Academic journal article New Zealand Sociology

The Impact of Grant Funding upon Communities in New Zealand: A Case Study

Academic journal article New Zealand Sociology

The Impact of Grant Funding upon Communities in New Zealand: A Case Study

Article excerpt

Abstract

As long ago as 1601, private giving was already so well established in Britain that it justified government regulation through the Charitable Uses Act. Although private giving has a long history in New Zealand, the impact and reach of community grants giving is difficult to measure and has not been extensively studied. In this study we assess the impact of charitable community grants in New Zealand by looking at the community impacts associated with disbursements from one large charitable trust, the Lion Foundation (the Foundation), as a case study. Data were collected through an online survey from recipient organisations and analysed using standard statistical tests. We found that the work done by the organisations had a strong positive impact on health, sports, education and culture and heritage communities. We also found that, without grant funding, many of the organisations would cease to exist.

Introduction

In any society there will always be an unequal distribution of resources. Attempts to correct these distortions occur via various government or business interventions or by the actions of philanthropic organisations and individuals. Holler & Leroch (2010), acknowledge the congruency between modern economics and social justice due to human nature going beyond pure self- interested profit maximizing behaviour to seek the satisfaction derived from an overall sense of fairness for all. They maintain that humans are 'hardwired' to include the welfare of others in their utility functions.

The objectives of this study are to evaluate the non-pecuniary value of community grants and consider the outcomes achieved by community organisations. While the Foundation raises their revenue through a country-wide distribution of gaming machines, it must be stressed that our study is confined to the impact of grants and does not attempt to address issues pertaining to grant income.

Meeting community needs

Given the heterogeneous nature of society and concomitant income disparities, not everyone is in a position to satisfy their own basic human needs and it then falls upon the private and public sectors and the altruistic actions of individuals to assist less fortunate members of society. Adam Smith (as cited in Shaw et al., 2009), believed that business benefited the wider society due to its egoistic and utilitarian characteristics. Business is egotistic in the way that each individual organisation sets out to pursue its own goals, whilst at the same time, each individual within the organisation endeavours to ensure maximum personal success. There is the added benefit of advancing the good of society as a whole and thereby maximising longer term total utility. This relationship can be seen as being interdependent, as businesses benefit from operating in a healthier community.

The collaboration of Government, private businesses, philanthropists and the not-for-profit sectors can further strengthen a community in terms of social capital and community empowerment. Governments create policy, provide funding and legislation in an attempt to fulfil some of society's needs and encourage certain behaviours from other sectors. The private sector may similarly incorporate social strategies into their strategic plans to achieve their business goals and meet some of the shortfalls of needs within the community. The not-for-profit sector may both advocate and work with communities to ensure that all citizens have access to assistance.

Community giving in New Zealand equates to approximately 1.35% of Gross Domestic Product (NZ$202b. in 2012), which is considerably higher than Australia, Canada and the United Kingdom (Philanthropy New Zealand, 2012). The main funding sources include 36% from trusts and foundations (of which two thirds is generated through statutory trust funds) and 64% from personal donations and bequests (58%) and businesses accounting for around (6%) - this excludes any company sponsorship programmes. …

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