Why Untied Funds are the ‘Most Precious Kind of Philanthropy’

Untied funds are the most precious kind of philanthropy, an Australian charity leader says, after his organisation received a $1 million donation to support core operating and scientific capacity.

The Nature Conservancy (TNC) announced last week they received a $1 million gift from Sydney businessman Robert McLean AM and his wife Paula McLean, to establish a fund aimed at securing the long-term future of nature conservation in Australia.

Rather than being tied to any specific project, this donation will support core operating and scientific capacity.

TNC Australia’s country director Rich Gilmore welcomed the gift, and said untied funds like this were the “most precious kind of philanthropy”.

Gilmore told Pro Bono News untied gifts allowed organisations to do a couple of important things.

“Firstly, it allows us to make an assessment about what the highest priorities are for the organisation to invest in. And often those are not things that would be immediately appealing to a donor [and so] are very hard to fundraise for,” Gilmore said.

“The other reason is that they give organisations confidence to innovate and test new ideas without fear of failure. So many grants are contingent on specific deliverables – which is very important – but having some breathing space to test new ideas really fosters innovation.

“And there’s actually not a lot of grant funding available for R and D (research and development) out there.”  

Gilmore said an organisation needed to build a level of trust with a donor before they could expect an untied gift.

But he noted a growing awareness in the philanthropy sector about the importance of core capacity funding.

“I think in the immediate term, these sorts of gifts are more likely to come from donors who are closer to the organisation and know the people well and know their track record of delivery,” he said.

“But I definitely think there’s an emerging understanding in the philanthropy sector that core operating capacity is a really important part of delivering an organisation’s vision and having a stable and impactful organisation.

“We’re hoping this gift allows TNC to lead by example and demonstrate what is possible, and also hope that others follow suit and have the confidence to do the same.”

Gift-giver Robert McLean, who is chairman of TNC’s Australia advisory board, said innovation was vital to the success of large-scale conservation.

“Donors giving unrestricted funds foster the innovation required to achieve impact at the pace and scale that matters,” McLean said.

Making the gift through their family’s McLean Foundation, his wife Paula added: “We felt that now was the right time to invest further in the long-term capacity of the organisation and invite others to do the same.”

TNC expect other investments will help grow the fund to $7.5 million by the end of 2018, with a goal to reach $20 million by 2020.