Capacity-building practices of philanthropic organisations in Victoria
Creators: name: Vega Gil Espinosa, Natxielly
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 440712
subject: Social policy

description: The weight of contemporary social issues has put great pressure on not-for-profit organisations (NFPs) to respond to the complex needs of the people and causes they serve, to challenge vulnerability, disadvantage, and to produce social justice. The success of NFPs is today complicated by funding relationships. The Australian third sector has been characterised by its dependence on government funding. Furthermore, there are specific issues that affect directly POs, such as low levels of accountability, transparency and data availability. <br><br> Some donors that fund NFPs see grant-making as an `investment' and some grant-making organisations have attributed NFPs' lack of success to deficiencies in their capacities to `solve' social issues. For that reason, capacity building, the subject matter of this thesis, is a concept that has gained popularity among grant-making organisations as a way of supporting NFPs' undeveloped or lacking capacities.<br><br>Despite the interest in capacity building, there is a lack of a unified definition, rigorous evaluation, and an absence of cooperation and partnership among donors supporting capacity building. This project approaches capacity building by focusing on practices described in the literature that foster the development of capacity building. This approach adopts systems theory to understand how change matter more systematic and identifies two components: the first, four levels of capacity, and the second, six essential criteria that enable the development of capacity building. <br><br>By adopting these crucial components, the present study examines the Australian third sector to identify how closely it contains these elements and to consider the conditions that might influence capacity-building practices among philanthropic organisations (POs) in the state of Victoria in Australia. This represents an area where very little literature exists about the practices of POs that support NFPs' capacities and their own capacities in Australia. POs are the focus of this project and their funding to the sector differs from that of government. These organisations are an alternative source of funding for NFPs that is characterised by support for creativity, innovation, risk-taking and accountability requirements, as well as their influence over NFPs' activities. Furthermore, POs are most often constituted as NFPs, which makes them part of the third sector having proximity to and better understanding of NFPs, as well as sharing the same struggles faced within the Australian third sector context. <br><br>To examine the POs' capacity-building practices, an exploratory multi-method study has been conducted in two phases. The first phase was quantitative: an online survey that sought to characterise all Victorian POs that practise capacity building. The second phase was qualitative; semi-structured interviews to deepen the knowledge of capacity-building practices that support NFPs' capacity building (externally). The study also explores to a lesser extent the practices that POs follow for the development of their own capacity building (internally). <br><br>The results from this project show that POs do not follow a systematic approach to supporting capacity building. The two main levels of capacities that POs support are: group capacities and organisational capacities. This focus misses individual and inter-organisational capacity building - which are also required for the sustainability of capacity-building outcomes.<br><br>The findings suggest that POs face several issues that affect the implementation of capacity building externally. The main limitation appears when POs' funding for programs and projects include elements called capacity building. The embeddedness of capacity-building grants within what are considered regular grants supporting programs and projects makes it difficult to track the capacity-building elements. Hence POs do not know the reach and scope of funding for capacity building, or the outcomes of supporting certain capacities. This does not indicate that there are no capacity-building practices that align with the six essential criteria. These practices, however, are isolated from a systematic application and have not been assessed. It is important that these practices are evaluated in the future to understand their effectiveness and the outcomes achieved at a system level. For the implementation of capacity building internally (to their own organisation), POs do not apply the same interest and resolution as when they support it externally. The findings of this study show that more and more systematic support of capacity building is required to achieve the intention of strengthening NFPs' interventions to reduce or eliminate social issues.