Once you’ve clearly scoped the purpose of the funding and who will be receiving it, you also need to design the funding agreement so that it supports local activity and meets your objectives.
While the focus areas and outcomes of place-based approaches can vary greatly, there are consistent elements that need to be resourced that you should take into account when calculating cost.
You should be clear on the amount of flexibility you are able to offer and work to align the funding agreement to this approach. As place-based approaches often require government to invest in a process rather than activities, you may also consider how you can incorporate process-based milestones and reporting requirements.
Because place-based approaches are often a different way of working for community and government stakeholders, it is important to be clear on expectations from the start. Government should be clear about what our goals are, what we can bring to the table and where our points of influence in the community and government departments are.
Equally, you should have clear and open conversations about what is expected of the place-based approach. This can ensure flexible funding enables effective and targeted local action, and does not lead to confusion about what outcomes an initiative is seeking to deliver, or how community and government will work together.
It is also important to remember that many place-based approaches, especially already established ones, receive resources from multiple funders. For example, a large initiative may be funded by various levels of government, local organisations, businesses and/or philanthropic organisations. Connecting with co-funders can allow you to find opportunities to pool funding around common objectives, or design milestones and reporting requirements so that they align across co-funders as much as possible.
The tools and insights in this section are designed to help you work through these questions and processes. Because continuous evaluation and improvement is key to place-based approaches, they can also help you if you are redesigning an existing funding agreement.
Designing in action: Community Revitalisation
Community Revitalisation is a place-based approach that began in 2017 and works in five areas across Victoria. It involves communities, their local leaders, and government working together to increase economic participation for people experiencing complex barriers to employment. In 2021 a new budget allocation gave the team in the Department of Jobs, Precincts and Regions the opportunity to redesign existing funding agreements, based on findings of an independent evaluation. To do so they:
- Determined the type of flexibility to provide: It was determined that to support local people facing employment barriers, funded lead organisations could use resources on a broad range of costs and activities—including staffing costs, wraparound supports, strategic engagement and partnership building, and data, monitoring and evaluation.
- Designed milestones and reporting requirements: The team designed the funding agreement so it was based around process-focused milestones. Rather than predetermine activities for the life of the multi-year agreement, the first milestone required the funded lead organisations to create an ‘Impact and Learning Plan’ outlining the high-level outcomes and priorities of the initiative for the four years, along with a 12-month action plan. Further milestones require regular progress reporting and the development of an annual 12-month action plan to provide oversight and ensure sites are on track.
- Embedded capability building into the process: The team also procured an independent organisation with expertise in collaboration and systems change to support funded lead organisations and local partners in the collaborative design of strategic approaches and to building their capability in facilitating place-based work, tracking progress and impact, and creating structures and processes to support greater collaboration, including engagement with local communities with lived experience, to increase the sustainability of impacts achieved.
Tool: potential funded activities
What is this tool?
A list of activities and functions that need to be resourced to enable a place-based approach to do their work.
How do I use it?
Assess which elements are already funded, for example by existing partners or organisations, and what still needs to be funded to enable local action on the ground.
What will I get?
A list of the activities that will be permitted expenditure in your funding agreement and can be used to help calculate your funding amount.
Tool
- Backbone: The backbone plays a vital role in coordinating strategic direction and governance, stakeholder communication and engagement, monitoring data collection and analysis and managing funding and communications. Whether a new organisation is set up for this purpose or an existing organisation takes on this role, it is important to fund the activities of the backbone to support the successful implementation and to ensure its sustainability.
- Partnerships: Funding needs to enable collaboration, not promote competition between organisations, to maximise the impact of local work. The literature suggests that it is important to give attention to the process of partnership building in the early stages, to allow time to develop trust and build relationships, and mechanisms for accountability. This needs to be reflected in the funding model.
- People: Some projects may directly employ staff, or staff may be involved as part of their existing roles in an organisation. Required roles may include a project officer or other staff to coordinate project staff who are implementing project elements, and staff and managers to lead the work. If staff are involved as part of their existing role, this may be through dedicated funding, or an in-kind contribution from a participating organisation. If you are resourcing a role you should consider the relevant award rate (for example the Social and Community Services Award) and ensure you resource a level of role which matches the skills and experience needed to manage or support the initiative.
- Community engagement and development: Meaningful community engagement and development is critical to success and needs adequate investment. Engaging with the community to understand the local issues and shape the solutions requires time and resources. Community development activities may be required to build local capability and readiness to participate. These activities are key for a co-design approach, where people’s participation should be reimbursed appropriately.
- Development and capacity building: Place-based approaches offer a different way of working, meaning that people will need support to work in new ways or to participate at all. For example, it is important to develop the capacity of community members to participate in decision-making and to develop the capacity of organisations and their workforce to implement a program or service in a new way. Resources needed for this include training, mentoring or investing in behaviour change approaches.
- Project activities: The various project activities that make up the initiative will require resourcing, such as the day to day running of the service or project that is being implemented.
- Overheads: Overheads include office space, meeting space, IT systems and other basic resources to enable the project to operate. Both the backbone functions and the project activities will require these resources. They may either be funded through the initiative’s formal funding, or could be provided in-kind by one of the participating organisations.
- Communications: It is important to communicate the initiative’s purpose, activities and progress to a number of audiences, including the community, funders and other stakeholders. To do this, have a singular project identity and visual brand. Adequate resources should be dedicated to communications and branding, and this function can sit within the backbone.
- Time: Place-based strategies are longterm—the desired outcomes typically involve systemic change, which takes time to achieve. The funding approach needs to recognise this and allow the necessary time. Time should be considered as a necessary resource for a place-based approach.
Tool: Flexible funding spectrum
What is this tool?
The flexible funding spectrum was developed by the Institute for Voluntary Action Research (PDF, 1,554 KB), and articulates the different forms that flexible funding can take, using examples from real funding bodies.
How do I use it?
Use the examples to help identify which type of flexible funding you are seeking to provide, taking into account the intent of your investment, the readiness of your partners and any organisational constraints you are facing.
What will I get?
A better understanding of the type of flexibility you want to and are able to provide, which can inform the types of milestones and reporting requirements you include in your agreement.
Tool
- Fully unrestricted: E.g. “Completely no strings attached, they can do whatever they want with it.”
- Unrestricted, designated: E.g. “We’ve identified an activity we’re particularly interested in, and the size of our grant probably reflects the cost of it. But, if the organisation can get some or all of the money for that from elsewhere, we’d be happy for them to use our money for something else. So we ask them to report specifically on the activity we’re interested in but make the grant unrestricted.” 3
- Broadly restricted: E.g. “We set a timeframe for spending, which helped with the trustee journey from performance management to partner.” E.g. “We can only fund in this LGA so our grant has to be restricted to work benefitting it.”
- Flexible core cost funding: E.g. “The restrictions are light and the grant can be broadly used for organisational overheads and core costs.”
- Flexible project or program funding: E.g. “We don’t offer unrestricted, but our project grants are very flexible. We’re less concerned with detail of how they deliver and more about outcomes. We approach from a learning prism and let them lead the way.”
- Restricted on request: E.g. “Applicants are empowered/trusted to apply for either entirely unrestricted funding, or for funding that goes towards core costs. Sometimes people want us to restrict their funding to make sure the work—for example supporting staff—is protected.”
Tool: Progress checklist
What is this tool?
Adapted from the United States of America Centre for Community Health and Development’s Collective Impact Progress Assessment, this checklist allows you to assess how a place-based approach is meeting the five conditions that are associated with success for collaborative, community-led initiatives: a common agenda, shared measurement, mutually reinforcing activities, continuous communication and engagement, and an independent backbone structure.
How do I use it?
Assess the current state of the initiative and determine if there are conditions you need to incentivise through your funding agreement to ensure it is effectively driving outcomes. This is particularly important for a place-based approach in its early stages where it may not yet have these conditions, or a plan to achieve them, in place.
What will I get?
An assessment of the current maturity and point in the lifecycle of the partnership. This can inform what you include in milestones and reporting requirements to ensure the funded initiative is driving impact. For example, if a place-based approach does not have clear agreed upon goals, you could require a Theory of Change1 as part of your reporting requirements, or if a place-based approach does not have a shared measurement approach in place you could include the development of a Measurement, Evaluation and Learning strategy as a milestone.
A Theory of Change is a process for mapping outcomes in the short, medium and long-term. Your department may use similar tools like an outcomes logic model or investment logic model. You can find more information about developing a Theory of Change for place-based approaches in the place-based Monitoring, Evaluating and Learning toolkit.
Tool
- Is there a common agenda?
- Are all of the necessary stakeholders at the table
- Does the group have an explicit definition of the problem in agreed-upon language to refer to?
- Has the group agreed upon the scope of the landscape it is focusing on? (i.e., Which stakeholders need/do not need to be involved?)
- Has the group written a vision and mission statement?
- Does the group have agreed upon goals, and measurable targets related to those goals?
- Is shared measurement in place?
- Is ongoing staffing assigned and funding allocated to develop and implement a shared measurement strategy?
- Have benchmarks and measures to track progress been decided?
- Have processes been established to ensure that measurement remains aligned to hold all organizations accountable?
- Is this data accessible enough so that organizations can easily course-correct?
- Are stakeholders sharing results and learning from each other?
- Have mutually reinforcing activities been established?
- Is there an up-to-date map of the players, strategies and work underway?
- Is it clear who is responsible for the different strategic elements of the initiative?
- Has overlap and redundancy between organizations been identified and minimized?
- Have sub-groups been established by locality and type of activity?
- Has a list of prioritized activities and next steps been written so that the different groups are coordinated around common agenda?
- Is there continuous communication and engagement?
- Have governance structures been put in place, such as steering committees and/or sub-groups focused on specific actions?
- Have meeting schedules been established for these groups? Will these meetings occur yearly? Monthly? Weekly?
- Have vertical and horizontal reporting processes been established? (i.e., How will sub-groups report out to the steering committee? How will groups report to each other?)
- Have decision-making processes been established?
- Does backbone support exist?
- Has a structure for the backbone been clearly decided (e.g., existing organization, new organization, hybrid)?
- Is there a funder willing to fund the creation of backbone infrastructure over several years?
- Is the backbone actively supporting aligned activities through convening partners, providing technical assistance, and recruiting new partners?
- Has the backbone organization begun to build public will with consensus and commitment through communications management, articulating the call to action, and supporting community member engagement activities?
Tool: Milestone bank
What is this tool?
Examples of milestones that have been used in other Victorian Government grant and service agreements to support place-based approaches.
How do I use it?
Consider if any of these milestones would support the objectives of your funding and talk with your department’s funding area about the potential to implement them in your agreement.
What will I get?
An idea of how to structure the milestones in your funding agreement around processes rather than pre-determined activities.
Tool
Regular reporting based around an implementation plan
When funding a place-based approach, consider basing milestones around an implementation or action plan rather than predetermined activities or outputs. This can allow reporting at the appropriate frequency (e.g. yearly, six monthly, quarterly) without locking initiatives into activities that are difficult to change over the life of the agreement.
- Example milestone 1: Implementation plan
- Example milestone 2: Six monthly progress report provided by email including activity progress, budget, milestone and KPI tracking
- Example milestone 3: Yearly progress report on implementation plan
- Example milestone 4: Six monthly progress report provided by email including activity progress, budget, milestone and KPI tracking
- Example milestone 5: Yearly progress report on implementation plan
- Example milestone 6: Six monthly progress report provided by email including activity progress, budget, milestone and KPI tracking
- Example milestone 7: Final report
Formalising a partnership
If you are funding an initiative in its early stages or without a strong governance structure, it may need to confirm its key partners and how they will work together towards their shared goals. You can consider including a Memorandum of Understanding as the first milestone to formalise the partnership and ensure relationships are maintained throughout the life of the initiative.
- Example milestone 1: Memorandum of Understanding formalising partnership
- Example milestone 2: Implementation plan
- Example milestone 3: Yearly progress report on implementation plan
- Example milestone 4: Yearly progress report on implementation plan
- Example milestone 5: Final report
Undertaking a codesign process
If an initiative is in its early stages, or is refreshing its priorities, it may need to undertake a co-design or engagement process to understand community needs before it determines its focus area and/or implementation plan. You can consider including a first milestone that releases ‘up to’ a certain amount of funding to resource this process, before requiring an implementation plan later in the funding period.
- Example milestone 1: Proposal outlining resourcing requirements to undertake a co-design process
- Example milestone 2: Common agenda and implementation plan
- Example milestone 3: Yearly progress report on implementation plan
- Example milestone 4: Yearly progress report on implementation plan
- Example milestone 5: Final report
Reviewing priorities
If you are funding a mid to later years place-based approach, it can be valuable to include a review of priorities to ensure action is still targeted at what will have the greatest impact for community. You may consider a milestone requiring an updated Theory of Change or implementation plan.
- Example milestone 1: Updated Theory of Change and implementation plan
- Example milestone 2: Yearly progress report on implementation plan
- Example milestone 3:
- Yearly progress report on implementation plan
- Final report
Targeting an element to strengthen
If you are funding a more mature place-based approach and have identified it needs to strengthen an element of its operating model, you can consider including this in your milestones. For example, if the initiative lacks a comprehensive or fit-for-purpose evaluation plan, you could require them to develop one.
- Example milestone 1:
- Implementation plan
- Current outcomes framework
- Example milestone 2:
- Yearly progress report on implementation plan
- Monitoring Evaluation and Learning plan
- Example milestone 3:
- Yearly progress report on implementation plan
- Evaluation findings
- Example milestone 4:
- Final report
Spotlight on: aligning with other funders
Place-based approaches often work with a number of funders from different levels of government and different non-government organisations. This can generate broad buy-in and reduce the risk of a single funder having too much control, but it can also result in complex funding arrangements with a large reporting burden for the lead organisation. It is important that government makes an effort to align with any co-funders to reduce administrative burden and ensure the most meaningful data is informing the actions of all partners.
With the funded organisation
Remember to consider the organisation itself when planning frequency and timing of reporting. Lead organisations may have their own strategic planning processes and annual reporting schedules. For example, if working with a local council, you could determine its annual reporting process and align your reporting timelines to that to minimise the number of reports they are required to generate in a year.
Inside government
Place-based approaches look holistically at local issues and often work across multiple government portfolios. If you are seeking new funding, consider which portfolios have a stake in the initiative and how you can establish joint funding arrangements from the start.
New Zealand’s Cross Agency Funding Framework (PDF, 1,683 KB) outlines different funding models available for cross-departmental initiatives and includes key questions to reduce transaction costs.
You can also look at how your funding agreement will work with existing funding agreements the organisation holds with the Victorian Government and look for opportunities to align or pool funding.
The Trust for America’s Health’s Compendium of Resources and Examples on Braiding and Blending Funding (PDF, 367 KB) provides an overview of different methods for pooling funding and a range of resources including free training courses.
Outside government
Place-based approaches work with a range of partners outside government. In particular, philanthropy is often a key partner to place-based approaches since their organisational objectives often focus on funding innovative and long-term initiatives. Understanding where government and philanthropy’s objectives align and where they differ is key to designing an agreement that plays to one another’s strengths and develops strong working relationships.
The Centre on Philanthropy and Public Policy’s Philanthropy and Government Working Together report (PDF, 1,786 KB) highlights some key features, challenges and benefits of government-philanthropy partnerships
Updated