Smaller NFPs successfully competing for funding: Perpetual
Wednesday, 18th August 2010 at 1:18 pm
Smaller Not for Profits are just as competitive in receiving funding as their larger counterparts, according to philanthropic fund managers Perpetual, which has recently announced the recipients of over $9 million in funding from its discretionary trusts.
More than 900 NFPs applied for funding from charitable trusts managed by Perpetual, and were assessed against the parameters of strategy, outcomes, capability and leadership.
In its national analysis of funding applications, perpetual says successful recipients varied in size, from local organisations with $30,000 annual revenue, through to national organisations with multi-million dollar community groups.
Andrew Thomas, Perpetual’s General Manager, Philanthropy, says the lean structure of smaller players often gave them an advantage in drafting their application.
Thomas says small organisations are able to clearly and concisely articulate their strategy just as well as some larger organisations and whilst larger organisations often have the advantage of scale, smaller organisations are often more agile and able to articulate a clear and measurable outcome.
The funding round analysis also found that despite the nation showing strong signs of economic recovery, many NFPs don’t appear to be sharing the spoils. The number of applications received increased by 23% since 2008 and the average amount requested rose by 37% (from approx. $55,000 in 2008 to $76,000 in 2010), as organisations struggled to make up the shortfall in donations and investment returns.
Thomas say when the economy slowed down, many NFPs saw a decline in donations as a result and this was often coupled with a decline in investment income, if they relied on returns from capital reserves.
He says this situation underlines the need for a very considered, conservative approach to investment for such organisations.
He says Perpetual’s charitable trusts avoided the worst of the GFC maintaining investment income, and therefore the amount of funding distributed to organisations in the community.
Perpetual’s analysis also found that while the majority of Not for Profit organisations were able to articulate their value proposition, they often struggled to identify measurable outcomes.
Perpetual found that NFPs tended to be good at describing who they are and what they’re working to achieve. However, there was less understanding of how to measure this against key performance indicators.
Andrew Thomas says Perpetual recognises that social outcomes can’t always be given a dollar value, but
measurement parameters can still be put in place, for example what will be done, when will it be achieved, and how many people will it help? Also, how efficiently are resources deployed?
He says this is an area which Perpetual expects to improve as NFPs become more sophisticated in their operations, governance and reporting.
The funding applications also revealed low levels of awareness about risk on both an organisational and project level.
The analysis found that funding was often cited as the only risk, when in fact, other factors need to be considered such
as public policy decisions, broader sector activity, staffing and resourcing.
Thomas says that in fact, attracting, recruiting and retaining quality staff came up repeatedly as an external risk,
and Perpetual sees this as one of the most pressing issues facing the Not for Profit sector.
Applications came from a broad range of organisations, covering arts & culture, through to social welfare, however, the analysis showed that applicants in the conservation & environment and medical research sectors defined their strengths most effectively.
He says some organisations seem to be more effective in articulating their strategy, capability, leadership and outcomes, which are key elements Perpetual considers when assessing applications for funding.
Overall, Perpetual’s 2010 funding round provided over $9 million in funding to 200 organisations across Australia in areas such as arts and culture, health, conservation & environment, social welfare, education and medical research.
Perpetual is the trustee of more than 450 charitable trusts with over $1 billion in funds under management.
For more information go to www.perpetual.com.au/philanthropy