Capacity-building grants find the sweet spot for NFPs

Grants that enable not-for-profits to focus on themselves – instead of a sole focus on delivering services – are almost as rare as unicorns, so when Community Sector Banking offered grants dedicated to capacity-building earlier this year, it was deluged with applications.

Their Social Investment Grants program introduced the theme “Building Capacity” in May, attracting a record 507 applications. It awarded $350,000 in grants to 11 not-for-profit organisations.

This year’s theme was developed in response to a “significant expression of the need for general capacity building grants that were not tied to specific programs and services,” according to CSB’s head of philanthropy and state manager for Victoria and Tasmania, Bruce Argyle.

Data from the online grants directory Funding Centre, an AIGM sister enterprise, highlighted the demand, showing that CSB’s “Building Capacity” round attracted more clicks than any other grant advertised in May.

The grantmaker has awarded $850,000 in grants since 2014, with previous rounds addressing issues such as homelessness and family violence.

By focusing on a “particular subsector,” previous grant rounds were limiting the types of not-for-profits that applied, according to CSB’s Steven Anderson.

“The capacity building theme opened [it] up to everyone.”

The theme also encouraged organisations to look at their internal processes and find ways to improve them.

Organisations that don’t have the capacity to improve themselves are at risk of becoming “stagnant, [and] unable to innovate or evolve.”

“Half the time, they’re [grant recipients] using the funding to support the people who are using their services, whereas this gave them an opportunity to focus inward,” Mr Anderson said.

That inward focus benefits not only the organisations involved, but the communities they serve. Grants funds were used to purchase new IT, build systems, train staff to track outcomes, build reports and streamline processes, “which in turn then helps the people that they’re supporting,” Mr Anderson said.

Governance and strategic planning help also featured heavily on grant applicants’ wish-lists.

The assessment process began with a team at the Community Enterprise Foundation, which administers the grants in conjunction with CSB. The team checked applications for eligibility, then passed them to CSB, which produced a shortlist for the grants advisory team. This team of seven consists of representatives from CSB and from Bendigo and Adelaide Bank, and three independent members, who “independently assess each one against the funding priorities and come together to reach a consensus decision on final successful applications,” Mr Arygle said.

“Over 50% of this year’s applicants unfortunately did not meet the clearly stated criteria.” (Side note to any grantseekers reading this: read the guidelines, then read them again.)

This round funded not-for-profit organisations with an annual turnover between $50,000 and $5 million.

“We deemed that organisations with turnover less than $50,000 were generally ‘start ups’ and that those over $5 million were of sufficient size that they already have ‘capacity’,” Mr Argyle said.

Similarly, CSB prioritised projects that could easily be replicated elsewhere. This stemmed from a belief that “learnings and initiatives undertaken by one NFP should be shared with others for the benefit of the broader sector.”

Pets of the Homeless, a Victorian not-for-profit that supports the pets of people who are homeless or at risk of homelessness by providing food and veterinary care, was awarded a $25,000 grant to help fund a warehouse and a volunteer management system.

Pets of the Homeless – which began a service from founder Yvonne Hong’s garage – continues to expand its “paw print”, opening Victoria’s first Pet Food Bank in November, with the support of animal-loving ambassador and broadcasting personality Myf Warhurst.

Ms Hong said the grant, alongside volunteers, donors and local businesses allowed them to convert an old mechanic’s workshop in Cheltenham into the new Pet Food Bank.

“Now that we have all this space, we are calling on the community to help fill it up,” Ms Hong said.

Pets of the Homeless has “kept in contact quite a bit” with CSB since being awarded the grant, Mr Anderson said. That’s been helpful, because CSB aims to maintain an “open dialogue” with grant recipients in order to track outcomes.

To assist organisations in measuring impact, CSB, in partnership with the University of Technology Sydney, has developed a tool “that allows for a systematic analysis of impact of grants and will be used for all grants in the future,” Mr Argyle said. The Social Impact Toolbox, available for free to not-for-profits, features a searchable library of tools and resources, all validated by academic research.

It seems that every decision CSB makes throughout its grantmaking process comes from a desire to see the biggest possible impact. Are there any areas in which it can improve?

CSB tries to award grants to a diverse range of recipients, but it doesn’t set location quotas, and most of the 11 recipients of capacity-building grants were based in Melbourne or Sydney.

The bank considers that eligibility, impact and project diversity are more important than geographical diversity, Mr Anderson said.

Mr Argyle couldn’t confirm it, but so far it’s looking good for not-for-profits.

“Given the overwhelming response to this year’s capacity-building grant round, it is likely that we will fund capacity-building across the community sector again in 2020.”

CSB’s advice to other grantmakers considering funding capacity-building initiatives is to make it very clear, both internally and externally, exactly what is eligible for funding, and what isn’t.

Examples of previously funded projects should be provided where possible. They “definitely help,” Mr Anderson said.

“Be clear on what capacity building is. There were quite a lot of applicants who started doing their applications but didn’t finish, and I think some of that could have been [that] people weren’t clear on what capacity building was.”