To develop this closer partnership with non-profits, and also reduce the costs of assessing many organisations seeking funding, the Perpetual Foundation will stop conducting annual funding rounds and adopt an “open registration” process enabling deeper research of charities’ ambitions and their needs, Baldwin says. The model aims to spend more time analysing the organisations of greatest interest to donors, and allocate grants to the most suitable charities.
This analysis should identify nonprofits’ needs for general funding and the costs of developing and maintaining operational systems. Baldwin says grantmakers should begin asking: “will funding a particular project or program really advance the fundamental purpose or would the funding be better applied to operational costs and infrastructure?” “Non-profits may be able to execute a good project, but what’s the quality of the underlying organisation?”
“Our approach to grantmaking will look at funding quality, well-managed organisations with great leadership, good disciplines and practices, and a focus on achieving positive societal outcomes.” In their assessments of organisations, funders should look for certain attributes in non-profits, she says. Since these organisations aim to cause great outcomes in society, they should be able to clearly explain their goals and methods and evaluate their progress.
The leadership, processes and culture of non-profits should also be investigated, as these qualities are crucial to the fulfilment of the social mission. But funders “should not try to tell non-profits how to run their organisations or projects,” Baldwin says. Non-profits should not “be expected to jump through hoops” or undertake specific projects in order to secure funding.
They may be dependent upon benefactors, but should never be their playthings. Baldwin says donors and nonprofits can both benefit by sharing lessons from their own good and bad experiences in the community sector, and by discussing public policy and how government actions affect their projects. Those that can influence civil society to support participate in their causes exert the highest impact, Baldwin says. The most recent initiative undertaken by the Perpetual Foundation is to review research on social and environmental problems in Sydney with United Way. The Sydney Community Foundation, Westpac Foundation and the Centre for Social Impact are also involved.