Local Government Steps Up on Grant Funding

By Andrew Heaton

(image via Imperial College London)

Local governments around Australia have stepped up their efforts as a source of grant funding not-for-profit sector organisations, the latest survey has found.

Unveiling the results of its Grants in Australia survey findings, non-profit and social enterprise consultancy group Our Community says the proportion of organisations whose primary source of grants funding comes from local governments had grown from just over ten percent as recently as 2012 to around 20 percent in 2016.

Whereas local governments ranked as only the fourth primary source of grants funding for organisations in 2012, they have now overtaken both philanthropic organisations and the Federal Government to now rank second in terms of primary grant source funding for organisations behind state governments.

In terms of sectors, local governments are equal with state governments as a primary source of funding for arts and community sector organisations.

They are also the second most common source of primary grant funding for organisations whose activities revolve around community and economic development, environment and sports and recreation.

Whilst state governments dominate as a primary source of funding for medium and large organisations, meanwhile, local government ranks almost equally with state government as a source of primary funding for small organisations.

Overall, however, state governments remain the primary source of grant funding for around four in ten organisations.

The survey also revealed that:

  • Large amounts of time are being wasted starting but not finishing grant applications. In total, 54 percent of respondents indicated that they had started a grant application which they had not ended up submitting. Reasons for this included simply running out of time to complete the application, discovering that the grant program was not suitable for the organisation, not meeting eligibility requirements and forms being too difficult to complete.
  • Large organisations are not only winning large grants but in fact scooping up many smaller grants on offer (less than $5,000).
  • Not-for-profit organisations are reporting either stable or increasing grant-seeking success.
  • Despite efforts to encourage these forms of grants, multi-year grants for core costs are becoming increasingly difficult to obtain. Indeed, the portion of respondents who indicated that fewer multi-year grants were being offered compared with twelve months ago (approx. four in ten) outnumbered those who said more multi-year grants were being offered (approx. one in ten) by a factor of around four to one.

In its report, Our Community said the proportion of government spending which had been directed to grants was rising amid a growing desire to ‘steer’ rather than ‘row’ and directly manage programs and initiatives.

It said there was a growing belief within the public sector that businesses and not-for-profit groups who enjoy closer connections to the community are often able to deliver better outcomes.

Nevertheless, it cautioned that good outcomes were not guaranteed and that problems could arise with grant programs through poor program design, inadequate technical and administrative systems and excessive interference with grant maker autonomy.

All up, a total of 1227 people from organisations who had applied for at least one government grant in the past twelve months completed the survey, which was conducted between November last year and February this year.

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