Funding and Income > Different types of funding
What are the different types of funding available?
Both specialist and non-specialist criminal justice voluntary organisations rely on funding from a variety of sources, which they receive in different ways.
Categories of income
All income received by voluntary organisations falls into one of these three categories:
Voluntary income is given freely by a donor (whether from an individual, trust, foundation, the government, or a private company). It can include grant funding.
Earned income is income received in return for providing a service. This includes contract funding.
Investment income is income received as a return on investment assets. This includes property, stocks and shares or other similar assets.
Types of funder
These are the most common types of income by funder:
Statutory funding is the money that government pays organisations to deliver projects and activities that provide public services. Find out more here.
Charitable funding is the money that charitable organisations - mostly trusts and foundations - give to organisations, to deliver projects and activities that further their charitable aims. Find out more here.
For more information on the other sources of income for voluntary organisations working in the criminal justice sector, visit Alternative sources of income.
Most common types of income
The most common ways that these funders provide income are:
Contract funding is money that a funder agrees to pay to an organisation in return for the supply of certain services. In the criminal justice sector, most contract funding comes from government departments, local authorities, and other public sector organisations. However, a small number of criminal justice voluntary organisations do also receive some funding through contracts with the private sector. In theory, if an organisation doesn't use all of the funding it receives through a contract to deliver the agreed services, it can keep this unspent funding as profit. In reality, organisations delivering under a government contract or sub-contract can struggle to achieve full cost recovery. Find out more about government contract funding here.
Grant funding is money that is awarded to an organisation to support its activities. It's given, as least partly, in advance. Some grant funding comes with no strings attached, but often, funders award a grant for specific use, such as a one-off project. This means that the grant funding is restricted, and can only be used for that purpose. While the grant giver will have some reasonable expectations and a degree of control as to the activities it will be used for, grant funding does not have to be paid back should the recipient not manage to achieve everything it planned to with the funding. Government funders do run some grant funding programmes. Trusts, foundations, and other charitable organisations generally fund criminal justice voluntary organisations through grants. Find out more about government grant funding programmes here and about charitable grant funding here.
While these are the main funders and types of funding, there are others. For more information on the other sources of income for voluntary organisations working in the criminal justice sector, visit Alternative sources of income.