Stories in philanthropy

How to be an effective funder

Nicole Richards

Tom Keenan knows a thing or two about grant making. After five years at the Origin Foundation, Keenan was hand-picked to scope and lead the Audi Foundation which exists to help strengthen the communities in which it operates. He’s not just a practitioner, but also a student and researcher on the home stretch of his PhD thesis which investigates barriers and possibilities for improving the performance of Australia’s not-for-profit sector.

He might’ve come a long way since his days as an engineer for BT (British Telecommunications) in the UK, but the principles that guide his work, Keenan says, are exactly the same.

“As an engineer, quality of output and efficiency are always going to be close to my heart,” he explains.

It’s the pursuit of those twin goals that set Tom on a path of investigation to better understand the complexities and paradoxes of the social sector and the possibilities for improvement.

“When it comes to charity, so many people see administration costs as the devil’s work and it’s tough for not-for-profits to get funding to help develop their organisations,” Keenan says.

“The majority of funds provided are small and short term, which means not-for-profits have to spend a disproportionate amount of resources chasing those dollars.

“Thirty-six per cent of all grants—around $50 billion worth—are for less than $10,000. Two-thirds of all grants are either one-off or for one year. There are few grants of over $100,000 and these are generally by invitation only. 

“I firmly believe there is a place and a use for small grants—buying sports or musical equipment to improve participation in schools for instance or improving community engagement and connectedness by establishing a community garden—but I can see little use for small grants when trying to address chronic and entrenched disadvantage.”

Based on his research, which incorporates a detailed survey of charities plus interviews with social sector leaders and funders, Keenan believes Australian philanthropy continues to take a tactical approach rather than a strategic position when it comes to investing in social improvement.

“The research is clear, if you want to be an effective funder, you have to do the opposite of what is currently happening and go large and long term.” Keenan says simply. “Funding organisations rather than programs would also help.”

Keenan brought that philosophy to Audi when he joined the company in January 2016.

“Prior to 2004, there were less than 2000 Audi motor vehicles sold annually in Australia,” Keenan explains.

“By 2016 Audi was selling over 2000 cars a month through 40 dealerships nationally. It was this continual commercial success that prompted Audi Australia’s leadership team to think about how to best repay the communities that have supported this growth and progression.”

The Audi Foundation is funded by Audi Australia and the Audi Australia Dealer Network.

With the organisation keen to ensure its commitment to high performance and constant improvement carried across to its philanthropic undertakings too, Keenan was given a mandate to undertake extensive scoping work and ultimately determine four key areas of interest for the Audi Foundation:

  • Helping women secure employment in non-traditional environments
  • Helping strengthen rural and regional Australia
  • Assisting unemployed people re-enter the workforce
  • Assisting young people achieve their potential through improved health and educational outcomes.

The Foundation’s inaugural charitable partners—Country Education Foundation of Australia, The Smith Family, Foundation for Rural and Regional Renewal and ReachOut—each have a five-year agreement with the Foundation.

Though it’s early days for the Audi Foundation, which officially launched in May, Keenan is determined to drive greater impact and efficiency through leading by example.

“When not-for-profits have to deal with the financial instability that results from short-term grants that leads to survivalist type behaviour and mission creep,” he says.

“When you take into account the power imbalance in the relationships between funders and fundees, only funders have the ability to fix this.”

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