By: Sam Thorp | Manager, Consulting, Social Ventures Australia | https://www.socialventures.com.au/
At the heart of the recent Pay What It Takes report is the acknowledgement that to actually pay what it takes, we need to understand what it takes and that we have to pay for it.
NFPs and funders already know that they are often in the dark about the true costs to create impact. Ironically, long-term underfunding means that many NFPs have not been able to invest the time and resources to understand what their true costs are.
What has emerged from the research are two clear themes - better guidance and better skills will lead to both NFPs and funders improving their understanding of what it takes.
Understanding what it takes
A recent paper on Breaking the Starvation Cycle by Humentum, which looked at this issue on a global scale, suggests a number of potential remedies that funders can take to ensure they understand the costs of impact. These included:
The research underlines the importance of stronger support and training for NFPs and funders to help strengthen their insights in to paying what it takes.
Paying for it
There is more than one way to pay what it takes. Through our work, we encountered three common ways that foundations are thinking about how to provide full cost funding:
There are also innovative funding programs that combine these – for example, the Ford Foundation BUILD program combines unrestricted funding with capacity building funding for organisations, to significant success.
At our first workshop on strategies to pay what it takes, groups engaged with five case studies of Australian foundations and trusts that are already doing this work and heard from their funding recipients about what a difference it is making. This ably demonstrated that paying what it takes can be done in diverse contexts in different ways – for example:
At our next workshop on the 16th of June, Practical full-cost funding for NFPs and Funders, we will explore what it actually takes for funders and NFPs to pay what it takes, and what is needed to help the sector reach that goal. Registrations are still open here.
Jun. 02, 2022
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