Australian NFPs are experiencing significant shortfalls in philanthropic funding. But stronger government relationships could provide a solution that offers financial stability to NFPs, plus options for growth.
A recent Perpetual article on philanthropy in Australia flags the concerns held by many NFP organisations over current funding shortfalls.
Perpetual Trustee Company’s ‘Philanthropy Snapshot: How to give well in 2023’, is a precursor to the October Philanthropy Insights report. It draws on data collected from Perpetual’s IMPACT Philanthropy Application Program, which had more than 1400 applications for funding, and from the community sector. Some of the big challenges Australian NFPs experience include:
- Inflation, with the cost of delivering community services increasing sharply just as the community requires more assistance
- Talent shortages, with NFPs vulnerable to high staff turnover and competing with the private sector when recruiting, plus confronting critical shortfall in volunteers since the pandemic
- Cyber risks, with NFPs struggling to find the funds and the people needed to protect their organisation and their clients from cyber risks.
However, the snapshot also notes that: “Government relationships can underpin predictable funding. They can help drive crucial policy changes that help the communities that not-for-profits serve.”
Focusing on these government relationships could put your NFP in a stronger position to access government funding.
Government funding sources for NFPs
Key sources of government funding for NFPs are:
- Federal, state or local government grants
- Federal, state or local government tenders.
At Next Dimension Accounting we can assist your organisation to boost its prospects for securing government funding.
Changing relationships
The Perpetual report commented on a key problem with government relationships, “Today many not-for-profits say they are struggling to get the ear of government because they lack staff with necessary lobbying and policy skills.” A constructive approach would be to engage people who can help your NFP connect with government opportunities.
New opportunities have opened up following recent changes in federal and state governments. Where funding previously favoured ‘bricks and mortar’ and sports, there will now be more government funding for soft skills and the arts, such as the new Creative Australia agency established under the Australia Council.
Having organisational policies that chime with government objectives will strengthen your NFP’s position, so where needed use an agency to create appropriate content, messaging and strategies.
Being aware of upcoming opportunities is important, so your organisation is prepared even before government grants or tenders are advertised. As was demonstrated during the pandemic, NFPs fare better if they can offer suitable services quickly when governments introduce new measures in response to changing conditions.
Government grants
At Next Dimension we have considerable experience with preparing submissions for grant-making bodies.
You can enlist an accounting service at the pre-submission stage to help with costings and budgets for government grant funding applications. If the grant is awarded, the accounts team can monitor the spending of grant funds, and track projects through to the acquittal stage. NFP outsourced accountants like Next Dimension are experienced in tracking funding that is project based, and will manage accounts receivable, cash collection apps, invoicing, transfers, financial reports, review of expenditure compliance and program closeout.
There has been a sharp increase in public scrutiny of government grants, with conditions tightening after recent examples of extreme ‘pork-barrelling’ that pushed grant practices into the media spotlight. Your accounts team can help your NFP ensure plans for spending any government grant money are justified and grounded in realistic budgets.
Government tenders
Securing a government tender is a practical way to ensure your NFP has a reliable income stream. The federal state or local government might procure services from NFPs such as counselling, construction, transportation and more.
Devise your organisation’s game plan for winning an Australian government tender. Become familiar with tender requirements and processes. The Federal Government, for example, operates under a Commonwealth Procurement Framework. Work to ensure your organisation is tender-ready and agile. Keep the organisation’s figures up to date with Xero.
When compiling your tender bid, your accountants can help project figures and cost a bid that is realistic for your organisation in terms of financial investment and human resources. A wide range of contacts, with expertise in different areas, can add value to the submission.
The ‘predictable funding’ provided by government grants or tenders can boost NFPs of different sizes attempting to manage shortfalls across many areas and represent a stable platform on which future capability can be built. Contact Next Dimension Accounting for assistance in addressing philanthropic shortfalls and maximising opportunities to win government grants and tenders. To find out more, please contact our team.
Note: Perpetual’s comprehensive 2023 Philanthropy Insights report will be published in October 2023.
