Related resources for funding and capacity-building options

This report aims to inform leaders and decision-makers about the issues to consider across the public sector and for individual projects. It draws on the experience of overseas jurisdictions, mainly Australia and the United Kingdom, and provides examples of partnering arrangements in New Zealand.

This paper explores the Auditor-General's expectations around funding agreements with non-government organisations. 2005.

A list of the reports, articles, and presentations produced by the Office of the Auditor-General that discuss funding arrangements or grant programmes.  New Zealand

The Office for the Community and Voluntary Sector (OCVS) hosts interactive seminars to promote the sharing of information and good practice to strengthen relationships with the community and voluntary sector. These include full-day Good Practice in Action (GPIA) seminars and 90-minute Good Engagement seminars. The focus is on information sharing, results-based learning, and acquiring knowledge and expertise built on the good practice of others.  Many of the presentations explore the topcis of funding, accountability, risk management and the associated relationships with community sector organisations.  This page includes powerpoints, presentation notes and video.

This website includes links to key guidance material on government procurement processes.

Government procurement policies (especially in relation to legislative and inter-government commitments) are detailed in the the Ministry of Economic Development's report, Government Procurement in New Zealand: Policy Guide for Purchasers.

The Auditor-General's office expects the principles and risk-based approach outlined in its principles guide to be evident in the management of funding arrangements with Non-Government Organisations. The management of funding arrangements should be appropriate to the risks involved, such as the size and length of the funding arrangement and the "track record" of the provider.  This 2008 guidance provides direction based on the examination of nine case studies from the Ministry of Health. New Zealand, 2008.

In 2008, the Office of the Auditor-General looked at nine case studies of Ministry of Health/NGO relationships – focusing on the main funding arrangement. The OAG was interested in the extent to which its ‘Principles to underpin management by public entities of funding to non-government organisations’ (published in 2006) were evident in how a public entity (ie: the Ministry of Health) consistently managed many such funding arrangements. Amongst other things, the OAG looked at the issues encountered (from the Ministry's and the NGO's point of view), and how these were addressed. NZ government, 2008.

Good funding criteria were developed in 1999 by the New Zealand Council of Christian Social Services in partnership with the New Zealand Federation of Voluntary Welfare Organisations, and in consultation with the New Zealand Council of Social Services. A summary of Criteria for Judging Government Funding Arrangements for the Community Sector: The Views of Community Social Service Providers is available here.

The Ministry of Youth Development provides government funding and manages contracts for selected youth development services. Services for Young People: Policy and Guidelines provide information on the purpose and processes of funding for youth development across New Zealand.

This good practice guide sets out the principles that the Auditor-General expects public entities to consider – and act in keeping with – to manage funding arrangements with Non-Government Organisations. It takes a principles-based approach to guide public entities when they enter into funding arrangements with Non-Government Organisations. The guide has been developed for central and local government. 2006

This good practice guide updates and replaces the Office of the Auditor-General’s  2001 publication ‘Procurement: A Statement of Good Practice’. At the time of publication, the OAG was considering whether it would be useful to produce equivalent guidelines on grants. NZ government, June 2008

The Controller and Auditor-General investigated allegations of financial impropriety involving Donna Awatere Huata MP. Some of the money that was the subject of the allegations had originated from public sources – primarily through a series of funding contracts between an Non-Government Organisation and the Ministry of Education. As the auditor of public entities, the Auditor-General had an interest in ensuring the integrity of such funding arrangements. This report summarises the Auditor-General's findings. New Zealand, 2003.

This overarching guidance from the Office of the Auditor-General explains the range of funding arrangements and how to think about which type of arrangement suits a particular circumstance. That range covers conventional purchasing contracts, relational purchasing arrangements, grants, and gifts.  The OAG’s good practice guidelines on procurement discuss in more detail the expectations for how public entities will plan and manage arrangements to purchase goods or services. NZ government, 2008.

Tender documents legally define the service that is being purchased and must be clear and enforceable. Lessons are drawn from a dispute between Onyx Group Ltd and Auckland City Council.

These Treasury guidelines are intended to help government agencies develop better practices in contracting with non-government organisations. The guidelines cover planning, choosing a provider, negotiating the terms of the contract, managing and monitoring the contract, and review and evaluation.

The Youth Development Partnership Fund provides an opportunity for the Ministry of Youth Development, territorial authorities and young people to work together to provide new and innovative local youth development projects. The webpage gives more detail about the fund.

The Accord is a commitment by the Government of Canada and the voluntary sector to more open, transparent, consistent and collaborative ways for the sectors to work together. Its tools include a Code of Good Practice on Funding.  Canada.

Alliance is an international magazine on philanthropy and social investment. Published by Alliance Publishing Trust, Alliance provides news and analysis of what’s happening in the philanthropy and social investment sectors across the world, and a forum for exchange of ideas and experiences among practitioners. International non-government.

The Queensland Government has produced a series of 28 guides providing a reference for government officers to the processes involved in procurement activities. The Better Purchasing Guides support the State Purchasing Policy by providing information about current best practice procurement.  Australia.

In 2002, the Canadian Voluntary Sector Initiative developed a Code of Good Practice on Funding in line with the Voluntary Sector Accord. The Code aims to guide interactions between the Government of Canada and the voluntary sector on funding policies and practices. The VSI notes that the Code "is grounded in each sector’s recognition of its responsibility to be accountable to Canadians and the importance of sustainable capacity to enable voluntary organizations to serve Canadians".

The guidance in this report from the British Treasury is intended to help ensure that the principles of value for money, efficiency, sustainability of services and reducing bureaucracy are embedded in funding practices throughout the public sector. United Kingdom, 2006.

The Office of the Third Sector was created in May 2006, incorporating the responsibilities of the Active Communities Directorate in the Home Office, and the Social Enterprise Unit in the Department for Trade and Industry. Links to government funding and support strategies and programmes. International Government – United Kingdom.

This site is a resource centre for government officers who have purchasing responsibilities and for suppliers wanting to do business with the Queensland Government.  Australia.

The report of the UK Association of Chief Executives of Voluntary Organisations (ACEVO) Commission of Inquiry, making recommendations for a more effective funding relationship between the third sector and government. United Kingdom, International Non-Government, Nov 2004.

The findings in this report are a reminder from the Auditor-General that public entities need to manage contracting for services to ensure two outcomes. The first is that they are receiving value for money. The second is that the risks of actual or perceived impropriety, especially those associated with concurrent or former employment with the entity, are managed in a transparent way. NZ government, Office of the Auditor-General, 2005.

After floods in 1999, the Ministry of Health, through the Hokianga Health Enterprise Trust, funded a project by the Whirinaki community to construct a safe water supply. 

Funding for Outcomes (now renamed Integrated Contracts) is a new approach to contracting that enables holistic services funded by several government agencies to be specified in one contract. Whereas traditional contracts reward providers’ effort, integrated contracts focus on achievement – the impact of service delivery and how services contribute to improving outcomes for clients.  Ann Pomeroy, Social Policy Journal of New Zealand: Issue 31, July, 2007.

The Community Response Fund is a short-term, time limited response to address immediate cost and demand pressures the economic downturn is placing on key community-based critical social services for families, children, young and older people. NZ government, 2009.

This Ministry of Health report is a review of conflicts of interest and other matters at the Hawke’s Bay District Health Board (HBDHB). Shortly before this report was finalised, the then Minister of Health appointed a Commissioner, who replaced the board of the HBDHB (the Board). The report relates to events that occurred prior to this appointment. NZ government, March 2008.

The Ministry of Health revised their Buying Goods or Services policy, drawing together a number of separate policies and processes relating to departmental and non-departmental expenditure contracting.

In examining the reported failings of Focus 2000, an organisation providing services to people with disabilities primarily in the Auckland region, Pat Hanley concludes that the radical contracting model used by some government departments directly contributes to the failure of service provision.  Pat Hanley, Social and Civic Policy Institute, New Zealand August 2006.

This Ministry of Social Development programme is  designed to simplify the contracting process and improve the provision of services delivered by community, iwi and Māori social service providers that are funded by two or more government agencies.

Hutt Valley DHB Chair, Peter Glensor's 2006 presentation to the April Health and Disability NGO-Ministry of Health Forum. “NGOS and Contracting in today’s health and disability environment”. Tuesday 11 April. (2006).

These Treasury guidelines are intended to help government agencies develop better practices in contracting with Non-Government Organisation. The guidelines cover planning, choosing a provider, negotiating the terms of the contract, managing and monitoring the contract, and review and evaluation.

Integrated Contracts is designed to simplify the contracting process and improve the provision of services delivered by community, iwi and Māori social service providers funded by two or more government agencies.The Integrated Contracts procedures manual provides legal documents, templates and guidelines.

This Ministry of Social Development programme is  designed to simplify the contracting process and improve the provision of services delivered by community, iwi and Māori social service providers that are funded by two or more government agencies.

A third publication in the NgOIT series from Mental Health umbrella organisation, Platform. This new report discusses the contracting environment currently experienced by health and disability NGOs. The report concentrates on contracting relationships between DHBs and NGOs. NZ Non-Government, 2008.

A national contract can allow for building the capacity of community and voluntary organisations to deliver quality services. The Ministry of Social Development’s relationship with the Out of School Care And Recreation (OSCAR) Foundation is a good example.

This paper explores what is happening to government funding of voluntary organisations in Aotearoa/New Zealand is heading and what it means for voluntary organisations.  Garth Nowland-Foreman Community Solutions, New Zealand, 1995.

The third report in the NgOIT series from community mental health and addictions service sector network, Platform. This report provides a snapshot of the district health board contracting environment from the perspective of mental health and addiction community organisations. The report draws on survey information from 20 NGOs holding 87 contracts across the 21 DHBs - ranging from one NGO with one contract to one with 32. There are some shining examples of good practice, where relationships have been built on trust and a good understanding of the contribution NGOs make to a well-functioning, integrated mental health and addiction service system. These are the exception. For most NGOs surveyed, the contracting environment and their contracting relationship with DHBs present immense frustrations, and the practice described by respondents falls short of the Treasury Guidelines for the contracting relationship between the Crown and NGOs.

This multi-year strategy aimed to strengthen community-based family, child and youth focused services. This initiative represented a major shift in the way government manages NGO funding in the family, child and youth services sector. NZ government, 2008.

These guidelines are a statement of good practice for procurement. They outline the principles, considerations, and processes that should help public entities to meet ethical standards and act with integrity when procuring goods or services.Public entities are encouraged to use these gudielines to develop their own procurement policies and procedures that are appropriate to their overall business objectives and operations.

This paper from the Office of the Auditor-General explores the relationship between government agencies and non-government organisations, from the point of view of what that relationship is trying to achieve, and how that relationship is best managed.

This case study outlines how strategic funding through contracting was the key to changing provider and funder behaviour.

This case study outlines how an approach was developed to fund and contract services for non-mandated clients and children who have witnessed family violence.

Syndicated procurement involves groups of government agencies consolidating their procurement requirements to achieve improved outcomes through greater purchasing power and reduced tendering costs for market participants. The Ministry of Economic Development website includes a list of endorsed syndicated contracts available for agencies to join and questions and answers on syndicated procurement

Government agency employees directly involved in procurement can ask to have access to this secure website where they can share information and find out about training and other events, government policies and guidance they need to comply with, and access good practice resources. Any questions can be directed to: procurement@ssc.govt.nz

Guidelines for Contracting with Non-Government Agencies, for Services Sought by the Crown. NZ government. Treasury, 2003.

This Code has been developed by the Government of Canada and the voluntary sector. It recognises and considers the implications of legislation, regulations, policies and programmes on voluntary sector organisations, including the importance of funding policies and practices for the further development of the relationship and the strengthening of the voluntary sector's capacity. The Code is one of the tools to back up the Accord Between the Government of Canada and the Voluntary Sector, which is a commitment by the Government of Canada and the voluntary sector to more open, transparent, consistent and collaborative ways for the sectors to work together.

The original Code was published by the Commission for the Compact. It set the framework for the financial relationship between government and the community sector. It also set out the undertakings for both sides and what each can expect from the other. This document sets out undertakings, and shared vision for everyone involved in community and voluntary sector funding. It covers how programmes should be designed and delivered and provides seven principles for all stages of the funding process. United Kingdom, 2000/2005.

This NAO review examines the progress UK government has made towards meeting its commitments to implement full cost recovery. The commitments were made across government’s contracts with third sector providers, including charities, voluntary and community organisations and social enterprises. The commitments were originally made in HM Treasury’s 2002 cross-cutting review: The Role of the Voluntary and Community Sector in Service Delivery. They were intended to address a concern among third sector groups that government funders’ reluctance to pay for all attributable overhead costs was resulting in an effective subsidy of public service. Office of the Third Secto, United Kingdom, International Government, 2007.

This UK guidance document, published jointly by the Office of the Third Sector in the Cabinet Office and the Treasury, sends a clear message across Government that, where appropriate, funding for the third sector must be for a minimum of three years. Throughout the next three years, departments will have to report their progress to the Minister for the Third Sector by the end of October, who will in turn report that progress to the Treasury and to Parliament as part of the annual review of the Compact. International Government, United Kingdom, October 2008.

The report of a performance audit carried out in 2004 by the OAG under section 16 of the Public Audit Act.

The Local Government and Community Branch of the Department of Internal Affairs administers a range of grants and funding schemes that support local initiatives and community services, including Lottery Grants and Community Organisation Grants Scheme (COGS).

Following a review of arts project funding, Creative New NZ implemented a new funding system from February 2009. This guide explains the changes.

The Funding Information Service is a not-for-profit organisation collecting and distributing information about funding through three online databases, FundView, BreakOut and CorporateCitizens.

A list of the reports, articles, and presentations produced by the Office of the Auditor-General that discuss funding arrangements or grant programmes.  New Zealand

The ability to apply online, to check the progress of an application and to reapply by updating a previous application are features of the Grants Online website run by the Department of Internal Affairs for the Lottery and Community Organisation Grants Scheme (COGS).

This webpage gives information about the New Zealand Lottery Grants Board, Lottery Committees, other Lottery Grants activity.

Annual reports for years ending June.

In 2004, the OAG reported that NZTE needed to do considerable work to ensure that it applied sound administrative principles and standards to all grant programmes.  This follow-up audit reports that NZTE had done that work and substantially improved its administration of grant programmes. NZ government, 2008.

This organisation provides information for philanthropists, charitable trusts, foundations and grantmakers, who give money for community development. It provides services and professional development to people working in the philanthropic environment in New Zealand.

The Tertiary Education Commission Te Amorangi Matauranga Matua is responsible for the allocation of all post-compulsory education funding.

This brief article discusses the call of Dr Joel Orosz (founder of The Grantmaking School) for funders to plan for "experimental failure". Stanford Social Innovation Review, USA, July 2007.

Grantmakers can go a long way in supporting the effectiveness of their grantees to achieve their missions. Providing general operating support is one of the most powerful ways to do so. General Operating Support Action Guide and Listen, Learn, Lead are excellent starting points for anyone who is looking to master the basics.  Grantmakers for Effective Organisations, USA.

One of four research studies commissioned by the Aspen Institute Nonprofit Sector Research Fund on funding of core operating costs of non-profit organisations. Institute for Nonprofit Organisation Management, University of San Francisco, USA, Dec 2006.

This British Government site provides online access to grants for the voluntary and community sector from the Department for Communities and Local Government, Department for Education and Skills, Department of Health, Home Office and Government Offices for the Regions. Users can register free to search for grant information and to apply online.   

The UK Department of Health is responsible for setting health and social care policy in England. The Department's work sets standards and leads a "modernisation" agenda across all areas of the National Health Service, social care and public health. As well as policy documents, this section of the site contains guidance on grants to voluntary organisations in England whose activities support the Department's policy priorities. International Government – United Kingdom.

Washington-based Grantmakers for Effective Organisations (GEO) recently completed the Change Agent Project which examined ways in which grantmakers can help grantseekers be more successful. The Change Agent Project started from the premise that grantmakers are successful only to the extent that their grantees achieve meaningful results. This presentation is from GEO’s Director of Programmes, Courtney Bourns, who facilitated a series of funder forums in New Zealand in July 2008.

Grassroots Grants is a £130 million programme that aims to invest in the UK community sector. It is funded by Office of the Third Sector and delivered by the Community Development Foundation. The programme is divided into two parts: an £80 million small grants fund for community organisations; and a £50 million endowments programme to enable local funders to generate additional donations on a matched basis and invest them in endowments, thereby building their capacity to provide long-term funding for frontline community organisations. United Kingdom, 2008.

One of four research studies commissioned by the Aspen Institute Nonprofit Sector Research Fund on funding of core operating costs of non-profit organisations. Centre for Effective Philanthropy, USA, 2006.

This UK National Audit Office report looks at the cost-efficiency of making grants in the culture, media and sport sector. In 2006-07, the nine principal grant-makers in the sector, sponsored by the Department for Culture, Media and Sport received some £2 billion in funding from the Exchequer and the National Lottery and awarded grants totalling £1.8 billion. International Government, United Kingdom, 2008

One of four research studies commissioned by the Aspen Institute Nonprofit Sector Research Fund on funding of core operating costs of non-profit organisations. Centre on Philanthropy, Indiana University, USA, March 2007.

In 2006, the Vancouver Foundation (BC) met with groups across the province in an exercise called "Community Conversations." The purpose was to have frank discussions with its various stakeholders on how Vancouver Foundation could better serve their needs.  While the Foundation was praised for how it has addressed the gaps in government funding, its willingness to fund leading-edge projects, its helpful resources, and the status that a grant from Vancouver Foundation can bring to a charity, there were also suggestions for how it could better assist struggling not-for-profits. International Non-Government  (2006)

This brief article outlines the dangers of only thinking in terms of "project" funding and the value of operating grants. Stanford Social Innovation Review, USA, June 2007.

This discussion paper explores the nature of risk and how it applies to grantmaking. It sets out the challenges for grantmakers and aims to promote debate. It also looks at the experience of foundations in handling risk and the dilemmas facing the Big Lottery Fund in the United Kingdom, 2005.

The UK Office of the Third Sector commissioned two reports to estimate central and local government spending on the voluntary and community sector for the years 2000/01 to 2003/04. The reports are the latest in a series starting in 1988/89, and were carried out by the Charities Aid Foundation on behalf of the Government. The estimates are based on responses to surveys of central and local government departments, and are the best available estimates of government expenditure on the sector. The reports show that in 2003/04, central government spending on the sector was approximately £4.9 billion, and local government spending was estimated at £4.3 billion. There has been a substantial rise in central and local government funding for the sector in recent years, and these figures indicate that a greater proportion of the total funding is beginning to come through local government. United Kingdom, 2007.

The complex task of managing contracts is often exacerbated by high transaction costs inherent in negotiating, implementing, and monitoring contract relationships with vendors. Through analyses of data from a 1997 study of the ways municipal and county governments respond to transaction cost factors inherent in contract service delivery is examined. The results of the analyses demonstrate that when governments contract for services in contexts that risk contract failure, they engage in a variety of monitoring techniques to improve their ability to monitor and correct vendor performance.T Brown and M Potowski, the Association for Public Policy Analysis and Management. USA, 2002.

A critique of the market model leads to consideration of the utility of the 'public value' concept as a means of assessing the achievement of public procurement goals in a balanced way through a greater emphasis on public consultation and the impacts and outcomes of procurement. An analytical framework is proposed, based on public value, against which to assess the delivery of public procurement policies. The framework is used to analyse a pilot project conducted in Northern Ireland on increasing employment through public service and construction projects. E. Erridge, Northern Ireland, 2007.

This paper presents findings of a study examining state-voluntary sector inter-organisational relationships, and the capacity of third-sector organisations to exercise autonomy over employment matters in this relationship. It reveals how state-voluntary sector relations are not homogenous and therefore lead to differing implications for employment. In particular, three types of voluntary organisation emerge, employing, with varying degrees of success, various strategies to protect the terms and conditions of their employees in the face of cost-cutting pressures from funding bodies. I Cunningham, University of Strathclyde, Glasgow, Scotland, 2008.

The Community Internship Programme gives NZ non-profit and grassroots organisations the ability to engage skilled professionals as interns for three to six months – helping to improve understanding and collaboration between sectors. Grants from the Community Internship Programme allow non-profit community organisations to pay the salaries of staff with high-level skills to work as interns, helping community groups to improve their services, to plan strategically and become more effective.

This paper from the Ministry of Health, Health and Disability Sector NGO Working Group outlines financial pressures on NGOs, which have implications for their financial viability, the quality of service delivery and the health and wellbeing of their communities. The paper also suggests some possible ways forward. (The link is towards the end of the list of papers from the April forum). NZ Non-Government, March 2005.

This summary report by the Canadian Council on Social Development documents the changing funding landscape in Canada to assess the impact on the financial capacity and long-term sustainability of non-profit and voluntary organisations. Canada, 2003.

Futurebuilders England is a government-backed fund offering support and investment to third sector organisations to deliver public services. The fund offers a combination of loans, grants and professional support to build the capacity of third sector organisations who want to deliver better public services. Most organisations have never borrowed before, so the fund aims to provide sustained, flexible and individual support to ensure investees have the right financial, managerial and governance structures to take on a loan and successfully compete for contracts in the public sector. International joint Government and Non-Government.

This resource is to help those who are funding the voluntary and community sector to make sure the organisations they fund are fit for purpose. The guide will help funders understand exactly how to assess the capacity of an organisation. United Kingdom.

The ASB Community Trust and the Tindall Foundation published this comprehensive report by Glen Saunders describing what social enterprises are and exploring what has been happening with social lending and investment in NZ.  October 2009.