How does an HR system help charities gain and retain funding?

With funding already under significant pressure, demonstrating this is more important than ever. Charities need to demonstrate that they have the right people, processes and resource in place and importantly, the evidence to support this. Especially when according to research from NCVO, 44% of charities say their government grants and contracts haven't covered the full cost of delivery since at least 2020.

This is where a HR system for charities can play a significant role.  

While HR software won't secure funding on its own, it can give charities a stronger foundation for successful funding applications, better workforce planning and ongoing reporting. By bringing HR, payroll and workforce data together, charities can demonstrate that they understand their people, their costs and their capacity to deliver.

Why does workforce management matter to charity funding?

People are at the heart of most charities. Whether an organisation delivers community services, supports vulnerable people, provides education or campaigns for change, its ability to achieve its mission depends on having the right people in place.  

Funders therefore need confidence that a charity can manage its workforce effectively.  

This could include understanding:  

• How many people the charity employs
• Where employees are based
• What skills and experience are available
• How much of the workforce is permanent, temporary, or voluntary
• Whether employees have the appropriate training
• How staff turnover could affect service delivery
• What the organisation’s workforce costs are
• Whether appropriate HR policies and processes are in place

When this information is spread across spreadsheets, documents and separate systems, it can be difficult to create a clear and accurate picture.  

An integrated HR platform, like People First, can bring this information together, giving HR teams and leadership a more reliable source of workforce data and making it easier to use that information when applying for, managing and reporting on funding.  

4 ways HR software could help your charity when it comes to funding

1. Build stronger funding applications with better workforce data

When applying for funding, charities often need to explain how money will be used and demonstrate that they have the capacity to deliver the proposed project or service.  

That might involve providing information about staffing levels, salaries, recruitment requirements, skills, or the resources needed to deliver a programme.  

Having accurate workforce information readily available can make this process much easier.  

Instead of manually gathering information from different spreadsheets and systems, an HR system can provide a central view of the workforce. This can help charities answer important questions such as:  

• Do we have enough people to deliver this project?  
• What will our staffing costs be?  
• Where are our skills gaps?
• How many people will we need to recruit?  
• What training will employees need?  

This information can help charities develop more realistic funding proposals and demonstrate that they have carefully considered the resources required to deliver their plans.  

It also gives decision-makers greater confidence in the figures behind an application.

2. Demonstrate good governance and financial responsibility

Funders want to know that their money will be managed responsibly.  

For many charities people costs represent a considerable proportion of expenditure. Having accurate information about salaries, headcount and workforce changes can therefore support better budgeting, forecasting and financial planning.  

A connected HR and payroll system can give leadership teams greater visibility of workforce costs and help them make more informed decisions.  

This is important beyond the initial funding application. Good governance needs to continue throughout the life of a funding relationship.  

Having reliable workforce data can help charities demonstrate that they have appropriate processes in place, understand their resources and are making decisions based on accurate information.  

3. Prove you have the people to deliver

Winning funding can lead to growth.  

A new grant might allow a charity to recruit additional employees, create new roles, or expand an existing service. Without effective people processes, that growth can create additional administration and risk.  

An HR system can support the employee journey from recruitment and onboarding through to learning, development and performance. It can also give charities greater visibility of the skills they already have and capabilities they need to develop.  

This helps charities demonstrate not just what they plan to deliver with funding, but how they will deliver it.  

For example, if a funded programme requires additional employees with specific qualifications, workforce data can help identify whether those skills already exist within the organisation or whether recruitment and training will be required.  

That creates a clearer link between funding, workforce planning and service delivery.  

4. Make it easier to demonstrate impact

Securing funding is only part of the challenge. Charities may also need to demonstrate how funding has been used and what has been achieved.  

Workforce information can form part of that evidence.  

A charity may need to show that it recruited into funded roles, maintained appropriate staffing levels, or delivered mandatory training. Having this information readily available can make reporting easier and give leadership teams a clearer view of whether the organisation has the capacity to deliver its objectives.  

Better reporting also means charities can spend less time searching for information and more time using it to understand performance and make decisions.  

Funding starts with confidence

An HR system won't replace a strong funding application, compelling impact data, or sound financial management.  

What it can do is provide some of the infrastructure behind them.  

By bringing HR, payroll, learning, talent and workforce data together, HR software can help organisations build a clearer picture of their people, improve reporting, strengthen workforce planning and reduce unnecessary administration.  

Ultimately, gaining and retaining funding is about demonstrating that your charity has more than a good idea. It is about showing that you have the people, processes, resources and evidence needed to turn that idea into meaningful outcomes. 

How can MHR help charities?

MHR's People First brings HR, payroll, learning, talent and workforce data together in one platform, giving charities greater visibility of their people while helping to reduce administrative workload.