Philanthropic fund giant's shift to outcomes-oriented grantmaking

Posted on 18 Sep 2020

By Matthew Schulz, journalist, Our Community

Youth involved an extension of the "Sonnets in Noongar" project in which Shakespearean works were performed in traditional Noongar language. Funds come via the Noongar Charitable Trust, which is managed by Equity Trustees. Picture: Eva Fernande

Having distributed more than $124 million worth of grants in the 2018-19 financial year, Equity Trustees is Australia's second-largest steward of funds for charitable trusts and foundations.

It handles the affairs of 650 different funds, and increased distributions by a massive $37.1 million on the previous year.

Its grants - on behalf of those funds - are spread across a wide span of social endeavour. This includes major investments in medical research, the young, the old, the environment and animals, human services, arts and culture, community development and indigenous services.

Managing all those grants - 3200 annually at last count - is a huge task, a bigger responsibility, and an incredible opportunity for the 18-member team to generate impact.

GMI readers will be most interested in the approximately two-thirds of its distributions that come from "discretionary" funds. These are the funds for which decision-making on spending has been entrusted to Equity Trustees.

Why paying the bills is not enough for philanthropy

Yet until recently, in the important area of distribution, there remained an elephant in the room, says the general manager of charitable trusts and philanthropy, Jodi Kennedy. And that was the fact that the organisation wasn't doing enough to demonstrate how it was making an impact.

At the Grantmaking in Australia conference, in a panel session dedicated to Equity Trustees' re-orientation towards outcomes, Ms Kennedy characterised the transformation as a move from "being stewards of money to becoming drivers of social change".

This move was prompted by Ms Kennedy's realisation soon after joining the organisation in 2017 that Equity Trustees needed better insights into its activities if it was to truly meet its stated goals.

"What I discovered early on was that [while] we were really good, and very efficient, around the actual distribution of the money, it was apparent that we really didn't have much of a sense of how effective we were being as funders in the sector.

"The challenge is in being able to demonstrate why people should entrust us with their money."

And that, she says, is why the organisation realised it must go beyond "careful stewardship".

"We had to demonstrate that we are not just giving money to charity, we are deepening that impact of that money by the way we are stewarding and distributing that money to the sector."

The switch has meant the organisation has become more informed about its funding, has empowered grantseekers, is better able to advise clients, is helping enhance the culture of giving in Australia, and is looking for better ways to collaborate with like-minded organisations to solve society's biggest problems.

Children at the New York! New York! For Kids exhibition at the National Gallery of Victoria in Melbourne last year. The event was supported by the Truby and Florence Williams Charitable Trust, which is managed by Equity Trustees

The risks of not measuring impact

Ms Kennedy acknowledges disquiet by some philanthropists who believe this kind of analysis is too expensive, too time-consuming, and inessential to the task of distributing funds.

But she says that thinking ignores the risk that philanthropic funds may not always have the desired effect.

"All funders giving money at scale have a responsibility to do this [measure impact]. There can be negative and unintended consequences for funders. And unless you engage in a learning journey to understand what those are, and your influence and impact is, then how are you going to know if there are those negative outcomes?"

Measuring impact also meant being much more upfront with grantees.

"We had never really been very transparent around how much, where, and why we gave the money to the organisations that we did. It's easy for us to demand the sector to show evidence about how you're making impact, and why should we give it to you, over somebody else. And yet, we as an organisation weren't doing that."

A public commitment to change, collaboration

Now Equity Trustees accepts that like its beneficiaries, it must show evidence, and it has put its intentions on display.

Part of that commitment to evidence was last year's Annual Giving Review, in which Equity Trustees outlined its proposed impact framework.

Ms Kennedy explains the intent: "This is where we started to say publicly, 'This is who we are, this is what we do, this is where we're heading. And if you're seeking funding, here's some insight into the decision-making process'."

That impact measurement framework will be rolled out over three years. It aims to deepen community impact by:

  • cultivating a culture of effective philanthropy
  • strengthening the for-purpose sector
  • using impact measurement and insights to catalyse lasting positive social impact across four key areas.

Those four areas are children and young people; ageing and aged care; medical research and health; and animals and the environment.

This new tactic has generated a greater understanding of the importance of collaboration for the organisation, because as an influential, networked organisation with the ear of active philanthropists, Equity Trustees is well placed to bring power brokers together to solve society's biggest problems.

Equity Trustees can identify, for example, a group of philanthropists with common goals and interests related to ageing, for example, to work as a team.

"One of the major things we've learnt is let's not try to do this on our own but use our influence and position as a large corporation to bring people to the table that need to be there, to solve those complex problems," Ms Kennedy says.

Some of the residents at Wintringham Specialist Aged Care, who are beneficiaries of the Andrew Miller Estate, which has provided land for more than 170 residential units.

How Equity Trustees is leaning on the experts

Equity Trustees has been working with impact specialists Think Impact for about a year on this project.

Think Impact founder Ross Wyatt told delegates Equity Trustees is helping to solve a $130 billion problem: that, he says, is the total revenue of for-purpose organisations in the country, all trying to tackle difficult social problems, yet often in isolation.

He said that with Think Impact's assistance, Equity Trustees is doing two crucial things: informing philanthropists about those big challenges, and identifying the best investments to address those social challenges, particularly in the focus areas listed in its Annual Giving Review.

It means, he says, that organisations such as Equity Trustees can "focus on the areas that matter and invest responsibly".

But he warns that other organisations considering following the same path must understand that it's not just about adopting a framework, "like a warm comfy blanket". He says organisations may need to change their culture, systems, processes, and even data capture methods to be capable of "impact-led design" of their grants programs.

Mr Wyatt says a challenge has been upending the power dynamic between "givers and receivers" and encouraging philanthropists to accept that having money doesn't necessarily mean having solutions: in fact, the organisations they are funding may have those answers.

Equity Trustees is now moving to the second phase of its outcomes-focused program, which will establish a new way of working with grant recipients and philanthropists.

The organisation says this will mean changing how it handles grants acquittals, with a renewed focus on what was achieved with the funds, as distinct from looking at whether the funds were spent as planned.

At the Australian Institute of Grants Management, we'll be watching with great interest and keep you informed.

Declaration: Our Community is a beneficiary of Equity Trustees through a program to assist social purpose organisations to access and employ data science. Read more

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