We acknowledge Aboriginal people as the First Peoples and Traditional Owners and custodians of the land and water on which we all rely. We acknowledge that Aboriginal communities are steeped in traditions and customs, and we respect this. We acknowledge the continuing leadership role of the Aboriginal community in striving to redress inequality and disadvantage and the catastrophic and enduring effects of colonisation.

How to use this toolkit

Welcome to this collection of practical tools and insights for funding place-based approaches. If you are a Victorian public servant designing or managing a funding agreement for community-led place-based approaches then this toolkit is for you.

This is a long document. It is structured to step you through the key phases of developing and implementing a funding agreement—you can read through it all in sequence, or click on a link below to go directly to the phase or tool you are most interested in. You can also navigate by the different kinds of funding agreement you may be working on. If you are new to place-based approaches we recommend you start from the beginning. The introduction provides an overview of how place-based approaches are defined by the Victorian Government and what is unique about funding them.

About this toolkit

Why a toolkit?

While we know what works for funding place-based approaches, we also know that many of these principles run contrary to government systems— which have been constructed around traditional approaches, shorter-term time frames, predetermined activities and the need for strict accountability to outputs. But by working to the best of our ability within these systems, Victorian public servants can produce more appropriate funding agreements for place-based approaches. And with more flexible and fit-for-purpose funding agreements, place-based approaches can better meet community needs and deliver the things which will have a positive impact in people’s lives.

Who is this toolkit for?

This toolkit is primarily intended for VPS officers and managers who are designing or managing funding agreements with place-based approaches, but may provide useful information that can be applied to funding agreements with different types of initiatives.

What is this toolkit?

This toolkit brings together existing and new tools and resources that you can pick up and use when designing new, or managing existing, funding agreements with place-based approaches.

What is out of scope for this toolkit?

You don’t need any prior experience with place-based approaches to use this toolkit, but keep in mind it is not a definitive or exhaustive guide to designing government funding agreements. It is intended to complement, not replace, existing advice such as the Better Grants by Design guide (this guide is for VPS only). It should be used in conjunction with existing tools and any guidance specific to your department.

What do we mean by place-based approaches?

Working in place is a core part of our work—but across government we do it in different ways. From tailoring large government infrastructure projects to local need, to enabling community-owned initiatives, all these ways of working are equally valuable and can support improved community outcomes.

But when we talk about place-based approaches in this toolkit, we mean initiatives which target the specific circumstances of a place and engage the community and a broad range of local organisations from different sectors as active participants in developing and implementing solutions.

Because they are driven by local need, place-based approaches all look different. They may be initiated by community or by government; they may have started out as place-based or be evolving to a more bottom-up approach over time; they may be a stand-alone initiative or form part of a broader project or suite of measures.

But while they look different depending on their area, all place-based work requires similar capabilities from government. Crucially, place-based approaches require government to take on a partnering and enabling role and genuinely share decision-making about what outcomes matter locally and how they can best be achieved. For more information see the Victorian Government’s Framework for Place-based Approaches.

What’s unique about funding place-based approaches?

Place-based approaches’ strength is that they harness local leadership to develop tailored and innovative solutions. They are not suitable for all circumstances and should complement (rather than replace) traditional government services and infrastructure.

They can be a powerful tool where an issue or opportunity:

  • is multifaceted, complex and concentrated in a place,
  • cannot be addressed through services or infrastructure alone—existing government interventions have not had the desired impact,
  • does not have a clear solution and requires the active involvement of local people and organisations to discover and develop meaningful responses,
  • requires a whole of government or cross-sectoral response, or
  • requires a long-term response.

Because place-based approaches are all different, it is key to understand the role of government as funder and the degree to which you are using a funding agreement to shape or support the direction of the initiative.

For example, government has established many place-based approaches. But they can also begin and become established by community leaders without any government involvement.

Regardless of where they begin, place-based approaches all require a different approach from government funders to reach their full potential—and how government invests in this work can significantly impact its success in improving outcomes for community.

It has been recognised by a range of stakeholders from government, to the community sector, to the recent Royal Commission into Victoria’s Mental Health System, that traditional government funding approaches (while appropriate for many traditional programs and services) can limit the ability of place-based approaches to achieve outcomes for communities.

For example, output-based funding, which predetermines the activities a funded organisation will deliver, can be less appropriate for place-based approaches. This is because initiatives often need the autonomy and agility to adjust what they deliver based on the unique and changing needs of the community.

Equally, short-term contracts may be fit-for-purpose for focused, time-limited local projects. But when the aim of an initiative is to build long-term capability and change in a community, they can significantly hinder the ability of local stakeholders to plan and deliver on bigger outcomes.

On the other hand, a range of evaluations and reviews including the Independent Review of the Australian Public Service (PDF, 17.8 MB) have identified flexible and sustainable funding as key enablers to successful placebased approaches. As government partners, it is critical that we provide:

  • Flexibility to allow local partners and the people most impacted by the issue to tailor their actions to what has the most impact for their community.
  • Commitment to ensure stability for community partners as they work over the long term (often ten years or more) to tackle complex, multi-faceted issues.
  • Trust to allow for innovation and an environment where it is safe to fail and learn. See the next page for some examples of how funding models have enabled action or caused challenges for place-based approaches.

Examples: How funding models can help or hinder local action

Communities for Children

Communities for Children (CfC) is a Commonwealth place-based model of investment supporting children and families in 52 disadvantaged communities across Australia. CfC facilitates a whole-of-community approach to support early childhood development and wellbeing with a focus on children from birth to 12 years, and can include children up to 18 years and their families.

How funding helped:

  • Community-focused: A 2010 evaluation found providers preferred the CfC funding model to direct funding because it was community-based and built on local connections. Funding was critical to improvements in local service coordination.
  • Asset mapping: The asset-mapping component of CfC helped communities to tailor CfC programs, activities and services. Community consultations enabled CfC stakeholders to understand the needs or aspirations of community members, fund and design programs and services to support these needs, increase awareness of programs, and help engage families.

How funding hindered:

  • Less flexibility: Sites had to provide budgets for the entire program early in the establishment of CfC, resulting in the perception that funding could not be adjusted over the three-year period.
  • Reporting burden: Accountability requirements put substantial burdens on lead organisations, especially since they have also had to assist many service providers with their reporting.
  • Competitive tendering: Competitive tendering caused tensions in some CfC sites and funding was not always sufficient to fund the workload adequately.1

Community Revitalisation

Community Revitalisation is a Victorian place-based approach that involves communities, their local leaders, and government working together to increase economic participation for people experiencing complex barriers to employment. It began in 2017 in five communities and the next phase, building on learnings from a 2019 evaluation, is currently being implemented.

How funding helped:

  • Well auspiced: A 2019 evaluation found that auspicing arrangements that were in place for grant funding were appropriate and working effectively.
  • Helping to leverage other funding: The 2019 evaluation also found that Community Revitalisation sites leveraged at least $1.75 million in additional funding to support or complement their initiatives. They were also able to leverage at least an additional $0.8 million in the form of in-kind contributions to support delivery of Community Revitalisation initiatives.

How funding hindered:

  • Unclear objectives and KPIs: The 2019 evaluation noted that funding agreements were seen as complex to administer. They did not consistently incorporate specified outcomes for CR activity and were not always clear in terms of project objectives and KPIs. This might have been attributable to the fact that, early in the life-cycle of place-based activities, the funding department did not clearly define the scope and achievable outcomes.
  • Complex: The 2019 evaluation also found that multiple funding agreements were in place for Community Revitalisation activities at some sites. Stakeholders indicated this presented administrative complexity in a local government setting.2

Better Futures Local Solutions

Better Futures Local Solutions was a Commonwealth placebased policy aimed at helping families in 10 communities find jobs and provide opportunities for their children. It also supported communities to develop solutions to address disadvantage in their area and strengthen community infrastructure.

How funding helped:

  • Flexibility: Flexible funding fostered local innovation and collaboration. Local capacity to plan, think strategically, share knowledge and learn from doing was strengthened.
  • Encouraging collaboration: Better Futures Local Solutions required applications for funding to be locally brokered. Increasingly proposals were developed collectively, and many projects involved applications and delivery by a consortium of partners—a significant departure from the norm of community organisations bidding against each other and delivering funded services in isolation.

How funding hindered:

  • Inadequate funding amount: The funding amount provided to each site was considered too small to effect substantial change.
  • Inadequate time to develop proposals: Adequate lead time between the establishment of local advisory groups and the first funding round would have enabled a more strategic approach.
  • Short-term: Funding of Better Futures Local Solutions ceased 12 months earlier than expected, meaning the initiative was cut short before it could have significant impact.3

1 Kristy Muir, Ilan Katz, Ben Edwards, Matthew Gray, Sarah Wise, Alan Hayes and the Stronger Families and Communities Strategy evaluation team’s National evaluation of the Communities for Children initiative (2010)

2 First Point Consulting’s Community Revitalisation Program evaluation (2019)

3 The Brotherhood of St Laurence’s What’s next for place-based approaches to tackle disadvantage? (2015)