Effective social investment: preparing purpose driven organisations for philanthropy
By Renee Martin
Many social organisations have innovative ideas that could create real, meaningful change in communities – yet they struggle to secure adequate funding. With a theory of change and outcomes framework in place organisations are better positioned to deliver great outcomes and secure philanthropic funding.
When Sefa first started working with Blacktown Youth Services Association (BYSA), we knew they had created something special. A place where local young people felt safe, engaged and included. Where they could take responsibility for creating solutions to problems in the community and be given opportunities to lead.
Since 1988, BYSA has been changing the lives of young Australians in Western Sydney. Yet early in 2021, they were close to shutting their doors because of lack of funding.
Sadly, BYSA’s story isn’t unique. Government is traditionally risk-averse with funding, so smaller, innovative organisations that lack resources or proof of outcomes are often overlooked in favour of large charities with established service provision models.
But this is where philanthropic organisations can play an important role. They have the ability to take risks and support smaller organisations with big ideas to develop their frameworks and build capacity – giving them a fighting chance at securing government funding down the line.
Sharpening an organisation’s focus
BYSA’s lifeline came in the form of two forward-thinking philanthropic organisations: the Vincent Fairfax Family Foundation (VFFF) and Paul Ramsay Foundation (PRF). They both saw the potential in the organisation’s youth-led model, so they asked Sefa to get involved to help build BYSA’s capability and get it ready for funding at scale – and importantly help position it for government funding in the future.
Using a Theory of Change framework, we helped BYSA define its purpose and confirm the gap it’s filling. While this might sound simple, it involves some hard thinking, interrogating assumptions and drilling down to the core ‘why’ of the organisation.
It is only when organisations have identified this core purpose or problem definition, that they can start to think about what they need to measure. Enabling them to move away from the outputs and focus on the relevant outcomes they want to unlock and the impact they want to contribute to.
This then paves the way to identify the inputs, activities, and programs they need to put in place to achieve these outcomes.
Developing an organisation’s Theory of Change framework is a process of crystallisation. It gets teams on the same page and helps leaders make operational and strategic decisions. Which all in turn help reduce risks for external funders.
For BYSA, there was an interesting nexus between outcomes that are meaningful for young people as well as for funders. Young people describe how BYSA impacts them using feelings or emotive words – something that is difficult to measure. With close consultation with young people, we translated these into quantifiable metrics that align with government priorities and validated the framework.
The path towards a social impact ecosystem
With its foundations set and capabilities built, VFFF and PRF have granted BYSA multi-year funding – giving the organisation the freedom and means to prove its outcomes over the next few years, before they need to go into a funding cycle with a more diversified revenue.
At Sefa, our work with BYSA is one example of our efforts in building an ecosystem, where government, philanthropy and organisations work together to create meaningful outcomes in the community. By helping organisations build robust foundations and embedding capability we’re opening the doors for philanthropy to play their role in investing in social impact – giving organisations the resources, tools and environment they need to prove outcomes and reduce risk for government.