Step 8. Who will you fund?

Giving Green: Guide to grantmaking

This is step 8 of 10 of the Giving Green grantmaking guide. For a hard copy of this guide, email info@aegn.org.au.

Now that you are clearer on your mission, focus, issues and the approaches and types of funding you prefer, you need to decide who to fund.

Non-government organisations are the most common vehicle for distributing philanthropic funds in Australia. NGOs are legally incorporated organisations exempt by law from corporate income tax because of their mission to accomplish defined charitable work and because no individual or entity shares in any profit or losses.

This sector plays an important role in Australia, providing important services and employing an enormous number of people. As at 31 October 2013 there were nearly 57,730 tax concession charities but only about 27,985 qualify as deductible gift recipients (DGRs) able to give tax deductible receipts.

Tax deductible organisations

Deductible gift recipient organisations fall under one of the following categories: health, education, research, welfare and rights, defence, environment, the family, international affairs, sports and recreation, cultural organisations, fire and emergency services or ancillary funds.

Environmental non-profit organisations are often seen as the engine room of change and activity. They focus on providing a variety of services including private land purchase and management, advocacy for better environmental policy, research, awareness raising and environmental education.

Currently there are around 541 organisations on the Register of Environmental Organisations that have DGR status and 625 Tax Concession Charities with an environmental focus. Many other non-government organisations such as academic institutions, public museums and welfare groups also provide environmental services such as education, research and health programs.

Funding of environmental organisations

There is limited research on how the environmental NGO sector is funded, but anecdotal evidence shows that at least 50% of funds come from donations from the public and philanthropic sector. The AEGN has analysed the available data and produced a map of the environmental NGO sector.

It can be difficult to sort through the hundreds of not-for-profit organisations that you can fund. This is a good point at which to get some help again. Below, you’ll find the type of information you should gather about organisations you are considering funding. Alternatively, you could be a ‘responsive grantmaker’.

Responsive Grantmaker

(Taken from Meachen, V. An Introductory Guide to Grantmaking)

A foundation choosing the responsive style determines its criteria for funding… and then invites the community to submit applications based on those criteria. The applications are assessed on their own merit and the most appropriate are selected for funding.

Advantages of the responsive style:

  • A good way to get to know a variety of community organisations
  • Less pre-application research required
  • Enables you to be truly responsive to what community organisations need

Disadvantages of the responsive style:

  • Usually means a large volume of applications and therefore more resources spent on responding to them.
What information should you gather about an environmental organisation that you are considering funding?

(Adapted from Tracy Gary, Inspired Philanthropy: Your Step-by-Step Guide to Creating a Giving Plan and Leaving a Legacy.)

  • What is the leadership or management style of the organisation or its leaders?
  • Do you admire the staff and leadership? Are they working in alignment with your giving goals and objectives in some important ways; are they a ‘mission match’ for you?
  • Do the staff and board leadership work well together?
  • What is the impact or effectiveness of the organisation, or its results?
  • How well does it collaborate and with whom?
  • Are diverse constituents involved and helping to guide outcomes?
  • Is the organisation financially stable?
  • How much income does it bring in from fundraising or earned income? Does it have any cash reserves?
  • What are its strengths and challenges?
  • What is the organisation working on now, and what does it need?
Here are a few tips to get you started:
Worksheet question
  1. Develop a list of organisations that you would:
    • like to get to know more and how you are going to do this
    • like to fund and how you are going to approach them

Download and print out a copy of the pdf icon Worksheet (PDF 123kb).

Trust yourself

“Through all the number crunching and research, certain organisations and leaders may resonate for you. This is your giving. Does thinking about giving to this organisation evoke a smile? Does your gut feel right about it? Your brain is processing more than the data on the page. Do internal ‘due diligence’ and trust what does or does not feel right to you. It will make a big difference to the energy you are willing to contribute toward an organisation.”

– Tracy Gary, Inspired Philanthropy

 

Proceed to Step 9.