What governments keep getting wrong about community grants

Governments say they want strong communities. Communities say they want to help build them. Then the grants system gets in the way.

After twenty five years working with community organisations through Our Community and SmartyGrants, I have seen the problem from both sides of the fence. As a former public servant I understand the pressures inside government. As someone who now works closely with grantmakers and grantseekers, I see the consequences outside.

The problem is not that governments fund community projects. The problem is how they fund them.

Most grants systems are built around short term programs, complicated applications and rigid reporting rules. They make sense from a bureaucratic perspective. They provide accountability and neat administrative structures.

But they often ignore how communities actually function.

Local organisations run on volunteer effort, thin budgets and deep commitment. They do not operate on government timelines. They operate on relationships, trust and local knowledge. When funding is unpredictable or overly complex, those relationships suffer and energy drains away from the real work.

What we learned through years of community strengthening work is that the most successful initiatives share a few simple characteristics.

First, they are place based. Instead of applying the same program everywhere, they focus on the specific needs of particular communities.

Second, they involve communities in decision making. The people who live in a place usually understand its problems better than distant administrators.

Third, they are funded for long enough to make a difference. Building local capacity takes time. Short bursts of funding rarely achieve lasting change.

Finally, they recognise that community organisations are partners, not just delivery vehicles.

This is where modern grants management becomes critical.

Technology can remove much of the friction that has historically frustrated both funders and applicants. Well designed grant platforms simplify applications, streamline reporting and make it easier to share data and insights. They also allow governments to see the broader ecosystem of projects they are supporting rather than treating each grant as an isolated transaction.

Good systems need good policy

But technology alone is not enough. Good systems need good policy behind them.

Back in 2006 I was a member of the Ministerial Advisory Committee for Victorian Communities, headed by the much-missed Joan Kirner. John Thwaites, then Deputy Premier and Minister for Communities, asked us to advise him on strengthening communities – what worked, what were the barriers to success, and what were the lessons from previous projects.

Our report, Strong Communities: Ways Forward, set out what we’d learned from our consultations with ethnic communities, municipalities, police, and people working in the field. We recommended (I’m simplifying considerably, but still) whole-of-government co-operation to support increased participation by disadvantaged groups.

The lesson holds that grantmakers need to design programs that support collaboration, encourage innovation and reduce unnecessary administrative burden. They also need to listen to the organisations doing the work on the ground.

The most effective grant programs recognise a simple truth.

Communities are not problems to be fixed. They are assets to be supported.

When governments design grants with that mindset, the results can be extraordinary. Volunteers step forward. Partnerships form. Local leadership grows. Communities become more resilient and more capable of tackling the challenges they face.

When the system works against communities, the opposite happens. Enthusiasm fades, opportunities are lost and public investment delivers less than it should.

The lesson is straightforward.

If we want stronger communities, we need grants systems that strengthen communities too.