How a new grantmaking approach works

Cool Australia and Australian Executor Trustees (AET)

In February 2020, Cool Australia submitted an Expression of Interest to AET’s Small to Medium Stabilisation Fund 2019 - 2021. The EOI was short and sweet, 100 words describing the challenge we were seeking investment to overcome and how it aligned with the challenge articulated by the SME Stabilisation Fund strategy.

Naomi Nicholas, Head of Community Engagement - Cool Australia

The process from EOI to funding approval was conducted primarily by way of conversations, which allowed us to convey our organisations past, present and ambitious future clearly. The next step after the EOI was a 30-minute Zoom call, where we discussed our challenge, being that our current website cannot sustain our growth which inhibits our impact. Developing a new website will improve our operational capacity and efficiency and enable us to deliver more free education resources to teachers, students and parents. It will also help us to diversify our revenue streams and expand into international education systems. While we talked, Ben (AET) took notes and distilled our discussion into a theory of change for our project and a document to be taken to AET’s Discretionary Grants Committee. The next stage was another Zoom call with a representative from AET’s evaluation partner, TACSI, to discuss a baseline for the project.

On June 16, after a very light-touch process, our funding request was granted. Ongoing evaluation/reporting has been similarly light-touch, with a 45-minute Evaluation Conversation via Zoom that is, once again, documented by them rather than us.

Naomi Nicholas
Head of Community Engagement, Cool Australia

The conversational and unconventional way AET run this program has created a great relationship based on trust and mutual respect.

We have constructive conversations about the progress of the project and key learnings. We hit a stumbling block when our partner in the project interpreted our requirements differently, which pushed out our timeframes. While this was disappointing, it was easy to convey this to AET. We will launch our new website in February 2022 on our new domain,!

AET introduced us to the Phillips Foundation due to our mutual passion for education and the health and wellbeing of Australian kids. The Phillips Foundation subsequently funded our Early Learning Resource Hub, which will benefit young learners across the country.

Our relationship with Ben and Charlene at AET is genuine and rewarding. AET believes in our vision and mission, and their confidence in us is very bolstering.

While this might not be considered the kind of innovation that distinguishes some recent examples of participatory grantmaking, for us it represents a different experience compared to some other granting relationships we have. In this case, we feel the balance of power has shifted so that Cool Australia and AET are more equal stakeholders in the project outcome. This is not to take away from other funders, literally, every funder of ours showed great flexibility and adaptability last year as the COVID-19 crisis hit the not-for-profit sector. We welcome the shift towards participatory grantmaking in Australia. It is going to provide greater opportunity for greater impact.

Ben Clark and Charlene Yum - Australian Executor Trustees

In 2015 AET reviewed its approach to administering its discretionary grants program. The organisation reviewed not only how and what it funded, but also reinvented its grant application process with the end goal of achieving a more inclusive and participatory grant making experience for grant seekers.

AET looked locally and globally at other funders who had flipped the power dynamic and removed many of the administrative/risk barriers that still exist in philanthropy, resulting in the SME Stabilisation Fund which pools charitable funds from discretionary trusts under its management. The fund - that provides multi-year grants up to $50,000 per annum for eligible small to medium-sized organisations (defined as revenue less than $5M per annum) - focuses on traditional capacity building grants and investment in early – mid career professional development. It is now in its sixth year of operation.

The first step was to recognise and then challenge the traditional power dynamic that exists between grant makers and grant seekers. As a Licensed Trustee Company, as opposed to private philanthropist, the decision was easier as explained by Ben Clark, Head of Philanthropy and Social Investment at AET.

Charlene Yum
Australian Executor Trustees

“At the end of the day, we are appointed by clients who are seeking an independent entity to steward their philanthropic wishes over the longer term. Where we have discretion (over grantmaking), we are incredibly privileged to have the flexibility to enable charitable trusts and charitable organisations to respond to the challenges of today and tomorrow. We need to fund where traditional grant makers have probably avoided and are prepared to learn and evolve our approach. We need to take risks and back organisations taking risks. Ironically, this is often where funding is most needed!”

AET flipped its traditional grant application process, which up to 2015, required organisations to complete a three-page application requiring eligible charities to outline the project, elaborate on organisational governance structures, demonstrate operational efficiency and provide detailed budget information. Data that informs funders on the likelihood of success of program delivery, but very little about the reason behind the funding ask: the challenge, design response and broad goal of a funding ask.

Accordingly, AET worked closely with The Australian Centre of Social Innovation and now utilises a participatory granting framework called Giving Connect. Applicants complete a short Expression of Interest. A representative from AET assesses the high-level strategic alignment and then joins an independent assessor in asking charities (usually over a ZOOM conference) a series of non-scripted questions about the program logic behind their funding request, the risks they expect to encounter as well as interrogating the funding requests high level budget. The independent assessor then completes the application (on behalf of the charity), sends it for review by the applicant and then submits on behalf of the charity.

This approach initially was treated with suspicion by applicants, some of whom described it as the antithesis of the standard grant application process.

“Our goal is to build trust, transparency and awareness. We needed to open ourselves up to be challenged on our approach and we actively seek feedback to help our own grantmaking process evolve” says Charlene Yum, Senior Trust Officer, Philanthropy. “Some organisations were genuinely challenged when we adopted the Giving Connect framework and believed we were denying them the right to put their best (written) application forward! Others have adopted the methodology and now use it as a basis for defining their fundraaising and Case for Support. From a funders’ perspective, it has certainly enabled a deeper engagement and understanding of the organisations and projects we review as well as challenge some the inherent assumptions made in traditional philanthropic grantmaking.’’

Philanthropy Australia’s Thought Leadership series on Participatory Grantmaking features Lani Evans, from the Vodafone New Zealand Foundation and Michael Jarvis, from the Transparency and Accountability Initiative in Washington, and will be held on Tuesday-Thursday, August 24-26.

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