Community Colleges Australia (CCA) has encouraged its members to expand their use of philanthropic funding, now worth more than $4 billion each year in Australia.
The significance of philanthropic funding was underlined last week, with the release by the Australian Charities and Not-for-profits Commission (ACNC) of a report on Australia’s grant-making charities, which notes that more than 10,000 Australian grant-making charities hold more than $56 billion in assets.
CCA’s recent report on community education providers and regional and rural economic development highlights the potential role of philanthropy:
Funds provided by foundations and trusts or individuals constitute an under-utilised source for Australian regional and rural economic development pilot projects. Increasingly, Australian foundations and trusts are looking to invest strategically in projects, organisations and good causes. They often wish to provide funds that stimulate long-term increases in social and economic well-being.
“Philanthropic funding must be complementary to government funding, and not replace government’s service role,” said Dr Don Perlgut, CEO of CCA. “Philanthropy can be particularly valuable in setting up pilot development projects that ‘prove’ the case for a more sustained government commitment of resources.”
The CCA report also notes:
Philanthropic donors are often willing wish to fund more “risky” or creative projects; they have been particularly important sources of funding for not-for-profit and social entrepreneurship and incubators. Philanthropic funding can also enable a not-for-profit organisation to diversify its funding base. International experience shows that philanthropic organisations like to combine both thematic and place-based approaches, as a means of “achieving enduring change in larger systems.”
“Most of our member organisations hold Deductible Gift Recipient – known as DGR – status, which enables them to access funds from philanthropic sources and tax-deductible donations from individuals. However, only a small handful of community providers have utilised the full capacity of the DGR. The reasons for this underutilisation are mostly lack of policy and strategic capacity to develop relationships with the philanthropic sector, given the high level of professionalism and competition that exists in Australian not-for-profit fundraising,” Dr Perlgut said.
ACNC Commissioner Dr Gary Johns has commented on the findings of the ACNC report:
“The charity sector is Australia’s second largest employer – of which grant-making charities are part. Our research showed that more than 37% of funding was distributed to organisations through public or open processes, and 14% of grants were issued to rural and regional recipients. Grants are predominantly used to build the capacity and capabilities of a charity, to provide support services or advocate for or against an issue. For example, some grants may support an existing long-term project to completion, while others may help that project to expand in another area in need,” Dr Johns said.
Australia’s Grant-making Charities in 2016 is available to download at australiancharities.acnc.gov.au.