“The other way you choose the organisation is impact … it’s whether they can leverage it dollar for dollar with something else that comes from somewhere else, whether it’s a government contribution or a corporate contribution or what. So you’re trying to have the biggest impact…”
– Focus group, High Net Wealth Individuals, QLD
If we built a word cloud of Giving Australia 2016, ‘impact’ would loom in large type.
Here are a few findings, particularly from the Philanthropy and philanthropists’ survey and interviews, as well as from the nonprofit perspective.
Impact a key driver
Achieving impact was a key driver for philanthropists. In fact, the most common motivating factor for 92.9 per cent of survey respondents was ‘belief that giving can make a difference’.
Impact influences giving choices
Impact shaped what issues and organisations were supported. Giving went where the greatest impact could be made. Key considerations reported were:
– whether the focus area for the grant or gift was already well covered, and
– whether a grant or gift was likely to contribute to sustainable positive impact.
Four of the top five factors influencing which nonprofit organisations were supported related to their ability to generate impact. These included:
– being assured that a charity or organisation had sound governance (92.3 per cent)
– perceiving a charity as competent and capable to deliver social impact (92 per cent)
– believing that a grant would provide for the disadvantaged and meet key needs (74.1 per cent)
– being confident that the grant would provide ‘bang for buck’ in terms of impact (65.4 per cent).
Greater nonprofit capacity would mean greater impact
Philanthropy sector participants said more capacity building resources were needed from them to support nonprofit organisations to use their grant funds effectively. These capacity building resources were also needed to bring more nonprofit sustainability so the impact of philanthropic and other funding would grow.
Impact is influencing grantmaking processes
The Philanthropy and philanthropists survey confirmed that grantmaking processes were shifting toward increased due diligence and research into organisational capacity.
What conveys impact?
Perceptions of impact on the part of philanthropists and foundations came from quality of reporting and communication. In interviews and focus groups, nonprofit organisations identified as those with strong impact reporting systems in place were seen to have a large competitive advantage over their peers, many of whom felt inadequate to provide metrics.
What’s changed in the past decade?
Compared to the time of the first Giving Australia in 2005, a tangibly greater focus on impact was evident, in particular the value of:
– openness to longer-term investment in areas of need, and
– engaging communities in co-creating solutions to their local challenges.
Although impact was clearly important to philanthropists, the particular approach of impact investing remained an emerging strategy, with only one in five Philanthropy and philanthropists survey respondents including impact investments in their fund’s portfolio.
Supporting local initiatives aimed at developing the necessary scale for impact investing in Australia was highlighted as a gap and opportunity.
The impact of impact
In future, education and exposure to the impacts of giving will be seen as vital ways to foster a stronger culture of giving in Australia.
Giving Australia 2016 is the largest research ever undertaken in Australia into giving and volunteering. It was funded by the Department of Social Services as an initiative of the Prime Minister’s Community Business Partnership. Many reports are available free at the Community Business Partnership website or you can sign up for updates here.
Associate Professor Wendy Scaife, is Director of the Australian Centre for Philanthropy and Nonprofit Studies, QUT and Christopher Baker is a Research Fellow at the Asia-Pacific Centre for Social Investment and Philanthropy, Centre for Social Impact, Swinburne.