Hallmarks and Next Steps for Australia’s Philanthropy: Coming of Age as a Business #PhilAus12


Genevieve Timmons photographed by Ian McKenzie 2007

Last week I attended the Philanthropy Australia biannual conference in Sydney entitled ‘Making Philanthropy Our Business”. Genevieve Timmons, Philanthropic Executive for Portland House Foundation, and Deputy Chair of the Inner North Community Foundation presented at one of the concurrent sessions and has been very generous in sharing her speech with us. Genevieve has more than 25 years experience in philanthropy having been a Senior Fellow in 1999 with the Johns Hopkins International Fellows in Philanthropy, a board member of the George Hicks Foundation, Grants Adviser for the Merrin Grenet Foundation, a board member at the Victorian Foundation for Survivors of Torture, Board member of the Fellowship for Indigenous Leadership and a Fellow of Leadership Victoria. She started in early 1988 with the Reichstein Foundation, and spent 8 years before that working in the not for profit sector, notably as the founding staff member of CERES in Brunswick.

Here’s what she had to say:

In the last 25 years philanthropic grantmaking has emerged as a relatively new industry, both in Australia and across the world. Giving is not a new concept, and in fact goes back as far as recorded history can take us. But it is only in the last three decades that an overhaul of the traditions of philanthropy has transformed giving, moving on from often random acts of generosity, guided by hunches and good intentions, to more thoughtful and deliberate strategies for giving money for social progress and benefit.

Early pioneers in Australia established a membership organisation in the late 1980s, the Australian Association of Philanthropy (AAP), now known as Philanthropy Australia. AAP joined just a handful of membership organisations across the world, including the Council On Foundations in the USA (established 1949), the Canadian Centre for Philanthropy (mid 980s) the European Foundation Centre (1989), the Association of Charitable Foundations UK (1989), and Philanthropy New Zealand (1990). From this small group of leading organisations, there are now thousands of membership organisations globally with a focus on developing the quality and breadth of philanthropic giving.

With the leadership of Philanthropy Australia and their international peers came the first collective sense of philanthropy as a public, structured activity, a notable turning point. Thoughtful, planned giving has become widely recognised as the remit of philanthropy, along with an increase in the numbers of people involved as donors, staff or trustees of foundations and trusts, allied professionals, and also as grantseekers and fundraisers. Momentum has also been added by an array of new giving structures, services and organisations to facilitate giving, new legislation and approaches to marketing. Most important, in the last 25 years there has been a substantial increase in the amount of money being given as investment in social progress.

There are several key features of contemporary philanthropy that are hallmarks of our growth and maturity today, and that present rich challenges and opportunities to accelerate our progress in the time ahead:

• Strengthening our claim as a profession
• Understanding our place in a civil society
• Optimising the value of grantee relationships
• Learning about and understanding our impact
• Working with and being led by the next generation

Each of these is worthy of detailed consideration and analysis in their own right, but it is beyond the scope of this paper to do that justice. I want to simply signpost them as a collection for us to bear in mind, and to keep alive in future discussions and exchange.

1 STRENGTHENING OUR CLAIM AS A PROFESSION
There are numerous milestones which mark the growth and maturity of philanthropy, coming from a mysterious and small base to where it is today. The current scale and complexity of activity is a radical transformation from 25 years ago. Clearly our sector has taken shape, but are we ready to be called a profession? And what is required to qualify? In recent discussions with Wendy Scaife, from the QUT Centre for Philanthropy, she raised the point that there are requirements for any field of endeavour to qualify as a profession. To be called a profession, there is an expectation of service and standards that can be predicted, requiring agreement on what these standards are and assurance that regardless of who the individuals may be, there is confidence in practice and service.

The following definition is helpful in understanding what constitutes a profession:
‘A disciplined group of individuals who adhere to high ethical standards and uphold themselves to, and are accepted by, the public as possessing special knowledge and skills in a widely recognised, organised body of learning derived from education and training at a high level, and who are prepared to exercise this knowledge and these skills in the interest of others. Inherent in this definition is the concept that the responsibility for the welfare, health and safety of the community shall take precedence over other considerations.’ (Dr John Southwick, ‘Australian Council of Professions’ Perth, April 1997)

While we all have different and contrasting approaches as grantmakers – and long may these differences live – there is now more consistency in expectations of each other, we talk about ‘we’. It is a cause to celebrate that there is so much we have in common, explicit features and frameworks of core business, accepted practice in the philanthropy sector.

For example:
Philanthropic grantmakers enjoy centralised information, access to relevant resources and research, provided to a large extent by Philanthropy Australia and complemented by other organisations across the world, including the membership organisations mentioned earlier. Looking beyond Australia, I have derived particular benefit from the work of Philanthropy New Zealand, and the collection of trusts and foundations which make up their philanthropy sector have been a great source of enrichment – I salute my colleagues, particularly Jenny Gill and Robyn Scott who have been the backbone of sectoral development in New Zealand over many years. In other countries, Stephen Burkeman in the UK, the Council on Foundations, Grantcraft, Stanford Social Innovation Review in the USA, WINGS in Brazil – there are no doubt many more that others would want to acknowledge.

We have specialist courses and training, for example at QUT Australian Centre for Philanthropy and Nonprofit Studies, and the Asia-Pacific Centre for Social Investment and Philanthropy at Swinburne.

We have formal and informal exchange, and professional development opportunities – conferences, plus workshops and seminars, visiting scholars and practitioners, facilitating and debate on issues of importance to us all. I cannot emphasise enough the value of colleagues’ generosity in sharing questions, gems and ideas that have been useful, and the challenges we wrestle with. If there is any one ingredient that will equip and strengthen our sector, and ensure grantmaking reaches its greatest potential in the future, I believe it is this commitment to exchange.

We have deliberate peer networks with specialist focus on how and why we give, exchanging information and transferring knowledge. The wide collection of affinity groups and special focus organisations such as the Women Donors Network, Changemakers, Woor Dungin, Jewish Funders Network and Australian Environmental Grantmakers Network – no doubt there are more. Community foundations such as the Inner North Community Foundation and the Australian Communities Foundation also make a deliberate contribution to this work.

We have more clarity than ever guiding operations and governance, with job descriptions and staff titles, explicit governance roles and responsibilities, tax legislation….. We have databases and tracking systems, grantmaking cycles, websites and, grant agreements and annual reports, all of which may differ but are easily recognised across the sector as common practice.

We have been present at the table with governments over many years, again through Philanthropy Australia, ensuring a voice to government for inquiries and legislation and preparing submissions to ensure changes are responsive to our sector.

There is a growing interest in funding partnerships and collaborations, between grantmakers and across sectors with government and business. The recent launch of the Victorian state government Guiding Principles for Collaboration between Government and Philanthropy is the most recent example of this.

These are just some of the core features and frameworks of our work as grantmakers today. While it is beyond the scope of this paper to make the case for or against philanthropy as a profession, it is a timely and useful question to be asking whether we qualify, and if not, what more it would take.

2 UNDERSTANDING OUR PLACE IN A CIVIL SOCIETY
Understanding the place of philanthropic grantmakers in the context of a civil society is another hallmark of our sectoral maturity. Clarity on where we fit in wider society is essential for effective engagement with governments and corporations, and to understand the collective funding and policy impact for not for profit work. It is also essential when defining relationships with the not for profit sector, and individual grantee partnerships.

Hopefully most of the mystery around the term philanthropy has been dispelled and we have moved on from a time when philanthropists could be mistaken for stamp collectors or flirts – as observed by John Prendergast (Community Trust of Southland, NZ) when noting the term sits in the dictionary between philanderer and philatelist.

A civil society is made up of three pillars – the non-profit or community sector, the government sector and the commercial sector. All three of these sectors generate money in support of not for profit work, and in each case the application of this money is influenced by the different policies, culture and accountabilities of each. There are important distinctions in the purpose of giving as a result.

Our responsibilities are grounded in the unique and creative capacity of philanthropic giving to provide funds which go beyond the concerns of government, free from accountabilities to a political constituency and votes of taxpayers; also free from the constraints of commercial business, having to raise profits and account to shareholders. This is a distinct point of leverage, a strategic place in a civil society to improve the wellbeing of humanity and the community.

There are examples of where this strategic positioning has been quantified eg in the USA in the 1980s, there were government decisions being made to shift responsibility for public housing and homelessness into the Independent sector, to be funded by the churches, welfare organisations and philanthropic sector.

Statistics show that philanthropic grants make up a relatively small percentage of income to the not for profit sector. In 2006-07, not-for-profit groups in Australia received $76.6 billion in income, with 33% of that from government grants, 30.5% income from services, and 9%, or $7.2 billion, through donations, fundraising and sponsorship. An estimated 5000 foundations in Australia are giving between half a billion and one billion dollars per annum. The philanthropic dollar may be only one in a hundred, but the influence as grantmakers is not about the scale of the dollars, so much as the way in which social investment is approached. Philanthropy can and does do more than serve as an additional source of money to be tapped, another drop in the funding bucket.

Harnessing the best of corporate thinking through philanthropy continues to be one of the great opportunities for growth and strategic giving. The trend towards ‘giving while living’ has sharpened the strategic positioning for philanthropy, bringing forward a group of intelligent and capable philanthropists from the corporate world, both in Australia and across the world. Philanthropy is rightly seen as the sixth form of investment, and giving matched with business acumen and drive can have powerful results. Peter Scanlon and the work of the Scanlon Foundation on social cohesion is just one outstanding example among many.

Another example is in the aftermath of the Black Saturday bushfires north of Melbourne in 2009. Portland House Foundation, along with Twiggy Forrest and others, moved quickly to support people in Flowerdale – listening to local people who had fought and survived the fires and wanted to get started rebuilding their community. By responding to their urgent, immediate appeal to establish their own temporary village, the Flowerdale community was able to get started and lead the rebuilding of their community. While this support was ahead of government, who carried the major responsibility for the disaster response strategy, it ensured that the community could eventually tie in with government resources as the disaster recovery was rolled out, and the Flowerdale community was hailed as one of the shining examples of resilience in rebuilding.

The optimal positioning for philanthropy is to be recognised for thoughtful and informed approaches, openness to discussion and development of ideas, and willingness to carry risk in the hope of finding solutions for some of societies’ most intractable problems. Also to be known for a capability to build rich and productive relationships with grantees, peers in the sector, government, corporations – and be capable of nimble, decisive funding partnerships. What this takes and how it works is still in the mix, another challenge continuing into the future.

OPTIMISING THE VALUE OF GRANTEE RELATIONSHIPS
Healthy, efficient relationships with grantees are another critical hallmark of contemporary philanthropy, where trust, mutual commitment to outcomes, and shared learning are the basis for the transaction. Philanthropic giving can only ever be as effective as the people who manage and spend the money, and how grantmakers engage with grantseekers can make or break intended outcomes. The way in which relationships are established inevitably depends on available resources, time and expertise of the grantmaker.

Research was undertaken as part of my Fellowship at Johns Hopkins International Fellows in Philanthropy Program in 1999, where a set of stereotypes of funding partnerships were identified, illustrating various levels of engagement, confidence and trust :
• Poacher & gamekeeper
• Patron and supplicant
• Social venture capitalist and social entrepreneur
• Hand in hand
• Hand in glove
• Noses in, hands behind back
• Autoteller

How relevant are these stereotypes 12 years later, either to grantmakers or to grantseekers?

Refinement of the funding relationship and advancing the quality of the relationship can be guided by this checklist of questions to grantmakers :
• APPLICATION PROCESS
Are grantmaker processes draining valuable time and resources of not for profits, chasing funding that costs them too much or that they won’t receive? What is the average percentage of applications received that are funded, and the percentage that are rejected? Can the process of applying for grants be made more lean and efficient for grantseekers?

• COMMUNICATION
Are there opportunities for open communication and mutual learning while the grant is being spent? Is there an appropriate level of trust and confidence in the grant recipient as the manager of funds? Does the funding relationship build on the skill and acumen of non-profit organisations?
• REPORTING AND MUTUAL LEARNING
Can reporting on outcomes, managing problems and making mid-course corrections all be done in a timely and efficient way? How are lessons captured and built into future funding decisions?
Are funding cycles long enough for effective relationships to be built, and useful outcomes to be
delivered?

These are just a few of the questions that have led grantmakers to streamline and develop new approaches to the funding relationship. As executive with the Portland House Foundation (PHF), and also as a board member with the Inner North Community Foundation, it has been possible to strengthen the grantee relationship in a number of ways without requiring excessive demands on time and resources. In fact it is to the relief of all involved that there are now established ways of exchanging information and monitoring progress that are nimble and time efficient for both the grantmaker and the grant recipient.
Example : PHF terms of the grant agreement include explicit expectations of the relationship :
Efficiency
• Respect for time and resources
• Appropriate and relevant documentation, ‘low docs’ approach
High level of trust
• Mutual agreement on plans for appropriate expenditure of grant
• Open and responsive communication with regular face to face contact
• Willingness to flag problems and negotiate mid-course corrections
No surprises
• Mutual agreement on Foundation Charter and Cluster Funding approach
• Consistent relationships with key individuals over time
• Positive management of any transition and changes within organisations
Learning and development
• Willingness to build capacity and exchange knowledge with peers
• Participation in roundtable discussions focus on key innovations, learning and good practice
• Willingness to explore relevant partnership opportunities with other PHF grant recipients

Example : Round table group reporting sessions have been organised with grantees of the Portland House since 2004, and have been well received by all involved. Brief verbal reports are given by up to 8 – 10 grantees at a time, sharing their progress, highlights and challenges with the Foundation and with each other. These reports are accompanied by written information where appropriate. In addition to reporting, the sessions provide grantees with opportunity to share skills and information, form partnerships and learn about related initiatives addressing disadvantage in the non-profit sector.

Example : Showcasing grantee work Portland House Foundation, the Inner North Community Foundation, the Reichstein Foundation and the Australian Communities Foundation are among a growing number of grantmakers who have made a priority of showcasing the work of grantees in public events, inviting peer grantees, donors and other potential supporters to hear face to face about not for profit work being done.

3 LEARNING ABOUT AND UNDERSTANDING OUR IMPACT
Surely the questions any grantmaker would want to be able to answer is “Did we get the
results we intended from our funding?” “Did we add value to people’s lives and what did that look like?” “Are there ways we can improve on what we have been doing?” This challenge to know what impact grants have and to learn from what has been achieved is possibly the most significant, faced by both grantmakers and grant recipients. In order to arrive at answers, there must be :
• in-depth information available on grants given
• a logic and method for sorting and classifying this information
• analysis to understand outcomes and identify lessons learned.

Harking back to history again, in the late 1980s and early 1990s, there were early efforts to bring together information on what was being funded with philanthropic dollars in Australia, led by the Australian Association of Philanthropy with the Reichstein Foundation, the Stegley Foundation, the Myer Foundation, ANZ Trustees and the Helen Schutt Trust, (now the Helen MacPherson Smith Trust). As colleagues we gathered information on what had been achieved with funding, and produced the earliest annual reports, to promote funding outcomes to the wider public. This involved follow up with grant recipients, many of whom were delighted to be asked about their outcomes and achievements, and to know that their work would be noted and promoted by grantmakers for the first time. Since this early pioneering, annual reports from grantmakers have become accepted common practice, and the wave of new communication technologies has brought with it websites and electronic media, providing a rich and rewarding window on work done by not for profits with philanthropic support.

As this public information started to build, our early group of pioneers also discussed the possibility of developing a data set and common language among grantmakers, to describe individual and collective philanthropic granting in Australia and identify the funding trends. This would provide valuable information on the fields of interest, target groups to benefit, size of grants, geographic location and types of structure funded, and show priorities and gaps. These first efforts to codify giving were problematic, because technology was fairly undeveloped, the task was time intensive and possibly costly, and it was difficult to agree on a common coding and classification system that made sense and worked for everyone:

Example : The challenge of classifying a grant for Somebody’s Daughter Theatre Company, a theatre company for women in prison? Some might classify it as arts and culture because it is theatre, or law and justice because it is to do with the justice system, or education because it involves skills development, or advocacy because it gives voice to women in prison …..

Progress has certainly been made since this early wrestle with the idea of a common classification language, and most grantmakers now have some form of database to track critical information. Technology has delivered an array of software tools to record and track funding by individual grantmakers. Philanthropy Australia and Philanthropy New Zealand both offer a menu for establishing a database, and there are various simple and complex commercial packages also available to manage granting at every stage, and deliver detailed information as required. Collective data on specific areas of funding is quoted occasionally from the sector, eg the total amount given as scholarships, levels of funding for a natural disaster, or philanthropic dollars directed to a particular issue such as mental illness. And the Australian census and tax figures can add to the picture. But ultimately, provision of the information is voluntary, figures are often out-dated, estimates are very broad, and not comprehensive.

The challenge remains for the philanthropic sector to be able to aggregate comprehensive and consistent information about what is funded and for whom, and to speak collectively about funding trends, gaps and priorities. When this is achieved, it will also be a significant contribution to transparency of giving. The work of Glass Pockets, a website created by the Foundation Center in the USA, advocates greater transparency in philanthropy, and illustrates the value and some of the current thinking behind public information and accountability for grantmakers.

As the amount of public information on philanthropic activity has grown, so too has interest from researchers, policymakers and not for profits. This interest has sparked a call for grantmakers to move to the next frontier of understanding the impact of funding, through monitoring, assessment and evaluation. Grantmakers have responded in a variety of ways :
• Establishing internal data collection systems
• Contributing to collective efforts to gather and share information with peers
• Building in requirements that projects be evaluated as part of the funding agreement
• Funding grant recipients to undertake evaluation and monitoring, to clarify the outputs, outcomes and opportunities generated from their work
• Hosting opportunities for grantmakers and grantseekers to share information and lessons learned
• Contributing to formal research and dissemination of information
• Undertaking internal reviews and strategic analysis of grantmaking activity, and disseminating this information

Example : Measuring outputs, outcomes, opportunities…. of the scholarships programs – yes, we funded 43 young people to attend school with bags, books, musical instruments, sporting equipment and to participate in school camps. Did the young people succeed at school? Was succeeding at school their best option? Did they realise more of their potential and talent as a result of having the scholarship? Did their opportunities change for them in the future? Did any of them end up representing Australia at the United Nations, or at the Paralympics in the ten years after that? Or perhaps they ended up in prison like their father and grandfather before them. Can we establish whether the scholarships are the best place to focus? Or are there other ways our money could be applied to accelerate the progress and help these young people be happy and fulfilled, and be the best they can be? We need to keep digging and know these things in order to understand whether what we funded was worthwhile and whether it was successful?

Example : Internal strategic reviews have been done in the last 15 years by a number of grantmakers, to clarify progress, identify strengths and opportunities, and agree on future priorities. Information has been made available from some of these extensive reviews, including the Reichstein Foundation and the Myer Foundation in Australia, and the ASB Community Trusts, the Community Trust of Southland, the Whanganui Community Foundation and J R McKenzie Trust in New Zealand.

This monitoring and assessment has inevitably increased demands on time and resources of both grantmakers and grant seekers, which are required when the task of monitoring and assessing is taken seriously.
The approach of the ‘learning organisation’ has become more important among grantmakers and not for profit organisations, seeking to be :
“ ..an organisation that learns and encourages learning among its people, promotes exchange of
information .. creating a more knowledgeable workforce .. where people will accept and adapt to new
ideas and changes through a shared vision.”

The challenge for the future regarding learning is to remain curious and be willing to keep asking questions, to understand the tools and systems that can be applied, and work together to share and add value. The benefits accruing are that we remain agile and informed as organisations and as a sector, equipped to move with the economic and social changes that are part of our landscape and capitalising on the best use of every dollar invested.

5 WORKING WITH AND BEING LED BY THE NEXT GENERATION
The last of the hallmarks in philanthropy to note today is the challenge to ‘lift as we climb’ with generations coming along behind, to ensure that creativity and leadership by younger people is valued and celebrated in philanthropy. Recruiting and involving young people is an obvious priority for many family foundations, and also boards and staff teams seeking to be representative; to build with new ideas and fresh perspectives; and to ensure smooth succession in governance and operations.

Barriers to younger people engaging with philanthropy can be juggling time across a myriad of activities such as study, travel, starting careers and earning a living, establishing personal relationships, sometimes parenting, and enjoying social networks. In addition to these ‘time of life’ issues, opportunities for involvement with philanthropy may not be relevant or attractive to younger people. There must be open doors for direct involvement of young people with grantmaking, appointment as board members and advisors, pursuing personal not for profit interests and linking these interests with funding. Most important is ensuring there is open space to bring in innovation and ‘new-style charitability’ a term used by a young social entrepreneur, Will Dayble who runs a company called Squareweave in Melbourne.

Will is one of many in his generation who see giving as something everyone can do, with small amounts of money and judicious use of time. Will is investing serious time to develop web based applications which are the new understood method for innovations in giving, making everything around charity more efficient and cost effective. Crowd funding, promoting social enterprise and better targeted international giving are just three examples of new approaches to giving, engineered by young people determined to find ways to keep building a better world. All I can say is watch this space, listen to their new ideas, learn their language, and follow their lead as the next generation put their stamp on philanthropy. ….. the sky is the limit.

Example : “Crowd-funding” is a new model of raising funds, most famously used in Barack Obama’s Presidential campaign. Recently a family in Midland, outside Perth was able to raise over $600,000 through crowd funding, for their First Home Project. The couple’s aim was to buy a large building, where they could live and continue to share their home with asylum seekers and people in desperate need. The banks had rejected their application for a loan, so they put an appeal out on the internet. Astonishingly, within 13 days, the full $600,000 had been pledged in loans and donations, from many people who read about their plan and had confidence in them. A quarter of the funds are made up of donations, the remaining 75 percent is comprised of loans.

I hope this paper has prompted more thought on where we have come from and where we are headed in philanthropy, and the hallmarks of contemporary philanthropy that are important to you. I also hope that there has been something of value that you can take away to accelerate your progress.

I wish to acknowledge the rich and rewarding exchange with my colleagues and peers both in Australia and New Zealand, and also my international colleagues in the Johns Hopkins International Fellows in Philanthropy Program, active across 50 different countries

About ozphilanthropy

#Philanthropy. Posts by Sharon Nathani. Consultant, blogger, speaker & committee member/grantmaker @Impact100Melb and Melbourne Womens Fund. Board member at Outer Urban Projects. Learning more to share with you through Grad Dip in Philanthropy and Nonprofit studies at QUT and Masters in Social Investment & Philanthropy at Swinburne. Former Executive Officer Inner North Community Foundation.
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