Lloyds Bank Foundation for England and Wales
Ringfencing 50% of its core budget for minoritised communities
In a world where equal access to opportunities remains elusive, marginalised and minoritised groups still face systemic discrimination because of their ethnicity or disability. The impact of the pandemic and the cost-of-living crisis has shone a spotlight on the inequities these communities face.
As a funder, the Lloyds Bank Foundation has taken proactive and ambitious action to challenge and change this structural inequity by identifying and acknowledging the disparities within its existing processes and dismantling the barriers which prevent these communities from accessing funding.
In 2019, the Foundation evaluated the diversity of its grants portfolio, analysing past applications by using the Funders Alliance on Race Equality framework. It found that applications from Black, Asian, and minority ethnic-led organisations had lower approval rates overall (26%), even when compared to white-led organisations working with minoritised communities. It also identified shortfalls in its funding of D/deaf and disabled community organisations. The Foundation set out to remedy this.
To ensure inclusion was at the heart of this work, the Foundation worked with people with lived experience of the issues to co-design two funding programmes. It committed 25% of its core funding budget to each programme from 2022-26 (50% in total), equating to £23m across 300 grants. The grants are available to organisations where at least 75% of directors/trustees and 50% of staff self-identify as belonging to the communities they serve.
For the first time, the funder also appointed people with lived experience to the decision-making panel for grants These members form the majority and are paid for their contribution.
In 2023, 256 charities applied for the Racial Equity programme, and 39 were selected. The D/deaf and disabled communities grant fund opened in June 2023 with 118 charities applying and 40 being selected. The charities received £75,000 over three years, with an additional £10,000 development funding.
By offering this type of unrestricted funding and support to develop and strengthen frontline charities working in these specific communities or causes, the Foundation aims to maximise the difference small charities can make to the lives of people facing systemic barriers.
The application sparked keen debate among the Charity Awards judges, with some questioning whether the funder deserved recognition for effectively correcting past mistakes. But others felt the Foundation was showing leadership in a sector that was still largely resistant to change or slow to turn aspiration into reality.
Sharika Sharma, director of business development at CCLA, said that while this sort of good practice ought to be standard across the sector, it simply isn’t.
“Obviously this is what should be happening, but it’s not,” she said. “I sit as a trustee, and I’m aware that we don’t represent the community overall. It can be quite difficult, actually, to find those charities – it’s not an easy thing to do. So whilst it is true that the funding sector should already be doing this, the fact is they’re not.”
Shane Ryan, senior adviser to the National Lottery Community Fund, pointed out that currently just 12% of all charitable funding finds its way to minoritised communities, so for Lloyds to commit 50% of its core funding is genuinely bold.
He added: “Changing the funding landscape by changing who you fund and how you fund is not in itself a new concept. But it isn’t very often that funders realise they are in the wrong territory if they want to effect change for all communities.
“It takes a brave funder to review its practice in this way and make the changes needed to shift their priorities. It will be interesting to see if they can also shift the culture in the longer term.”
He added that most funders are still discriminating against minoritised communities with their funding strategies, and he hoped that highlighting this change by Lloyds Bank Foundation might be the catalyst to persuade others to review their own practice. “We want other funders to follow suit in that space and begin to do this. And they can use this as an exemplar model.”
CC reg no. 327114