Certified B Corporation

Rural and regional grantmaking

Community groups in rural and regional areas continue to be excluded from the grantmaking process for a whole variety of reasons, but small grants to groups in these areas have been found to leverage many times their value for communities.

What's the problem?

Community groups in rural and regional areas are disadvantaged when it comes to applying for and winning grants. Among the hurdles they face are these:

  • Criteria for winning grants tend to focus on maximising impact. But it's easier to make a difference in the cities, where there are more people who are easier to reach and who are cheaper to travel between.
  • Grantmaking often relies on trust, which in turn relies on familiarity, and familiarity in turn relies on proximity. People in the country often live and work miles away from one another and from grantmakers.
  • Rural groups can find it hard to reach the critical mass of capacity that is necessary to reassure a grantmaker that a particular activity will be sustainable.
  • Distance tends to prevent the development of one-on-one relationships between grantmakers and rural grantseekers.
  • There is a lack of awareness in many regional areas about what is available in the way of grants.
  • Application and acquittal requirements that are familiar territory for experienced fundraisers can be extremely daunting for first-timers.

Despite all of this, people in rural areas have a right to enjoy services comparable to those available to their city cousins.

How can we open our grants up to rural and regional communities?

A report from the US National Committee for Responsive Philanthropy (NCRP), Rural Philanthropy: Building Dialogue from Within, makes a number of suggestions.

  • Offer flexible, multi-year grants that cover overheads.
  • Use umbrella organisations or intermediaries, such as the Foundation for Rural and Regional Renewal. This saves everyone from reinventing the wheel.
  • Build local endowments. This is more of an American way of doing things, but it's an option.
  • Fund organisations whose mission is to change stereotypes about rural life.
  • Organise events at which rural groups can discuss funding with a number of grantmakers at the same time.
  • Develop impact measurements appropriate to low-density populations.
  • Provide long-term funding that allows capacity-building.
  • Actively promote rural groups that can show they are effective.
  • Tighten up your timeframes. What may seem like acceptable delays to experienced fundraisers can be intolerable to small communities. Those delays can rob a community development opportunity of its local enthusiasm and support.
  • Simplify application, monitoring and reporting requirements.
  • Be prepared to go the extra mile - if an application sounds good in general but the project budget is inconclusive or inconsistent, for example, telephone the applicant and ask for an explanation.
  • Encourage applications that include community partnerships and in-kind support at the local level - this encourages self-determination and sustainability.

What does DGR status have to do with it?

DGR stands for deductible gift recipient. An organisation with DGR status can allow donors to claim a tax deduction on their contributions.

Only certain types of groups (based on an archaic Australian tax law definition of "charity") qualify for DGR status. Many worthwhile community organisations doing great work don't qualify.

Establishing an organisation that meets DGR requirements, and then applying for and maintaining that status, sucks up a huge amount of time and a whole lot of resources. This rules out many small groups and can lead to significant regional and rural disadvantage.

While it might be out of the question for you to dedicate all of your funds to groups without DGR status, you could consider setting aside a portion of your grants budget for those groups.

Why should we bother?

Small groups can do a lot with a small amount of money. Even small grants can help to legitimise a community's work and introduce a group to philanthropy and leveraging bigger grants.

A Foundation for Regional and Renewal study found that $3.5 million in grants distributed had leveraged an additional $30 million for rural and regional Australia.

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