Beyond the Funding Game

Community funding often isn’t as transparent as it should be; games get played and thorny issues are sometimes unacknowledged and often unaddressed.

I explored some of this recently at a breakfast meeting with the Fundraising Institute in Auckland: – here is my presentation:

Beyond the game, through the thorny issues and towards thriving communities.”

The session was well received and interactive, and there were some great ideas generated by the 70+ attendees for addressing some of the issues discussed. These fell into four themes:

Explore new funding models – NZ community organisations are more dependent on grants than their US counterparts (36% of funding in NZ is from grants compared to 15% in the US.)   New approaches should be explored and some concrete examples were suggested, for example:

  • “Dragon’s den” type funding where community organisations present to multiple funders (as used by Ākina foundation for their Launchpad programme or The Funding Network)
  • “Cause-led” – where multiple organisations are funded to work together on an issue
  • Online portals where projects can be posted and funders browse for the ones that meet their requirements

Build better relationships – there are two components to this:

Community Organisation / Funder relationships: There were many calls for funders to meet face to face more often and to engage in real dialogue, both before and during the grant. This allows trust and partnership to develop, which in turn leads to a genuine, two-way exploration of impact and how it can be achieved and measured.  A relationship management approach where both organisations know who to contact was also recommended.  Finally, respect and acknowledgement also matter – as one person noted “a simple thank you for the time spent, whether you are successful or unsuccessful, is really important”.

Relationships between community organisations: there was discussion about whether there were too many community organisations, with new organisations sometimes starting before the founders have checked whether an existing organisations could fill (or is already filling) the perceived gap. The ideal situation was to have “choice and cooperation in the community sector, but not competition or duplication”.   More collaboration between organisations is also important, and funders can help encourage this.

 Reduce Compliance costs: This is hot topic and funders are asked to:

  • standardise reporting – perhaps by creating a standard framework for measuring outcomes – and/or allow for tiered reporting based on the size of the grant
  • understand the significant time and resources that go into applying for funding and measuring outcomes and keep these requirements manageable and proportional
  • use two-step funding where full funding proposals are only required after a shortlisting process (although ideally there should still be some opportunity for face-to-face meetings even before short-listing)
  • provide more multi-year funding

Finally, funders are asked to be accountable too. It is hardly fair to demand accountability from grantees if this is not reciprocated – funders too need to be accountable to both their donors and the communities they serve. For example it is useful to have transparency regarding:

  • what and who is funded
  • how decisions are made and how decision makers are appointed
  • the costs of running the funding organisation

Thanks to members to the Fundraising Institute for providing these useful suggestions and for the opportunity to explore these together.

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  1. Thank you Kate, for your presentation and blog response. FINZ has a primary role to foster better fundraising practice and maintain ethical standards. As practitioners, fundraisers want the best for the charitable causes they work with.
    We would encourage more engagement between charity leaders and funders, willing to think and work beyond their current boundaries and ‘patches’ to develop better approaches to both doing charity and philanthropy.

  2. Kate, it was a great presentation, enjoyable and thought provoking . Thank you.

    The big challenge in New Zealand seems to be individual giving, which I assume from your figures must be around 58% including bequests. (In your presentation you had said corporate giving is 6% as well as the 36% figure for trusts)

    Giving USA 2014 indicates that in addition to the figures you give for trusts (15%) and corporates (5%), 72% of philanthropic funding is from individuals and additionally 8% through bequests.

    The best figures I could find to the UK are from a PowerPoint presentation from the UK Centre for Charitable Giving and Philanthropy for 2011, which shows individuals as 71% bequests at 12% foundations at 14% and corporates at 3%.

    Increasing Individual Giving including legacies is, in my personal opinion an important challenge that both Philanthropy New Zealand and FINZ would be very effective in taking on together

    1. Thanks John for this interesting response. Yes you are correct that individual giving was 58% of NZ giving last time Philanthropy NZ measured this in 2011 – we hope to commission a new research project early next year (pending funding) which will provide more up to date figures. And it would certainly be good to encourage more personal giving – another thing which PNZ is working on and with some success. It is worth noting however that the NZ philanthropic scene is different from the US, Australia and the UK in that we have a large proportion of so-called “statutory trusts” – ie the community trusts, energy trusts, gaming trust, Lotteries etc which are set up by law rather than anyone reaching into their own pocket. And of course we are lucky to have them – in particular setting up the community and energy trusts in the 1980s was very far-sighted in my opinion. What this does mean perhaps is that it might not be so much that we have less personal giving in NZ but rather more philanthropic giving. It would be useful to analyse this more maybe…

  3. Thanks Kate,
    I’ve valued your perspective and the insightful Powerpoint presentation linked from it (no, I wasn’t in Auckland, just online). In presenting the ‘thorny issue of funding for outcomes’, your call for “constant learning” jumped out at me. From my place within a grant dependent community organisation, constant learning is the reality, but we’re beginning to see donors becoming more aware of the moving game in working for sustainable outcomes. Notably, in the increasing recognition and capacity building directed towards social enterprise efforts. Not all services can work through incorporation of business ethos of course, but there’s no longer a clear line between charitable services and business practice.
    The call for “choice and cooperation in the community sector, but not competition or duplication” is also something I’m grateful for and I think this principle could help guide decisions to achieve positive community outcomes over the long term.
    And finally, one of the most innovative things I think that has happened in the past few years was the Hikurangi (now Akina) Foundation’s first stage work on funding a diversity of ‘hubs’ around NZ. Essentially that was a simple in-depth survey and quasi ethnographic appraisal of the health of the community sector in NZ, which I’m sure has informed Hikurangi going forward as Akina, but has also helped others understand the diversity and strengths already present, and where the gaps lie.

  4. Kia ora Kate and John

    I always find the comparisons between Aotearoa New Zealand and other countries interesting when it comes to personal giving, particularly the States.

    I believe the government funding environment and our cultural response to it plays a large part – there is a real mismatch about the expectations and responsibility both have.

    In the States the welfare net is not as comprehensive as here in NZ, and those that can afford to give do so as a matter of course. Anecdotal evidence I know, but from my US friends I hear it is not a matter of do you give to charities, but more a question of how much and to how many.

    With many NGOs increasingly seeking philanthropic funding to top up or even fully fund expected core services, more dialogue between all concerned: Trusts, donors, charities and government about the shift in responsibility for NZ’s welfare state is needed.

    The recent Comvoices survey, while subjective does highlight how much the charity sector is hurting and adds another perspective as to why the grant funding sector is so competitive.

  5. Thanks Scott and Sarah – thought provoking. Particularly thought provoking was the commvoices survey, which somehow passed me by. Particularly worrying was the finding that “60% are not prepared to speak out publicly”. How do we change this? Hard to get change if organisations are not prepared to speak publicly, but difficult to speak publicly if funding may depend on not doing so. Catch 22…

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