Using a Host Organisation to Apply for a Grant

Not every good community idea starts with a constituted group and a bank account. A residents' group, a new campaign or an informal network may need money before it has the paperwork funders expect. One way through is a host organisation: an established group that receives the grant and manages it on your behalf. This guide explains how hosting works, which funders allow it and what to agree before you start.

What a host organisation does

A host organisation, sometimes called an accountable body, lead partner or fundholder, is an organisation that:

• applies for the grant, or is named on the application as the body that will hold the money
• receives the grant into its own bank account
• pays the project's costs, or passes money to the project under agreed controls
• keeps records and reports to the funder
• is responsible to the funder if things go wrong

The group running the project still does the work. The host provides the legal and financial structure that the group does not yet have.

Which funders allow hosting

Rules differ a lot, so check before you plan around a host.

Funders that allow it

Some funders explicitly allow it for very small or new groups. Devon County Council, for example, says that for its Growing Communities Fund it may consider paying a grant to a host organisation where a very small group does not have its own bank account, may not have all the required documents and is not yet formally constituted. It sets conditions, including that:

• the host is a registered charity or a parish or town council
• the host's bank account is in its own name with at least 2 unconnected signatories
• the host knows the group and is aware of the project
• the applying group is newly formed or unconstituted, and is planning to set up its own bank account

It asks the host for written confirmation that it will hold the funds for the grant, and still expects the group to show basic financial management, such as a simple cashflow, and to have the relevant policies in place.

Schools are another common case. Garfield Weston Foundation says that if a school is neither a registered charity nor an exempt charity, a related registered charity, like a PTA or Friends group, must apply on its behalf.

Funders that do not

Others rule it out. National Lottery Awards for All England lists organisations applying on behalf of another organisation among those it does not accept applications from. Some funders also exclude organisations whose main work is passing money to others. Two Ridings Community Foundation, for example, says it cannot normally support organisations that mainly give funds to other organisations or individuals, or on-granting, unless a particular scheme allows it.

If the guidance does not mention hosting, ask the funder before you apply.

Choosing a host

A good host is:

• Eligible for the grant you want, by organisation type and area. Our guide to grant eligibility by organisation type explains how funders check this.
• Well run, with sound accounts, at least two unrelated signatories and the policies the funder needs.
• Aligned with your aims. A host's governing document usually needs to allow it to support your kind of work.
• Willing to take on the admin and the responsibility.

Common hosts include local charities, community associations, councils for voluntary service, parish and town councils, and churches. For school projects, a PTA or Friends group that is a registered charity often plays this role.

Questions to ask a possible host

Before you approach a host, think about what it will want to know, and what you need to know from it:

• Has it hosted grants before, and how did it manage them?
• Is it eligible for this grant, and does the funder allow hosting?
• How will it hold the money: in a separate restricted fund, or mixed with its own income?
• How quickly can it pay suppliers or reimburse receipts?
• Will it charge a fee, and how much?
• Who will be your day-to-day contact?
• What happens if a key person at either organisation leaves?

A host that can answer these clearly is likely to be a good partner. If it hesitates on most of them, look for another.

What to agree in writing

Because the host carries the risk, it will want a written agreement, often called a memorandum of understanding. It should cover:

1. The project. What the money is for, the budget and the timetable, matching the application.
2. Who does what. Who runs the activity, who buys things, who signs off spending.
3. How money moves. Whether the host pays suppliers directly, reimburses receipts or releases money in stages.
4. Records and reports. What evidence the group must give the host, and by when, so the host can report to the funder. Our grant monitoring and reporting guide explains what funders usually ask for.
5. Who owns what. Who owns equipment bought with the grant, during and after the project.
6. Fees. Whether the host charges a fee, and whether the funder allows that cost in the budget.
7. Changes and problems. What happens if the project changes, runs late or stops, and how disagreements are resolved.
8. Credit. How the funder, host and group are named in publicity.

Keep a copy with your project records and share it with the funder if they ask.

Writing the application with a host

When a host is named, the funder is assessing two things: the project and the host's ability to manage it. Make both clear.

• Explain the arrangement. Say why the group cannot apply directly and how the hosting works.
• Show the group's involvement. Funders want to see that the people running the project designed it and will lead it. Our statement of need guide can help you show local need.
• Show the host's track record. Briefly describe its experience of managing grants.
• Use one budget. Include any host fee as a clear line, if allowed. See our grant budget template guide.

Moving on from hosting

Hosting works best as a stepping stone. Many funders, including those that allow hosting, expect the group to set up properly over time, and Devon's conditions, for example, include that the group is planning to set up its own bank account. Use the time to:

• adopt a constitution. Our guide on how to write a constitution for a community group walks you through it.
• open a bank account in the group's name with at least two unrelated signatories
• elect a committee and hold your first AGM
• keep simple accounts, so you have a track record when you apply on your own

Then you can apply directly to community funders, starting with your local community foundation. Our community foundation grants guide explains how.

Find grants for new and small groups

GrantMatch lists open grants for community groups, including small local funds that welcome new groups. Browse grants for community groups, or create a free profile and we will match you with the right ones as soon as you are set up.