More money, more impact? Not necessarily.

“Philanthropic capital has the potential to drive catalytic systems change in ways that other money doesn’t”

Despite Australia’s top philanthropic organisations doubling the amount they’re giving away over the past five years, the sector faces immense challenges in funding activities that achieve lasting change, new research finds.   

The report, led by the Menzies Foundation in collaboration with Melbourne Business School, University of Melbourne and a consortium of 10 philanthropic foundations, found that a renewed focus on impact, strategy, and evaluation is needed if these additional donations and broader philanthropic supports are to create impactful social change.

Drawing upon a new survey of 84 grant-making philanthropic organisations and 97 grant-seeking groups, the report found there was a big opportunity to provide greater support toward evaluation, capacity building and collaboration activities, rather than more conventional program support – which grant makers continue to do very well.

In the survey responses, the word “collaboration” was mentioned by grant-making organisations at nearly every opportunity. But only 15 per cent said they frequently fund collaboration activities, and 16 per cent said it was among their top priorities. 

Liz Gillies, report co-author and CEO of the Menzies Foundation, told Pro Bono News that while collaboration was hard to fund, it was “fundamental to social impact” that more money was put into the practice. 

To do so, Gillies said philanthropy had to be prepared to fund the things that supported collaboration to happen in the first place; irrespective of what that was. 

“Is it the backbone support for the collaboration? Is it research to identify the system in question? Is it consulting fees?” she said. 

“Rather than philanthropy holding itself to programs that it can tick the box around outputs, collaboration is a much less certain, more adaptive, more complex context.”

Providing opportunities for not for profits to work together – rather than bidding against each other in grants rounds – was something grant-seekers highlighted in the report as a way social impact could be created. 

Change has happened, but not enough

The report builds on 2018 research focusing on improving philanthropic practices. 

Since 2018, steps have been taken by grant-makers to improve relationships with grant-seekers and more funders are providing grant-seekers with non-monetary supports such as access to their facilities or by making introductions to other leaders in their network.

However, fewer philanthropists identified as catalytic or funding highly strategic, systems-change projects, compared to 2018. 

Gillies said this highlighted the need for philanthropists to be braver and more innovative, rather than just making grants to impact programs. 

“It’s fabulous that there’s more money available to support and build a better community… but we can’t be complacent,” she said.

“Philanthropic capital has the potential to drive catalytic systems change in ways that other money doesn’t.

“And there’s just not enough people in philanthropy who are doing the hard yards to build those sorts of platforms and those initiatives.” 

She said given the year we had just had, there had never been a more important time for grant-makers to be thinking outside the square of how they could pitch in a post-pandemic world. 

“The big social issues that are going to get in the way of us building a flourishing life in Australia, and frankly globally, require people to understand how to adapt to that complexity,” Gillies said. 

“Philanthropy has the most extraordinary opportunity to be the facilitator of that.” 

Read a full copy of the report here.