We’ve put together some FAQs to define our use of terms and asks
Q. What community services and activities are funded by central government?
These are wide-ranging and include initiatives in healthcare, education, social services, housing, community support, cultural and arts initiatives, environmental efforts, and emergency services. Funding may be provided as grants or government contracts for services with tangata whenua or community and voluntary sector organisations from entities like the Ministry of Social Development, Oranga Tamariki, Department of Internal Affairs, Ministry of Education, Housing New Zealand, Creative New Zealand, Department of Internal Affairs, and the NZ Fire Service.
Q. Why does government fund service delivery by community providers?
Government funding for community-based providers helps bridge gaps in access to essential services, reduces inequalities, and enhances the overall quality of life for people. The funding allocation is often based on policy priorities, societal needs, and the government’s commitment to ensuring that basic services are available to everyone, regardless of their socioeconomic status.
Q. What are the core operating costs or ‘basic running costs’ that need to be reflected in funding agreements?
These encompass salaries and operational expenses vital for sustaining an organisation’s essential operations. This includes costs such salaries, rent, staff training, information technology, accounting, reporting, research, and evaluation.
Q. Why are we suggesting a minimum of 35% of a budget to cover operating costs? And what do we mean by it?
The 35% minimum guideline is crucial for community groups. This money helps them run smoothly by covering things like salaries and administrative costs. With this amount, they can offer consistent services without disruptions and stable employment. It also provides stability and helps them handle unexpected issues and enables their growth and making a bigger difference. A recommendation that was put forward by Martin Jenkins as well in their Social Service System, The Funding Gap and How to Bridge it report which can be found here.
Q. Why are CPI increases needed?
When an organisation receives funding for a certain period, a fixed sum is provided for the duration of the agreement and broken into instalments. For instance, if an organisation receives funding for 3 or 5 years, they receive the same sum each year, even if inflation causes prices to rise. As a result, the organisation must cover the increased costs caused by inflation on their own as they pay for various goods and services. Our suggestion is for the government to include the inflation rate in the grant or contract for the entire duration of the agreement.
Q. What do we mean by ‘high trust’ funding?
‘High trust’ funding means that the government has a strong belief in and clear communication with community organisations that receive funds. This approach was adopted during Covid, making it easier for organisations to get funding. Instead of complex applications, simple documents like financial statements or budgets were enough. This change helped a struggling sector. Since the government showed this kind of funding works, we hope they continue with these uncomplicated processes for funding applications.
Q. What do we mean by culturally appropriate funding models?
Recognising the significance of moving beyond a uniform approach in funding models is crucial. Historically, a single approach that favoured Pākeha in Aotearoa New Zealand has proved insufficient for the future. To address this, a deeper examination of our present methodologies and increased collaboration becomes imperative. Our request centers around the development of more suitable funding models, acknowledging the need for adaptability and inclusivity.
More information can be found here:
Be the Change: Funding and Equity resource produced by Dunedin Community Builders.
The Price of Giving: Relationships and Cultural Insights as Budget Line-Items or Valued Contributions in the Sacred Vā? by Julia Arnott-Neenee and Dr Sandy Harman
Thinking About Post-Flood Support for Pasifika Communities in Tāmaki Makaurau by the Pasifika Funders Network
Philanthropy News: The Pasifika Edition by Philanthropy New Zealand
Q. Why we are asking for the Social Sector Commissioning work to be fast tracked?
In 2021, the government agreed to adopt the relational approach to commissioning services from community providers and have released an action plan for 2022-2028, which means a 7-year timeframe. While we appreciate achieving systems change takes time, we are concerned about the timeframes for achieving the changes to commissioning and the lack of resourcing for the Commissioning hub to enable faster implementations of the change. Our communities don’t have time to wait for change.
Q. What do we mean by multi-year funding agreements? Why are they important? And when are they necessary?
The recommended approach for multi-year funding is to secure funding for either a 3-year or 5-year period. Choosing multi-year funding allows organisations to plan for the long term. This involves providing job stability for staff, delivering programmes over multiple years to communities, and lessening the administrative burden of annual funding applications.
Multi-year funding is crucial for continuous service delivery, especially for programmes spanning 2 or more years. This ensures consistent service and stability for communities.
However, it’s important to note that there are cases where multi-year funding might not be applicable. For instance, when it’s not sought, or when funds are required for one-time expenses, events, or pilot programmes.
Q. What is the action plan to drive up philanthropic funding?
A. While Aotearoa New Zealand is a generous country, Philanthropy New Zealand believe there are many opportunities to drive more private funds into good causes, especially given the largest transfer of intergenerational wealth in modern history. Working alongside Government and other sectors to develop potential incentives and settings that increase the pool of givers and the amount they give would be hugely beneficial in supporting the critical work of the community and voluntary sector. The first step in this process is to share ideas and mutual goals and develop an action plan that is achievable and can be implemented over the coming years. More details on this proposal can be found here.https://fundingfitforpurpose.nz/