In Australia the not-for-profit sector is undergoing significant regulatory reform. The establishment of the Australian Charities and Not-for-profits Commission in December 2012 highlighted the increasing importance of transparency and accountability, while the growing interest by funders, including government, in social impact has increased the need and visibility of evidence and, inevitably, data.
With this in mind, the Centre for Social Impact and the Asia-Pacific Centre for Social Investment & Philanthropy undertook a joint project to analyse the grants of 12 leading Australian philanthropic foundations over the three-year period from 2009 to 2011 to understand where the money goes. And yes, we undertook this project knowing the much-quoted truism: ‘if you’ve met one foundation, you’ve met one foundation’, and the challenge of comparing data from one foundation to another!
With the lack of mandatory reporting in Australia until very recently, these 12 foundations had proactively made their grants public over a number of years using best practice reporting. They have demonstrated great leadership, showing the way for others, and I applaud them for doing so.
The resulting report, Where the Money Goes: Private wealth for public good, supported by the Myer Foundation and the Telstra Foundation, provides a high-level analysis of some 4,119 philanthropic grants totalling AUD$207.3 million by issue, sector and funding area.
Key observations include:
- Since the global financial crisis there has been a reduction in the total monetary value of grants made by these foundations down from an average of AUD$6.69 million per foundation in 2009 to AUD$5.06 million in 2011.
- Generally these foundations combine a few very large multi-year philanthropic grants with a relatively extensive small grants programme. The breadth and number of organizations funded is much greater than anticipated. The majority of grants are small and fragmented: some 80% of grants are for less than AUD$50,000 and 36% for less than AUD$10,000.
- The cause areas that received the most funding were: Health Wellbeing & Medical Research 23.6%; Poverty & Disadvantage 16.8%; Indigenous Programmes 10.9%; and Arts Culture & Humanities 10.7%. At the other end of the spectrum only 1% of funding was directed to Aging Futures.
- Over this three-year period 25 grants for AUD$1 million or over were made primarily for capacity building and the establishment of new centres of expertise, although some of these large grants were for capital projects, endowments, research awards and large projects.
- Many organizations are supported by multiple grants from different foundations. 24 organizations received more than 11 grants each, totalling 481 grants, over three years with a combined total of AUD$48.32 million – a large amount of grant funding in a relatively short amount of time.
Despite these multiple grants, there are only a small number of co-funded projects and there is little evidence of collaboration. The impression is that each foundation chooses its own focus and deliberately develops its own independent funding programme. As a result, strong partnerships are built with individual recipient organizations rather than with other foundations.
However, the most striking impression is that most foundations don’t use their data effectively. Indeed most found it an issue to access their data in a ready format. Stakeholder workshops highlighted the fact that most staff don’t really know how to use the data they have and the possible uses of comparative data. Given the extensive amount of detail collected by foundations, over time, on the projects they fund, there seems to be a wonderful opportunity to make much greater use of this data not only to inform the individual foundation’s grantmaking but also to feed into the wider philanthropic and not-for-profit sector. Better data can potentially enable foundations to avoid duplication in their grantmaking and to identify underserved communities and geographic regions.
For this project, with no pre-existing public database on philanthropic grants, we individually collected, collated and entered the information – a long, expensive exercise. It has also highlighted the need for one agreed grants classification scheme!
The future of a sustainable database relies on identifying sources of data and other databases in a user-friendly format, collected in a cost-effective manner. One suggestion by Lucy Bernholz is to use an aggregate pool of online grant applications to foundations and other funders as a data source.
The report has attracted lots of interest from both the philanthropic sector and the wider community. Importantly, where there are some reservations, particularly around the use of comparative data, the report is provoking considerable discussion. Watch this space!
Gina Anderson is the Philanthropy Fellow at the Centre for Social Impact at the University of New South Wales.