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To design an effective funding agreement, you first need to clearly scope where you will be working, who you will be working with, and what role you will have as the funder.

Place-based approaches are typically based around a ‘backbone’ or lead organisation (or group of organisations) that are located in the local community, hold the funding, and coordinate local partners to meet their shared outcome.

Place-based approaches can and do become established by community leaders without the involvement of government—meaning a clear backbone and focus may be in place by the time government comes into the funding conversation.

Government also establishes many place-based approaches and you may be responsible for determining the outcome the funding is seeking to achieve and the lead organisation that will receive the resources via a selection process.

With large variations in the type of support government can provide, it is important to be clear on what is already happening in a local area, the role you want to play, and subsequently the focus and type of investment to make.

To ensure a thorough scoping and/or selection process, you should build your knowledge about the local community, its issues, opportunities demographics, and local power dynamics. It is important to gather a broad range of information.

This includes from inside of government, to understand where we are already funding or working with local partners and ensure action is as aligned and efficient as possible. And also from outside of government, to build a strong understanding of local community leaders and members and challenge any of your own biases.

Another key factor to consider from the beginning is the role that competition will play. Competition often forms a key part of government funding processes. But for place-based approaches which rely deeply on local partnerships, it is important to also consider how processes can promote collaboration between local organisations.

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 revisiting the purpose or direction of an existing funding agreement.

Scoping in action: Working Together in Place

Working Together in Place was a Victorian Government initiative that worked with five existing place-based approaches across the state to test new ways of working and learn about how government can best support locally-led action. It began in 2019 as part of the Whole-of-Government Place-based Agenda, and included a scoping process via key steps:

  • Determined objectives and scope of agreement: The team started with an existing budget allocation and asked key questions to narrow down and clearly define:
    • the funding’s purpose (to come alongside existing initiatives and demonstrate how better support from government can help local leadership disrupt disadvantage, rather than start new initiatives),
    • scope (a handful of locations to not dilute resources, with a mix of regional and metropolitan to ensure a broad range of lessons were learned about placebased work in Victoria)
    • the type of role they would play as government funder (making a commitment to dedicate government staff resources to partnering and show up in a more relational way).
  • Selected sites based on data analysis and a readiness assessment: Because one of the purposes was to support areas facing entrenched disadvantage, the team initially filtered possible sites by analysing data like the Australian Bureau of Statistics’ Socio-Economic Indexes for Areas. The team then created readiness assessment criteria to narrow it down further and identify areas with existing place-based approaches (whether mature or emerging) and a willingness on behalf of local leaders to dedicate time to testing new ways of working with government. To conduct the assessment, they first talked with internal government stakeholders and regional directors with knowledge of local areas. Once there was greater authorisation, the team met with external local stakeholders to understand context, brief them on the project and gauge their willingness and readiness to participate.
  • Gained authorisation: The team regularly briefed key decision-makers throughout the process to ensure there was buy-in for the purpose, scope and shortlisted sites. Once the readiness assessment was completed, final sites were proposed via a Cabinet submission and approval was received to undertake a negotiated grant process.

Tool: Scoping questions

What is this tool?

This framework of questions was developed by the Institute for Voluntary Action Research (PDF, 673 KB) to support funders in the planning of place-based approaches. The questions are linked to key stages in the development of place-based work: rationale, design and implementation.

How do I use it?

This tool can be used to organise a conversation with your team responsible for planning a place-based funding agreement. The purpose is not to identify ‘good’ or ‘bad’ practice but rather to clarify the potential objectives, scope, recipients, etc., of investment—all of which will be critical to shaping your funding agreement.

What will I get?

A clearer understanding of the purpose of your investment that can help guide the design of your funding agreement. You can also use your findings to inform briefings on the business case, investment concept or project plan for key decision-makers— particularly where authorisation to devolve decisionmaking or work in a more relational way is required.


1. Why is a place-based approach being considered or used?

One or more of the following circumstances may indicate when a place-based approach should be considered:

  • To target a particular issue or opportunity
  • To enable self-determination
  • To address cold spots
  • In response to changes in policy/external context
  • To test a model or approach
  • As a way of targeting areas of high disadvantage
  • Because you are by definition a ‘place-based funder’ with a specific geographic remit/focus.

2. Who is proposing funding a place-based approach?

  • Government
  • Cooperative group of local stakeholders
  • Established community-led approach

Government has established many place-based approaches, but they can also begin and become established by community leaders without any government involvement. Understanding who is proposing funding a place-based approach and what stage of development they are at will help you understand your role as funder and the degree to which you are using a funding agreement to support and/or shape the direction of the initiative.

3. What does 'place' mean?

  • Street
  • Neighbourhood
  • Town
  • City
  • Local Government Area

The geographical scale of the place-based approach should be shaped by the rationale and will affect the resources needed to deliver on its ambition. For example, the geographic scope may differ if the approach is proposed for a metropolitan area or a regional city, town or local government area.

4. What contribution are you seeking to make?

  • Responsive funding of ‘good things’
  • Building community assets
  • Strategic systems change

Understanding the contribution you hope to make will be closely linked to why you wish to work in a place-based way. Think about what you hope will happen. For example, are you looking to provide funds for isolated projects that support people in an area, build community assets for a particular cohort, and/or make investments towards systems change?

5. What is your attitude towards risk and uncertainty?

  • Risk averse
  • Comfortable with risk

This question focuses on your tolerance of failure/uncertainty. Place-based work takes time and outcomes may emerge slowly. Risk is about much more than due diligence and will need considering from multiple perspectives, for example: program level; organisational level (for yourself as funder and for key partners); resident. It may be helpful to frame your place-based approach as exploratory and see ‘progress’ as a long-term journey.

6. What is your position on impact?

  • Tangible, measurable difference
  • Learning about what happens

‘Success’ means different things to different funders. Place-based approaches can be an opportunity for learning and trying new ways of working. But this also means thinking about success in a different way. If you are embarking on exploratory or community-led work there may not be a predetermined end point to measure against, and different processes and monitoring systems will need to be in place. It might mean focusing on outcomes rather than outputs.

7. What is your existing knowledge of the area?

  • Low
  • High

Consider what you know, how you know it and what you might need to find out. There are different ways of doing this and it often depends on the scale of contribution. The place-based guide includes guidance on meaningful engagement that you might find useful when developing your knowledge of a local community and its stakeholders.

8. What duration of involvement is required?

  • Short-term
  • Long-term

Consider how long you need to work in a place. Are you committing to working in an area in the long term or using geography to focus your work within a time limit? What are the implications for how long you need to be there and how to exit? Keep in mind place-based approaches often require a 10+ year commitment to deal with complex or entrenched issues. Funding over multiple years can help give confidence to communities, enable a sense of security for organisations, and allow adaptation to new ways of working and building relationships.

9. Where will control sit?

  • Funder-driven
  • Community-led

Think about who is defining the local need and determining how to best respond. Will the work be community-led or driven by what you—as a funder—have identified to focus on? Remember, if you are not willing to ensure that at least some control rests with the community, you are not empowering in line with the spirit of place-based approaches. If so, it may be worth revisiting the Framework for Place-based Approaches (PDF, 7.9MB) to determine the clear role of government and community in the work.

10. Who will you need to work with?

  • Grantees only
  • Multiple stakeholders

Relationships and partnerships are a central feature of place-based approaches – whether in terms of having a trusted source of local information / insights or the co-design and implementation of initiatives. Place-based work is often about sharing power, respecting local knowledge, having a degree of pragmatism, and accepting some amount of risk.

11. What kind of relationships are required?

  • Contractual
  • Relational/collaborative

What kind of relationship will help you to meet your motivation and desired contribution? Contractual (traditional grant-making), engaged (an informed and supportive grants process) or relational/collaborative (where you are working alongside grantees and other partners)? Keep in mind if the initiative is seeking to influence and shift systems, this will require a more collaborative and trusting approach from government. The type of relationships required will also inform what role you take on (see below).

12. What will your role be?

  • Arm’s length
  • Embedded

When working in this way it is crucial to communicate clearly about the role you intend to play and be aware of the implications this might have for others involved. This toolkit’s spotlight on enabling collaboration instead of competition when developing contracts might also be helpful in understanding your role.

13. What commitment of staff time/effort is required?

  • Low
  • High

The commitment of staff time required in a place-based approach links closely with the choice of geographic focus, overall motivation and style of approach. Placebased work can be resource intensive; to engage meaningfully, and to work in a cooperative, exploratory way, takes time as well as skills.

Spotlight on: enabling collaboration instead of competition

Place-based approaches rely heavily on collaboration between local stakeholders. It is therefore critical to consider how grants processes will be received by local organisations and how they can be designed to support providers to build productive partnerships.

Carefully considering competitive tendering

Strong relationships and collaboration between local partners are a key success factor for place-based approaches. But these can be compromised when local stakeholders are incentivised to compete against one another for limited resources, rather than to work together to achieve the greatest impact for community. Competitive tendering is key to how government establishes many funding agreements and ensures value for money. For place-based approaches, it is important to carefully consider how tender processes are designed to ensure they do not undermine the ability of providers to form partnerships and deliver against the funding objectives.

Alternatives to competitive tendering

By taking the time to complete rigorous risk assessments, stakeholder mapping and a local readiness assessment, it may be possible to identify a clear lead organisation without a competitive process. A readiness assessment involves talking with local stakeholders inside and outside of government to understand what organisations are already working in the area and their ability to work in partnership on a shared outcome—see the following Partnerships Readiness Checklist tool.

Encouraging collaboration within a competitive process

Of course, the imperative to support collaboration must also be balanced against government probity requirements. It is also important that government considers a wide range of organisations beyond just the ‘usual suspects’. If you are undertaking a competitive process, look for opportunities to encourage collaboration. For example by:

  • Consulting deeply within a local area to understand existing relationships and how best to communicate the funding opportunity
  • Including place-based principles in funding or program guidelines to set expectations around collaboration and governance for applicants at the start of the grant communication process and to allow you to assess applications against these conditions.
  • Strongly encouraging applications from consortia or partnerships of organisations. For example you might include a clause in funding guidelines stating, “submissions from partnership-based consortia are strongly encouraged, to draw together the full range of experience and capabilities required to deliver the placebased approach.” You should also be mindful that forming a consortia can mean a significant upfront investment of time and resources on the part of participating organisations, and consider what support you can provide to applicants so that smaller organisations are not disadvantaged in the process.
  • Building the requirement for the successful organisation to embed collaborative local decision-making processes into the funding agreement.

Ensuring strong risk management

Strong accountability, probity and risk management should form the basis of all grants processes, whether contested or not.

Strong risk assessment processes are particularly important for place-based approaches, which involve sharing power and decision-making with local organisations and so involve an inherent level of risk.

All risk assessment should be in line with the Victorian Government Risk Framework and your department's risk plan.

You can use your departmental grant guidelines and the Victorian Government’s Better Grants by Design risk management process to guide your process (this guide is for VPS only).

Your department’s intranet or central funding area may also be a useful source of information and guidance to ensure you are in line with probity and risk requirements.

Case study: Events Gippsland

The Events Gippsland Collaboration Fund was established in 2021 to support the region’s councils to compete as one voice for events and to drive recovery across Gippsland communities with a reignited events industry.

Building on a successful pilot model that demonstrated the benefits of a collaborative approach and the development of a Regional Events Strategy, the Latrobe Valley Authority provided a further $250,000 to the regional tourism board Destination Gippsland to establish the Events Gippsland Acquisition Committee and dispense funds to the events it approves. Additional funding of $500,000 was also secured through Regional Development Victoria’s Regional Recovery Fund.

The Committee includes the six local councils within Gippsland, as well as departmental representation from the Latrobe Valley Authority, Regional Development Victoria and Sport and Recreation Victoria. They meet monthly to decide what events will be funded based on agreed assessment criteria like return on investment, how it builds community capacity, and how it promotes the region. All funding is matched by local councils.

As this model has evolved over time, Destination Gippsland, State Government and local councils have brought proposed events to the group for joint deliberation and consideration. This forum has reduced the ability for event proponents to play councils off against each other and get into ‘bidding wars’ over attraction fees. The collaboration has also resulted in greater coordination, information sharing, identifying Gippsland wide benefits and reducing costs through joint agreements. The model has also helped councils collectively build their capability in planning and delivering events and is currently focusing on data capture and evaluating what makes a successful event.

Events Gippsland has plans to grow their acquisition fund and strengthen the collaboration that currently exists, ensuring that their place-based approach addresses local priorities and has long term sustainability.

Tool: Partnerships readiness checklist

What is this tool?

This partnerships assessment tool was developed by VicHealth (PDF, 880 KB) to help reflect on and evaluate the effectiveness of partnerships.

How do I use it?

Ideally, the checklist should be completed by all potential partners in a local area. However, if you do not yet have authorisation or it is not yet appropriate to talk with partners outside of government about funding opportunities, you can also use it as a guide to support discussions with regional departmental staff to understand the existing relationships and issues in an area.

What will I get?

An understanding of the readiness of your and local partners’ readiness to engage in a place-based approach. You can use this to inform whether you should invest and the focus of your investment (e.g. investment might focus more on local capacity building for less mature partnerships). It can also identify key areas of weakness that can be identified and addressed in the partnership (e.g. convening partners with a view to creating greater clarity on objectives and roles).

Other resources

  • The Collective Impact Forum has developed a readiness assessment for a group considering using the collective impact approach to determine if collective impact is the right approach for the social issues, and the extent to which the conditions for success are in place for the initiative to succeed.
  • The Tamarack Institute (PDF, 457 KB) has also created a tool to measure partners’ readiness to engage in a Collective Impact initiative.
  • Collaboration for Impact has developed the Collaborative Change Cycle to help change makers collaborate to address complex social issues. Its ‘Readiness Runway’ phase contains many tools that can help you understand readiness to collaborate.


Rate your level of agreement with each of the statements below, with:

  • 1 indicating strong disagreement
  • 2 indicating disagreement
  • 3 indicating not sure
  • 4 indicating agreement
  • 5 indicating strong agreement.

1. Determining the need for the partnership

  • There is a perceived need for the partnership in terms of areas of common interest and complementary capacity.
  • There is a clear goal for the partnership.
  • There is a shared understanding of, and commitment to, this goal among all potential partners.
  • The partners are willing to share some of their ideas, resources, influence and power to fulfil the goal.
  • The perceived benefits of the partnership outweigh the perceived costs.

2. Choosing partners

  • The partners share common ideologies, interests and approaches.
  • The partners see their core business as partially interdependent.
  • There is a history of good relations between the partners.
  • The partnership brings added prestige to the partners individually as well as collectively.
  • There is enough variety among members to have a comprehensive understanding of the issues being addressed.

3. Making sure partnerships work

  • The managers in each organisation (or division) support the partnership.
  • Partners have the necessary skills for collaborative action.
  • There are strategies to enhance the skills of the partnership through increasing the membership or workforce development.
  • The roles, responsibilities and expectations of partners are clearly defined and understood by all other partners.
  • The administrative, communication and decision-making structure of the partnership is as simple as possible.

4. Planning collaborative action

  • All partners are involved in planning and setting priorities for collaborative action.
  • Partners have the task of communicating and promoting the partnership in their own organisations.
  • Some staff have roles that cross the traditional boundaries that exist between agencies or divisions in the partnership.
  • The lines of communication, roles and expectations of partners are clear.
  • There is a participatory decision-making system that is accountable, responsive and inclusive.

5. Implementing collaborative action

  • Processes that are common across agencies have been standardised (e.g. service standards, data collection and reporting mechanisms).
  • There is an investment in the partnership of time, personnel, materials or facilities.
  • Collaborative action by staff and reciprocity between agencies is rewarded by management.
  • The action is adding value (rather than duplicating services) for the community, clients or agencies involved in the partnership.
  • There are regular opportunities for informal and voluntary contact between staff from the different agencies and other members of the partnership.

6. Minimising the barriers to partnerships

  • Differences in organisational priorities, goals and tasks have been addressed.
  • There is a core group of skilled and committed (in terms of the partnership) staff that has continued over the life of the partnership.
  • There are formal structures for sharing information and resolving demarcation disputes.
  • There are informal ways of achieving this.
  • There are strategies to ensure alternative views are expressed within the partnership.

7. Reflecting on and continuing the partnership

  • There are processes for recognising and celebrating collective achievements and/or individual contributions.
  • The partnership can demonstrate or document the outcomes of its collective work.
  • There is a clear need for and commitment to continuing the collaboration in the medium term.
  • There are resources available from either internal or external sources to continue the partnership.
  • There is a way of reviewing the range of partners and bringing in new members or removing some.

Checklist score

  • 35–84: You should rigorously question whether to invest in the partnership, or consider focusing any investment on building the capabilities of local stakeholders to work collaboratively on a shared outcome in the future.
  • 85–126: The partnership is moving in the right direction but it will need more attention if it is going to be really successful.
  • 127–175: A partnership based on genuine collaboration has been established. The challenge is to maintain its impetus and build on the current success.