Charity and funder relationships: unlocking the potential

Author: Thomas Keenan

Keenan, Thomas, 2021 Charity and funder relationships: unlocking the potential, Flinders University, College of Education, Psychology and Social Work

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The Australian charity sector is extensive and operates across most aspects of our society. It provides a diverse and frequently complex range of services and delivers essential support for individuals, families and communities. The size, reach and scope of the sector means that any improvements to the effectiveness or efficiency of charities would likely lead to wide-ranging and far-reaching benefits to the whole of Australian society and beyond. Consequently, this research investigates, interrogates and reports on the impact the current model of charity funding has on their effectiveness and efficiency. This research also investigates the nature of the relationship between charities and funders. A mixed method approach was used in this research.

The theoretical framework for this research is a blend of Phenomenology and Resource Dependency Theory (RDT). The former was adopted as a means of exploring ontological understandings and ‘taken for granted’ meanings of the charity and funder relationship in rich and nuanced ways. RDT with its considerations of dependency and relational power was used to undertake a detailed exploration into how the organisational effectiveness and efficiency of Australian charities are being impacted by the current model of funding and how this model is influenced by the power dynamics within the charity/funder relationship.

This research has found that the organisational effectiveness and efficiency of charities is being significantly compromised by how they are funded. This is primarily due to the fractured charity/funder relationship, which is skewed, very much, in favour of funders. Funders hold all the power in this relationship; they know it and they exploit it. This power imbalance presents, most frequently, in how charity funding is sourced, awarded and then controlled. The mechanisms for securing funding are inconsistent, subjective and consume a significant amount of charity resources, all of which dilutes, not inconsiderably, the value of the funds awarded and therefore the impact that charities can have. Funders’ power extends beyond the initial award of funding to the dictating of where and when funds should be used and the refusing of funding requests for capacity building type funding that would afford charities the opportunity to become more organisationally effective and efficient. As a result, organisational competence is further compromised. The charity/funder relationship matters less to funders than it does to charities, as does the impact of the funds provided, which is of little importance to funders.

Another important finding of this research is that of the reality of being a charity employee. Funders hold charities and the employees within in low regard. They demonstrate little concern for the well-being of charity employees or their working conditions. Charity employees are compromised regarding income, working conditions and job security. The reality is that being a charity employee is not an attractive proposition.

Keywords: charity, funders, funding, philanthropy, relationship, effectiveness, efficiency, grants, donations

Subject: Social Administration thesis

Thesis type: Doctor of Philosophy
Completed: 2021
School: College of Education, Psychology and Social Work
Supervisor: John Halsey