Jim O’Brien, Senior Fundraising Consultant at AskRIGHT, comments on the new study US Foundation Funding for Australia. He shares interesting insights from the study and his experience in both the US and Australia to help you as you consider approaching US funders.
There are a myriad of US-based trusts and foundations that give to good causes in Australia. This study helps understand US Foundations’ patterns of grantmaking, a key step before asking them to support your Australian organisation.
Recently released by Philanthropy Australia, the US-based Foundation Center, and the US Studies Centre at the University of Sydney, this important new study is particularly noteworthy for its call to action for greater transparency and collaboration.
Summary Findings on US Foundation Giving
The study found that US foundations awarded nearly US$100 million in grants to Australia between 2011 and 2013. The majority of these grants were earmarked for health and included a focus on economically disadvantaged groups. The Bill & Melinda Gates Foundation itself provided nearly US$45 million of this total, with the vast majority of its funding supporting health.
Who are the main recipients of US grant funds?
The environment, animals, agriculture, fishing, and forestry were second to health, attracting 23 percent of the grant dollars, reflecting the global importance of Australia’s unique natural resources and our important contribution to these issues regionally. Overall, universities were the main recipients of grant funds during this period.
The study found that US foundations that awarded grants to Australia did so for various reasons. Some foundations have personal connections in Australia and corporate foundations give where they have operations or other important business ties to the region. The report also noted that foundations gave to institutions based here that were involved in issues of interest to the funders.
What does this teach us about applying for funding from a US foundation?
This latter point is of particular importance, especially for Australian organisations seeking funds from US funders: if you are looking to apply for funding from a US foundation and there is not an existing connection, it is essential that you are working in an area that has been identified as a priority by the funder. Once you are certain that your organisation and project may be of interest and are eligible to apply, you should recognise that you will be competing internationally for funds. US funders are reaching out globally to solve global problems and you are likely to succeed only if you have a strong, competitive track record, the expertise, and the relationships to achieve your aims.
Where to find information about US Foundations
While interesting and useful, the summary data themselves were not the real ‘news’ here. This data have always been readily available to subscribers of the Foundation Directory Online, a service of the Foundation Center. If you are interested in knowing more about the foundation sector in the US or are interested in seeking funds, it is an important and valuable resource. For instance, if you would like a complete list of grants made to Australian organisations, this is readily available.
Towards Greater Transparency and Impact in Australia’s Nonprofit and Philanthropic Sectors
As noted in the report and in much of the media coverage, one of the most important aims of the project and partnership with the Foundation Center, is ‘to start a discussion about the benefits of transparency and openness and how it supports collaboration, increases impact and educates the community about the role and contribution of philanthropy.’ As someone who has worked both in Australia and the US, the difference in transparency is stark and the benefits of greater transparency would be immense.
Informing the general public
The report argues that philanthropic efforts serve the common good. Because of this, foundations ought to be accountable to the general public. Not only are foundations major actors in solving important local and global challenges, they also receive significant tax concessions. As taxpayers and citizens, we are entitled to know more about the operations, impact and history of these foundations given their privileged tax treatment. A national discussion on transparency and the obligations of the foundation sector is much overdue.
Improving the function of the NGO and philanthropic sectors
One of the main arguments for transparency is to improve the function of the NGO and philanthropic sectors. The report notes that from the perspective of foundations, knowing more about each other’s priorities, programs and impacts would enable greater collaboration and more efficiency and effectiveness in grantmaking and social problem solving, including bringing impact to scale through funding larger transformational initiatives. Through their participation with Philanthropy Australia and a range of formal and informal networking groups, foundations can get access to such information with relative ease, at least in comparison to what is readily available to grant applicants.
Targeting fundraising strategies
From the perspective of fundraising organisations, greater transparency would offer both direct and indirect benefits. It provides much-needed information to support more effective decision-making and the development of appropriate fundraising strategies. It is an enormous waste of everyone’s time developing and/or reviewing proposals that have no chance of success.
Knowing more about the types of grants a funder makes, the size of their typical grants, the aims of the funder and the total number of gifts would enable the sector to more strategically target fundraising efforts and to engage in meaningful dialogue about the challenges they face and the potential role of philanthropists. The current information imbalance is not healthy for advancing the work of the sector.
Four ways for foundations to create value
Beyond these immediate impacts, greater transparency would have several important results. In a Harvard Business Review article, Michael Porter, a leading global strategist, noted that in addition to their function in directly supporting projects, foundations create value in four ways:
1. Selecting the Best Grantees
Given their program expertise and engagement in the field, foundations can reasonably be expected to channel resources to programs and projects that are most productive, important and likely to be effective. Foundations have expertise and resources to conduct a level of due diligence that is not available to most members of the general public. They are likely to contribute important perspectives in understanding the nature of problems that the funds are meant to address. By selecting the ‘best’ grantees according to defined criteria, the dollars given are likely to produce a greater return than the dollars given by less knowledgeable donors.
2. Signalling other funders
With greater transparency foundations signal other funders attracting donors to noteworthy and important initiatives, thereby magnifying their impact and value. Individual philanthropists and donors often look to who else is funding a project in deciding whether to make a gift.
3. Improving the Performance of Grant Recipients
Third, as engaged partners, foundations can help strengthen important capabilities of recipient organisations, further improving the return on its investment and providing countless indirect benefits to the wider community. For instance, the call for greater accountability and the demand for performance and outcome data lead to a greater focus on evaluation and provides much-needed data for improving performance.
4. Advancing the State of Knowledge and Practice
Finally, Porter suggests that foundations can create the greatest value by funding a series of projects or programs that produce ‘more effective ways to address social problems’. Formulating and funding a range of initiatives within a certain field enable funder to understand what works. By compiling this experience, they contribute important evidence and experience to policy debates.
Together, these benefits offer tremendous scope for improving the functioning of the sector as a whole and improving the likelihood of creating important and meaningful impacts.
Collaborating with US funders
A second aim of the report was to explore the state of collaboration with US philanthropists, among Australian funders, and in partnership with government. Given the relative value of the foundation sector in the US and Australia, further discussion on this topic is significantly important and worthy of greater attention.
What are the most important opportunities for collaborating with US foundations? As seen by some of the largest grants from US funders, the good news is that Australian organisations are already playing an important and growing role in addressing global problems. Its universities, its research organisations, and its NGOs are critical players and are international leaders in solving some of the world’s most pressing problems.
Largest grants from US Foundations to Australia: 2011-2013
(Source: Foundation Directory online)
|Bill & Melinda Gates Foundation||Policy Cures, Sydney||2013||$4,998,895||Development of new products for neglected diseases of the developing world|
|Bill & Melinda Gates Foundation||Menzies School of Health Research, Tiwi||2012||$4,983,645||Research on primaquine to optimise strategy for cure of Plasmodium|
|Atlantic Philanthropies||Princess Alexandra Hospital, Brisbane||2011||$4,859,750||Establish Centre dedicated to prevention and cure of head and neck cancer|
|Bill & Melinda Gates Foundation||University of Queensland, Brisbane||2012||$3,990,198||Sorghum breeding and productivity in sub-Saharan Africa|
|Bill & Melinda Gates Foundation||QUT, Brisbane||2012||$3,989,596||East African Highland banana nutrients in Uganda|
|Bill & Melinda Gates Foundation||Murdoch Children’s Research Inst., Parkville||2013||$3,096,211||Monitor pneumococcal vaccine impact|
|Bill & Melinda Gates Foundation||Murdoch Children’s Research Inst., Parkville||2013||$2,976,787||Develop low-cost neonatal rotavirus vaccine|
|Gordon and Betty Moore Foundation||UTS, Sydney||2013||$2,965,000||Microbial processes in the ocean|
|Rockefeller Foundation||ICLEI Australia/New Zealand, Melbourne||2012||$1,750,000||Urban climate change resilience in Bangladesh, India, Indonesia and Philippines|
|Bill & Melinda Gates Foundation||QUT, Caboolture||2013||$1,627,710||Shared global platform on innovation knowledge|
As suggested by the leading grants and as noted in previous research by the Foundation Center, the main focus of US foundation giving globally are in the area of global health, economic and agricultural development, the environment, promoting democracy and global security. These resources are aimed largely at global challenges, particularly in the developing world. These are issues where Australia has special expertise and strategic advantages, e.g., local ties to NGOs and communities throughout Asia Pacific.
Greater collaboration is most likely where the interests and capabilities of US and Australian foundations are complementary and aligned. In addition to more focused and successful grant seeking by Australian NGOs, greater dollars are likely to flow to Australia when philanthropic and government organisations themselves are involved in funding the initiatives. For example, some of the Bill & Melinda Gates Foundations largest grants are given to partnerships that include a range of funders, particularly government agencies.
A global collaboration
Increasingly, solving some of the world’s most important problems requires the involvement and financial support of multiple nations, diverse and large organisations and funders. As the philanthropic market in Australia and Australia’s role as a global power continues to evolve, addressing the question of effective collaboration with US funders will require that we simultaneously address questions about the proper role of Australian trusts and foundations in supporting international programs and organisations. Currently, unlike US foundations, Australian foundations can only contribute to Australian organisations including those who work internationally. They are not able to support international organisations, limiting their capacity to bring about change and their potential impact in the region. If similar regulations were in effect in the US, foundations there would not be able to support work led by Australian organisations.
In a 2010 study, The Global Role of US Foundations released by the Foundation Center, Joan Spero, Visiting Fellow at the Center and former head of the Doris Duke Charitable Foundation, noted that US private foundations have a long history as important global actors pursuing social and political change around the world. In 2008, for example, she notes that international funding by US-based foundations approached nearly 25 percent of the total US government funds allocated to overseas development assistance.
It would be in the interest of Australia and the region more generally if tax policies and incentives were aligned to encourage the foundation sector to work more actively and effectively globally and participate as active partners in shaping and supporting public policy and innovation and encouraging economic development and problem-solving in the region.
The report US Foundation Funding for Australia represents an important step forward both in terms of providing an easily accessible resource for Australian not-for-profits as well as for foundations and policy-makers. Its call to action for greater transparency among Australian funders is of particular importance. As beneficiaries of favourable tax treatment, such transparency would appear to be reasonable and would also provide several additional benefits for the sector as a whole.
There are special opportunities for collaborating with US foundations and for making a difference in the region that are not possible. Indeed, Australian foundations are facing limits when it comes to supporting international projects and organisations and solving global challenges. The nation, its universities and NGOs would likely experience greater success in attracting US foundation support for international projects if the Australian philanthropic sector and government were active partners in these efforts.
Learn more about US Trusts and Foundations in our webinar. We will show you:
- How to identify potential grant sources from the US
- The process for effectively building relationships
- The process for applying for funding from trusts and foundations based overseas
Jim is based in Sydney. To find out how Jim can help your organisation, contact j.obrien@AskRIGHT.com.
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