The Impossibility of Philanthropic Funding Decisions: The Australian Non‐Government Funder Experience

Abstract

Non-government funders (NGFs) are major contributors to the third sector. Literature on this private philanthropic world is limited and access to stakeholders and practices within these institutions is a barrier to empirical research. With public oversight limited to nominal federal tax law disclosure, issues of accountability are under-researched. We examine how NGFs 'account' for their grant making decisions in an Australian context. Focused on how NGFs assess likely success, it finds that assurance is constructed as part of the decision-making process through a more socialising form of accountability, based on personal interaction, in contrast to a reliance on hierarchical accountability and transparency.

Dominant stakeholders, activity and accountability discharge in the CSO sector

“…Similar concerns, that downwards stakeholders are ignored, apply when Philanthropists fund projects without considering community's interests (Coyte et al, 2013;Leat, 2004). Many Philanthropist CSOs fail to draw on community knowledge when grant-making (Botetzagias & Koutiva, 2014;Delfin & Tang, 2006;Tomei, 2013).…”

“…amateur sports clubs, local orchestras). Trusts/Grantors (Philanthropist CSOs): are essential to the CSO sectors’ on‐going sustainability. They include self‐funded, company sponsored or community funded trusts/foundations whose major revenue is investment returns (≈92%); from which they make philanthropic grants (Cordery et al., ; Coyte, Rooney, & Phua, ; Leat, ). Nevertheless, given they are largely private institutions receiving tax concessions, some question their accountability (Irvin, ; Jung & Harrow, ; Tomei, ). Service Providers: mainly receive revenues from delivering goods and services (≈72%) (Cordery et al., ) in the health, legal, museum and theatre sectors and international aid (Brown & Moore, ; DiMaggio & Anheier, ).…”

“…• Trusts/Grantors (Philanthropist CSOs): are essential to the CSO sectors' on-going sustainability. They include selffunded, company sponsored or community funded trusts/foundations whose major revenue is investment returns (≈92%); from which they make philanthropic grants (Cordery et al, 2017;Coyte, Rooney, & Phua, 2013;Leat, 2004).…”

The Primacy of, and Complexity of, Accounting for Government

“…The study reveals that institutionalised accounting information cannot be taken for granted to prevail in the circuits of power in negotiating a procurement offer between a government and a service-providing non-profit organisation. Coyte et al (2013) deals with a grant application assessment process in Australian non-government funders organisations (NGF). NGF accountability is socialised in contrast to the hierarchical accountability preferred by government funders and individual philanthropic donors.…”

“…Coyte et al () deals with a grant application assessment process in Australian non‐government funders organisations (NGF). NGF accountability is socialised in contrast to the hierarchical accountability preferred by government funders and individual philanthropic donors.…”