Our approach to funding in a tough economic climate.
The importance of listening, learning and leaning in.
Image credit: Crohn’s and Colitis New Zealand.
2024 is a tough time to be working or volunteering in the not-for-profit sector. Not only are we operating in uncertain economic conditions, but we are facing decreased funding capabilities, volunteer fatigue and a wide range of challenges across our communities.
For these organisations, securing the funding they need to grow and give back is crucial. Nikau Foundation’s contestable grants round, which runs from February – March, provides an opportunity to do just that.
Consistent with trends over the last few years, this year’s Grants Round was our biggest ever. We received over 420 applications from organisations doing good mahi across Te Upoko-o-te-Ika-a-Māui, the Greater Wellington region. Representing a 15% increase from 2023 and a 29% increase from the year before, this volume of applications is indicative not only of Nikau’s growing profile as a funder but a large demand for support.
As a community foundation, Nikau is not about one single cause. We are about our communities and the people and places of our region. This allows us flexibility with our grant-making approach, the ability to respond to changing priority areas and support our communities in meaningful, practical and relevant ways.
So, when times are tough, the demand for funding is high and we are faced with many different challenges across our communities, how do we approach funding?
In 2024, our approach was to listen, learn and lean in.
Listen
There are hundreds of not-for-profit organisations working hard to support our communities in different ways. These organisations have different focuses, different ways of doing things and are at varying stages of establishment. As a funder, it is important to acknowledge these differences, acknowledge that there is no ‘one size fits all’ when it comes to funding and recognise the role that we play. We are not here to judge or to tell not-for-profits what they need, or how to do their jobs. We are here to listen, trust and provide support where it is most needed.
This year, we were able to fund 168 applications from organisations working in a range of areas. These applications requested funding for everything from governance training to salary support to kitchen renovations and IT upgrades. By applying this lens, we were able focus less on the type of expenses requested, and more on the impact it would make for an organisation.
For many, this was help with the basics with almost 60% of applications requesting support for operational expenses and salaries. Acknowledging that these costs are the most crucial to continued operations but are often most difficult to secure, we distributed almost $600,000 to help with the basics. The types of expenses which help to keep the lights on, the rent paid and great team members in jobs, that are fundamental to running a not-for-profit, not nice to haves.
Relationships also form a huge part in making informed funding decisions, and are pivotal in assessing opportunities, gaining insights and knowledge. In 2024, we continued to place a focus in creating safe spaces, offer accessible avenues for conversation and building authentic connections with not-for-profits. Through these relationships, we can gain a more concrete grasp of the kaupapa of each organisation, how they work, why their mahi is important and their short and long-term goals.
Learn
As a funder, it is not just our job to get money out the door. It is our role to connect and learn so we are armed with knowledge of the many challenges facing our communities. By gaining this knowledge, we can make more informed decisions, direct funding to priority areas and connect our donors with organisations doing good mahi to address our region’s biggest challenges.
Through conversation, collaboration with other funders, direct feedback from not-for-profits and connection with local volunteers we were able to establish several priority areas.
The cost-of-living crisis has meant more and more kiwis are going without the basics. As a funder, we are committed to leaning in to support the organisations working to alleviate food insecurity on the ground. This year, we granted over $100,000 to organisations supporting this key issue through foodbanks, food rescue and food systems initiatives. Proportionally, food insecurity was our highest funded area this grants round, with almost 70% of applications funded.
Additionally, we paid attention to the volume of applications received in each area. This year, we received the highest number of applications from organisations working in youth (71), health and wellbeing (65) and family/whānau (44). To respond to this demand, we funded the highest number of organisations working in these areas (23, 25 and 19, respectively).
Nikau recognises that climate change and conserving our environment is a priority issue, which requires long-term funding and resources to mitigate. With significant help from Nikau’s O’Dea Illingworth Fund, which is dedicated to combatting climate change, we were able to provide almost $100,000 to support environmental organisations.
Lean in
With demand for funding so high this year, we made the choice to fund a higher volume of organisations than in previous years (168 in 2024 vs. 152 in 2023). While this meant that the average grant decreased from $6,023 to $5,743 this year, we maintained the proportion of applications funded from last year (40%).
With so many organisations facing financial challenges, we placed a larger focus on funding in a way that would contribute to long-term impact. Through this process, we considered whether our funding would serve to build the organisation’s financial resilience or exacerbate existing challenges. Although this was approached on a case-by-case basis, we made the call that, as a community foundation, it was our role to lean in and continue to offer support when times are at their toughest.
This year, we received funding applications totaling over $4,000,000. Of this, we were able to fund almost $1,000,000. Although our total funding for the round increased by 5% from last year, this still represents a significant funding shortfall. This shortfall is mirrored across the sector where demand for funding far outweighs supply. It also further highlights the role that philanthropy plays and the importance of growing generosity to support the future resilience of our communities.
As a community foundation, Nikau is both a fundraiser and a funder. As we invest and grow donations, we are playing an active part in growing the funding pie and supporting the people and places of our region, long-term. Additionally, as the conduit between local generosity and local need, we play an important role in connecting donors with causes close to their hearts. With so many generous individuals wanting to give back in ways that are meaningful, practical and responsive to community need, our role as a connector is key to inspire generosity and channel funding into priority areas.
Want to know more?
We have captured our funding during our 2024 Grants Round in the below report, which you are welcome to download.
