The Funding Network Australia

Australia








This case study was prepared by Rob John for a forthcoming working paper on corporate philanthropy, to be published by NUS Business School.

The Funding Network is a variation of a giving circle model based around public events where selected nonprofits “pitch” in front of an audience of donors (John, 2014).  These “live crowdfunding” events were pioneered by the London-based founders of The Funding Network in 2002.  It spread to other cities and in 2005 the first group outside the U.K. was initiated in Canada. The network has inspired similar initiatives in continental Europe, North America, South Africa and Asia-Pacific, some identifying as a “branch” of the U.K. organisation, while others have no formal affiliation. The Funding Network ran pilot events in Sydney, Perth and Melbourne in 2013 and is today well established in a country where collective giving is growing rapidly.

Tom Hull, TFN Australia’s General Manager says ‘right from the start we intentionally engaged corporate partners as hosts and funders; we recognised business as a key partner.’ In its first year of hosting events the support from two high profile corporate foundations, Macquarie Group Foundation and AMP Foundation, was instrumental for the network to establish and gain traction. TFN’s crowdfunding process involves five steps (see box).

Box: TFN Crowdfunding Process

  • Applications
    • Grass root nonprofit organisations submit a standardised application form at least 8 weeks before an event.
  • Selection
    • Eight organisations are shortlisted through a due diligence process and then interviewed by a panel of TFN supporters and partners including sector experts. Four finalists then invited to pitch. Presenters from the finalists all attend a professional pitch-coaching workshop, and profile stories about each program are posted on TFN’s website.
  • The event
    • The event is open to anyone registering online for a small attendance fee. After networking each nonprofit gives a six-minute pitch to the meeting followed by a Q&A. After the nonprofits leave the room, one TFN “advocate” explains why they believe the nonprofit should be supported and offers the first financial pledge. Guests can then make their own pledges with a target of raising A$10,000 (USD 7,000) for each of the four nonprofits.
  • Funding
    • After the event guests make their pledged donations online through TFN and funds are distributed to the nonprofits, with 10% withheld to cover the network’s administration.
  • Impact reporting
    • TFN tracks the progress of each project funded and maintains contact with each nonprofit, providing donors with an impact report after 12 months.

 

Many of those who sign up to attend events as guests typically work in corporate businesses.  Corporate partners provide TFN with facilities for hosting the pitching events and often invite their own senior executives to attend. Hull believes that hosting TFN events has helped some corporations see the potential for staff engagement in corporate philanthropy.  ‘A company is very likely distributing grants to nonprofits and community groups but these efforts often don’t get exposure beyond the foundation or CSR team’, says Hull, seeing the TFN platform as an opportunity to draw a greater number of executives into community engagement.

TFN is experimenting with a menu of event options that draw executives into its collective giving model. For example, a company may host an event exclusively for its staff and clients to pledge support to nonprofits in a pitching session; or the company might reserve a number of places, leaving the rest for public subscription. TFN also envisages being contracted by a company to design an event for a roster of nonprofits already supported by its community investment programme. In this sense TFN has “packaged” its core crowdsourcing model in such a way it can be flexibly tailored to meet the specific needs of a company’s community investment and staff engagement programmes.

Hull sees TFN as partner to corporates that ‘adds value by designing an event and working with in-house communications teams to market it across the company; and dealing with the administration of donations if required.’ As usual TFN works with the shortlisted nonprofits at pitch coaching to ensure that they and the corporate sponsors maximise the value and enjoyment of the event.  Corporate-focused events give the company an opportunity to match funds pledged by its staff or offer gifts in kind to early stage nonprofits. The professional services company PwC pledged A$15,000 (USD 11,000) during one pitching session, and other companies have offered desk space or volunteers to young nonprofits, a development that Hull says he is keen to promote.

So far TFN has held four exclusive events for Macquarie Group and AMP.  Of the two events designed for AMP, one of Australia’s oldest financial services companies, one aimed to promote the company’s new community investment programme, and the other an opportunity for staff to crowd fund for charities with which they had longstanding relationships.

Macquarie’s wealth management practice has partnered with TFN’s sister network in Auckland, New Zealand, where one event raised USD 68,000 and a Macquarie executive acted as a pitching coach for one of the four nonprofits presenting during the evening. Mark Barnaba, Chairman, Western Australia, Macquarie Group Limited and Chairman and Global Head, Resources Group, Macquarie Capital, was involved with the start up of TFN at the invitation of co-founder, Lisa Cotton. After helping develop the concept of TFN, he has continued to support the Network through his role at Macquarie viewing his involvement as ‘one of the most uplifting experiences in philanthropy that I have had’. Barnaba has given personally at TFN events, where ‘the feeling in the room is palpable, and certainly different to mainstream giving.’  He believes that the ‘magic of TFN is both the choice of entrepreneurs and the dynamic of people giving on the night. You really feel that if you pick a cause you are passionate about and give on the night you know it will make a discernable difference.’

Hull believes that these initial experiments in corporate involvement will help TFN ‘offer turnkey solutions to companies looking to deepen staff experience of community engagement.’ He believes that once a company recognises the team building and personal development benefits to its staff engaging in such innovative events there is a strong business case in ‘moving budgets from CSR to human resources’.

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