Capacity Building - The Other Side of the Philanthropy Equation

It’s time to start a broader conversation about how government can support the capacity of Not for Profits to engage with philanthropy writes Krystian Seibert, Policy and Research Manager with Philanthropy Australia.

In policy debates about growing philanthropy in Australia, we often focus on the ‘supply-side’ – how new taxation arrangements or improved regulatory frameworks could encourage more giving. This is understandable because although we have a pretty good ‘supply side’ framework in Australia, there’s always room for improvement.

Philanthropy Australia outlined a number of these improvements in our ‘Early Wins to Grow Philanthropy and Its Impact’ submission to the Prime Minister’s Community Business Partnership. The Australian Government has already agreed to implement two of these Early Wins, which is great news.

But growing philanthropy can’t just be about increasing the amount of giving. Amongst others things, it also needs to be about ensuring Not for Profits can access this giving. That’s what I call the ‘demand-side’ of philanthropy.

Part of this is about taxation arrangements or regulatory frameworks – for example which Not for Profits can obtain Deductible Gift Recipient (DGR) status, which was the topic of one of my previous articles.

But it’s also about capacity building.

Philanthropy in Australia still has a mysterious aura around it. Many Not for Profits know it’s there, but many also don’t know how to access all or part of its many different streams. It’s like an aquifer running under your land – it’s great to know it’s there but unless you can dig a well then the flowing water isn’t much use to you.

An innovative, vibrant, sustainable and independent not-for-profit sector can only benefit from philanthropy if they know how to tap into it – more importantly, this is also the only way for our community to benefit from philanthropy.

That’s why building the capacity of Not for Profits to engage with philanthropy needs to be a priority.

Many organisations are geared towards building this capacity. As philanthropy’s peak body, Philanthropy Australia has a focus on capacity building – for example in late May and early June we’re holding a series of workshops focusing on how Not for Profit boards can more effectively engage with philanthropy.

But there’s a question as to whether there’s a role for Government to support such capacity building. I think there is.

Capacity building is an investment. It requires time, resources and money to develop and implement strategies for accessing philanthropy. This is an investment many Not for Profits, and small ones in particular, are unable to make. This may be because of a lack of knowledge and skills, or a lack of funds especially when starting out.

This ‘under-supply’ of capacity building investment will inhibit their ability to engage with philanthropy. This will in turn inhibit their ability to grow and innovate.

It’s a bit of a vicious circle – you need investment to grow and innovate, but without the funds that come from growth and innovation, it’s hard to make the investment!

Governments of all political persuasions talk about the benefits of a vibrant and sustainable Not for Profit sector, and for good reason.

But Government also has limited funding which it can direct towards Not for Profits , and in any event neither Government nor the Not for Profit sector wants a situation where organisations are too dependent on any one source of funding, including government funding.

The ‘under-supply’ of capacity building investment within the Not for Profit sector provides an argument for some form of government support for capacity building, to enable Not for Profits to engage more effectively with philanthropy. In terms of what kind of support they can provide, looking at what government is already doing is a good place to start.

In 2003, the Howard Government established ‘Artsupport’, an organisation set up with the sole purpose of growing cultural philanthropy. The Artsupport model involved working to strengthen the capacity of individual artists and cultural organisations to secure philanthropic income.

During its 10 years it facilitated around $80 million in new philanthropic income for the cultural sector.

In 2013, it was merged with the Australia Business Arts Foundation to form Creative Partnerships Australia. Funded by the Australian Government, it continues to invest in the professional and business development of cultural sector organisations to maximise their partnership potential and long-term growth, and by working with business and philanthropists to facilitate partnerships and investment.

If Government supports capacity building initiatives within the cultural sector, it’s reasonable to ask why such support couldn’t be replicated in other parts of the Not for Profit sector.

One area in particular where such capacity building initiatives could be of particular benefit is the disability sector. The NDIS is transforming disability support in Australia, but even though it will boost funding towards this important area, the NDIS will still not fund everything.

In moving towards a consumer-directed model of delivery, the need for Not for Profits within the disability sector to innovate will only increase. They say that ‘philanthropy is the risk capital for social change’, but this risk capital can only support innovation within the disability sector if disability organisations can access it.

Perhaps the introduction of the NDIS provides a good opportunity to replicate the success of the Artsupport/Creative Partnerships Australia model in another part of the Not for Profit sector. Of course, there are also other areas which could merit consideration as well.

In any event, it’s time to start a broader conversation about how Government can support the capacity of Not for Profits  to engage with philanthropy – because at the moment it’s the side of philanthropy equation which doesn’t receive enough attention.

About the author: Krystian Seibert is a regular columnist for Pro Bono Australia on philanthropy, public policy and research. He is the Policy & Research Manager with Philanthropy Australia and tweets at @KSeibertAu