

9.     Revenue Funding

Revenue funding covers the ongoing operational costs of running a project or organisation. This includes salaries, rent, utilities, materials, and other day-to-day expenses. Funders offering revenue funding often look for a clear plan on how the project or organisation will be sustained once the funding ends.

10. Match Funding

Some funders require organisations to secure a portion of the total project cost from other sources, known as match funding. For example, if a project costs £10,000, a funder may ask that £2,500 is contributed from the organisation's own funds or another funder, and they will cover the remaining £7,500.

11. Sustainability

In the context of funding, sustainability refers to how a project or organisation plans to continue its activities once the initial funding has ended. Funders often want assurance that their investment will have long-term benefits or that the project won't become financially dependent on repeated grants.

12. Monitoring and Evaluation

A structured process of assessing whether a project has achieved its intended outcomes and how well resources have been used. Monitoring is the ongoing collection of data (e.g., the number of beneficiaries served), while evaluation often involves more in-depth analysis of the project's success, challenges, and lessons learned. Funders often require periodic reports and a final evaluation.

13. Social Impact

The measurable positive effects of a project on individuals, communities, or the environment. In Wales, funders often prioritise projects with significant social impact, particularly in areas such as health, education, social inclusion, and economic development.

14. Memorandum of Understanding (MoU)

A formal agreement between two or more organisations working together on a project. While not legally binding, it sets out the expectations, roles, and responsibilities of each party. MoUs are useful when applying for funding for collaborative projects.

15. Restricted vs. Unrestricted Funding

• Restricted Funding: Can only be used for the specific purpose outlined by the funder, such as a particular project or activity.
• Unrestricted Funding: Can be used for any purpose, giving the organisation flexibility to allocate funds where they are most needed, including core running costs.

16. Core Funding

Funds that cover the essential operational costs of an organisation, such as staff salaries, office rent, and utilities. Core funding is more difficult to secure than project-specific funding, but it is crucial for the sustainability of many organisations.

17. Partnership Agreement

A formal arrangement between organisations that work together to deliver a project. A partnership agreement outlines the roles, responsibilities, and financial contributions of each party, ensuring clarity and accountability for funders.

18. Competitive Funding

Funding awarded through a competitive process, where organisations must apply and are assessed against other applicants. Examples include lottery grants or government funding schemes where only the strongest applications are successful. Funders assess applications based on criteria such as the project's impact, feasibility, and value for money.

19. Non-Competitive Funding

Some funders provide non-competitive funding, where all applicants that meet the eligibility criteria and application requirements receive funding. This type of funding is often targeted at specific groups or communities, such as rural or disadvantaged areas in Wales.

20. Small Grants

Grants typically of lower value (e.g., under £10,000) aimed at supporting small projects or early-stage activities. In Wales, small grant schemes often support grassroots initiatives in local communities.

21. Large Grants

Grants that provide substantial funding, typically for large-scale or long-term projects. These grants may come with more stringent reporting and accountability requirements.