1. Small Charities Challenge Fund (SCCF)
MannionDaniels | Bristol | November 2017

2. UK Aid Direct consortium partners:

4. What is UK Aid Direct?
UK Aid Direct is the UK government’s funding mechanism to support small and medium sized civil society organisations to work towards achieving the Global Goals
It has been running since 2010 and was previously the Global Poverty Action Fund
It is multi-sectoral in nature and reflects DFID priorities
Successful applicants from the most recent funding round (launched Nov 2016) were announced during the summer and are now finalising due diligence
Two grant types currently: Community Partnership for organisations with income <£1m; Impact grants for organisations with an income <£10m
Now Small Charities Challenge Fund (SCCF) for smaller organisations with income <£250k

5. What is the Small Charities Challenge Fund (SCCF)?
SCCF was set up to target small, British, grass-roots organisations who are perhaps not currently eligible under the regular funding rounds of UK Aid Direct
Organisations must have an average annual income of <£250k
Multi-sectoral in nature and reflects DFID priorities
Grants of up to £50k are available for projects lasting up to 2 years
Open funding round and applications are reviewed every 6 months
First cut-off date was 30 September 2017
Successful applicants are expected to be announced in the New Year

6. Application process:
All applications must be completed and submitted online
The next review of applications will take place after 31 March 2018
The funding allocation for the SCCF is £4m over a 2-year period, with a target of £1m per window
Initial financial due diligence (FDD) and integrity due diligence (DD) will be carried out to ensure eligibility criteria are fully met and there are no concerns relating to the applicant organisation

7. Review process: All proposals are assessed by a panel of experts
The experts selected have significant experience in working with DFID, on supporting projects, and on assessing proposals
They are provided with guidance on scoring and reviewing proposals to ensure a consistent approach
There is a thorough quality assurance process to ensure fair assessment of each application
Reviews are carried out by the Fund Manager
DFID moderation of reviews and successful applicants chosen

8. Findings from recent research and previous UK Aid Direct funding rounds:
The design of UK Aid Direct projects needs to be strengthened - most issues have stemmed from this
A greater focus should be given to sustainability and building sustainable elements into all projects
Projects need to be able to respond better to changes in context and build on feedback and learning in order to adapt
Approach to capacity building of beneficiaries, implementing partners, frontline staff and other stakeholders needs greater consideration

9. Statistics from recent SCCF funding round review – Oct 2017
Over 1,400 applications were registered and initiated on the online portal
522 were automatically sifted out by the online eligibility check – largely due to the applicant organisations being non-UK registered
101 eligible applications went forward to the assessment stage
It is expected that approximately grants will be awarded in this first review round, up to a value of around £1m
Cumulatively the 101 eligible applications are proposing to work across 24 countries and 26 sectors

13. The strongest applications from the first SCCF review demonstrated the following features:
They outlined the approach they are proposing in a simple and clear way, with a clear indication of what the results will be
They had a simple budget that clearly relates to the proposed activities
If related to another project or with match funding, they clearly explained what the overall project is and why the additional funding would add value
They suggested project outcomes that are not too ambitious but are realistic and achievable in 2 years
They were not focused on infrastructure or using approaches like sport or music, unless clearly linked to demonstrable development outcomes

14. Application Process

15. Project design section:
Download the ‘top tips for applicants’ document in ‘Guidance’ on website
Download the general project design presentation
Read about DFID’s strategic objectives and focus and then consider which of these strategic objectives your project contributes to
Note that projects may contribute to more than one
Look at what the fund is trying to achieve – read the fund level theory of change
Think about how your project will contribute to the objectives of the fund
Consider which UK Aid Direct approach best fits with your approach

16. Project design section:
Think about and detail who you consulted with during the design of your project; beneficiaries, government, other NGOs
Consider and demonstrate why your project is needed
Consider and show what it is you want to achieve with the project and how you will do it
Show how are you working with others; e.g. is government involved?
How many people will benefit from the project? Those benefitting directly and those benefitting indirectly. Measure unique individuals. How have you identified them?
Show how you can address gender and disability issues

17. Leave no one behind – recommended reading:
girls-and-women-updates-to-dfids-strategic-vision-for-girls-and-women- to-2020-and-beyond
data/file/554802/DFID-Disability-Framework-2015.pdf
our-promise/leaving-no-one-behind-our-promise/

18. Results section:
Think about and demonstrate what a successful outcome of the project would look like. What would the change you are expecting to happen look like?
Consider and show how you will monitor your results to show whether you have been successful. How will you monitor how your project is doing? How will you collect information and data?
Reflect on how the project will continue once UK Aid Direct funding ends? Are you building capacity? Can the local community take over elements?

19. Results framework:
Read the specific guidance on how to develop a results framework
Each stage of the results framework should form a logical flow and link to each other
What you do at each stage helps lead to the success of the next stage
Outline the outcomes of the project – what you expect to change
Choose 2 indicators – ways of measuring the change
Develop output indicators – what you need to do to contribute to the outcome
Outline activities – what activities the project will do to meet the output indicators

20. Value for money (VFM) – things to consider:
Consider VFM across your project when designing it
Are you reaching the right target group? Are you reaching the right number of beneficiaries to make it worthwhile?
Are you using the best way of reaching them? Are there examples of how this has been successful before?
Are you considering how to keep your costs down? What are your main ‘cost drivers’?
Are you being as effective as you can be? What is the cost per beneficiary? Are there any economies of scale you can take?
What would this grant enable you to do that you can’t currently do?

21. Risks:
Think about the risks the project faces: security, financial, environmental or political risks
Explain what they are, what impact they would have on your project and what you will do to either prevent them from happening or dealing with them if they do happen
You won’t be penalised for putting all risks down
Be realistic

22. Applications - financial requirements:
Stage
Detail
Requirements
Application stage
Financial due diligence
Completed by the Fund Manager using details from the application
Integrity due diligence
Workplan and budget
Produce a fully costed workplan in line with UK Aid Direct Financial Guidelines
Prior to contracting
Financial management assessment (FMA)
An in-depth due diligence assessment requiring provision of documentation, staff interviews and a possible site visit
Revised workplan and budget
Revisions on SMILE (our online portal)

23. Financial Guidance

24. Principles:
Financial guidance available online: a) Principles of reporting, b) Budget classification, c) Exchange Rates and d) Due diligence requirements
Cash-based accounting (no accruals)
Reporting on the transactions of the project not the grant holder – partner transactions should be reported alongside grant holder transactions
1st April – 31st March is the financial year with very little flexibility between years

25. Principles – continued:
Quarterly financial reporting feeding into claims/payments
Reporting through an online portal (SMILE) at transaction level
Payments are made in arrears by default but may be agreed in advance, for smaller organisation who don’t have adequate reserves to operate in arrears

26. Arrears claims: Advance claims:Q1
Expenditure
Claim
Payment Q2
Arrears claims: M1 M2 M3 M4 M5 M6 Q1
Expenditure
Claim
Payment Q2
Advance claims:
All grant holders will require some amount of internal funding or match funding to cover the gap between expenditure and payment.

27. Costs to include and to exclude:
Reporting costs
Audit costs
IATI compliance costs
M&E costs
Reasonable apportionment of overheads
Match-funded amounts (Impact grants)
Spending by implementing partner not transfers to implementing partner
Exclude (not permissible)
Lobbying UK government
Petition for additional funding
Political or exclusively religious activities
Statutory fines, criminal fines or penalties
Severance pay, payments etc.
Major capital expenditure cannot be supported as the primary focus
Land or cars
Contingency/unforeseen costs
Depreciation/amortization

28. Start thinking about management of the risk of currency fluctuations
Exchange rates:
Acceptable
Lump sum transfer
Daily spot rate
Average Market Rate
Daily Market Rate
Not Acceptable
Budgeted rate
Estimated rate
Cumulative averages across the year
Start thinking about management of the risk of currency fluctuations

29. Any questions?