Grant-making organisations should adapt and take risks on charities with an uncertain future or will get in the way and become a red-tape burden to the social sector.

The report by the Institute for Voluntary Action Research identified that the three areas grant-makers fall behind in is its inability to take risks, the existing complicated process of applying for grants and lacking a relationship with the grant holders.

The research, Duty of Care? How to ensure grant-making helps and doesn’t hinder, follows up on a 2012 study to find how grant-making organisations can make it “easier for people and charities to do their job well”, including improving application processes.

“Since 2012, the world has become genuinely more complex, and there is a growing recognition that making a real change to people’s lives requires organisations to work effectively within the systems they inhibit,” the report said.

It goes on to say that although some organisations have successfully adapted to meet challenges that increase transparency and safeguarding, charities are still burdened.

“Procurement processes have not been simplified,” the report said of charities rapport with grant-making organisations. “Investment is shrinking in training and development of the determined people whose skill and passion make things possible.”

The report suggests that grant-making organisations should take risks and give money to charities that are doing great work, but may have an uncertain future. By doing so, the charity could be given critical breathing room to become sustainable.

RELATED ARTICLES

How generous are Australians?

Australia’s “strong economy” to boost foundation grants

“Prove you’re better”: Social change makers encouraged to apply for awards

Other major organisations include simplifying the process so charities struggling with day-to-day organisational procedures are not overcome with additional reporting. This can be more effective if the grant-maker builds a relationship with the grant-holder.

The grant-making organisations that the report studied said it had good experiences with foundations. The report added that funders are encouraging collaboration, offers learning and networking opportunities and supports campaigns.

However, the report also found the processes behind the grants is causing frustration for organisations who are already stretched, from time lags to decision-making to the onerous reporting demands that are out of proportion to the scale of grants given.

The report said grant-makers can improve this by developing a relationship with the organisation it is funding: “Through the simple act of engaging directly and listening, funders are able to reach over the barriers that their processes can create and learn about the everyday reality of the organisations they fund.”

Funders that do invest time in learning about the organisation they fund and question its own impact on grant-holders are more responsive and more open to charities.

“It is more than merely cutting red tape,” the report said. “In a real sense, funders are taking the burden away from grant-holders to explain to themselves by actively enquiring about them and acting on what they hear.”