Napier City Council Funding Framework Workshop 2024 Insights

Napier City Council Funding Framework Workshop 2024 Jenni Giblin, Funding HQ

NZ Fundraising Environment Current Fundraising Conditions in New Zealand Post COVID-19 Challenges Limited funds to distribute Cost of living crisis Impact of Cyclones Impact on Funding Sources New Zealand Lottery Grants Board Class 4 Gaming Sector Central Government Philanthropy Corporate 2

Local Government Grants Distribution Challenges for Local Government Limited funds to distribute Need to seek their own external funding Increased pressure from communities Desire to ensure any external investment is delivering quality outcomes or transformation 3

What other councils are doing What s happening in the sector Reviewing distribution Historical grants Asking what transformation is being delivered? ROI Developing long-term partnerships with clear accountability Reducing grants Providing fundraising capability building support internal and external Status quo 4

It s unclear when the existing Grants and Funding process was adopted. A recent review of the Community Funding has shown it is not fit for purpose, limited in its impact and unnecessarily onerous for applicants applying for small grants. Current Situation Council allocated a funding pool of $846,562 in the 2023-24 financial year to community grants. In 2023, Council commissioned a review of its community funding. The review made 24 recommendations, the first of which is to develop a funding framework. Other recommendations focused on the funding model, level of grants, multi-year funding options, transparency, accountability and equity of the funding process, capacity and capability investment in community organisations, resourcing and reporting. 5

Current Community Grants Community Development Grants $104,800 (2023-24 budget) Initiatives that respond to an identified community need and use a community development approach* to foster social wellbeing. Funding is non-contestable and open throughout the year. Applications are assessed internally and peer reviewed for a funding decision. Grants range from $2,000 - $5,000. The fund has been underutilised in recent years with $57,626 awarded in 2023-24 year. Current Situation Community Services Grant $135,529 (2023-24 budget) The fund supports community and voluntary organisations to meet current and future community needs, to innovate and /or continue to provide services that benefit the Napier community, often in their time of need. An annual contestable fund, which opens in May each year. Grants typically range from $1,000-$4,000. Decisions are made by the Grants Allocation Subcommittee and are ratified by the Council. There has been a 25% increase in applications for this fund in recent years. These grants also include Rates Subsidies available to not-for-profit organisations that provide a social service in Napier. There are 7 applications on average for this subsidy per year. 6

Current Community Grants Council Projects Fund $105,470 (2023-24 budget) Community projects that are not eligible for other community grants, either because they do not fit the criteria or exceed the grant amount usually provided. A discretionary fund that is open throughout the year and assessed internally with a paper to Council for a funding decision. Funding amounts have typically been $20,000 to $30,000. Current Situation Service Agreements $549,667 (2023-24 budget) These agreements provide a range of services and programmes including: arts and heritage, sports and recreation community safety, information and advocacy Represent 62% of the total grants budget. These are non-contestable. Organisations are invited to submit proposals by the Community Strategies Team. Agreements are for three years in alignment with the LTP process, then may be renegotiated. There are currently nine service agreements with $514,653 awarded in 2022-23 year. 7

Types of grants and how are they managed continued ........ Arts and Culture Grants $50,000 (2022-23 budget) Support the implementation of the Arts Policy and is focused on increasing public art in Napier. It is non-contestable and generally initiated by Council staff sourcing ideas from the arts and community networks for ideas for public art. Applications are assessed by a panel of Council and community representatives, who make recommendations to Council. In recent years, the fund has been underutilised with only 34.4% ($17,200) distributed in 2022-23 year. Youth Development Grants $7,000 (2022-23 budget) Small contestable fund for young people aged 12-24 years. Napier Youth Council makes the decisions, which are then approved by Council. Grants are for individuals to support them achieving their goals in musical, sports and political events and are between $100 and $1,000. In 2022-23 financial year, $7,000 was awarded to 15 individuals. Current Situation Bequests Council manages three bequests. Interest from the funds of two bequests provides small grants to selected community groups that deliver services aligning to the bequest s critieria, e.g. School prizes, Christmas community lunch. Distribution has been minimal over the past few years (less than $1,000). 8

But wait ........... theres more! Council also offers grants and sponsorship for economic development projects and events. Funding comes from Economic Development, Events, Te Waka Rangep budgets. Current Current Situation Situation These were not part of the recent review but our brief for the Funding Framework does include looking at how Economic Development grants and those managed by Te Waka Rangep could fit within the Funding Framework. In-Kind sponsorship?? E.g. Traffic management; venue hire Council staff also promote and, in some cases administer grants on behalf of other organisations, e.g. Creative Communities Grants on behalf of Creative New Zealand, and Keep Napier Beautiful Grants (under $500) for Keep Napier Beautiful. These grants were not subject to the review. 9

Future Planning What do we need to consider? 10

There is no legal and statutory requirement for Council to provide grants, however if Council support continuation of grants, consideration needs to be given via the Framework, to its responsibilities to keep the community informed on any decisions made in the disbursements of grants as required by the Local Government Act 2002 Legal and Statutory Requirements 11

Councils Vision Enabling places and spaces where everybody wants to be 12

Financially sustainable Council A great visitor destination Council s Strategic Priorities Nurturing authentic relationships with our community and partners Spaces and Places for all A resilient city the ability to thrive and withstand impacts, knocks and shocks 13

Key Principals to Consider Does Council want to change the distribution of funds or stay with status quo? Does Council want to continue to grant the same quantum of funds? Does Council want to have the same number of funding rounds per annum or increase the number of funding rounds? Does Council want to introduce impact measurements across the funds? Does Council want fund applications and fund distributions to be more transparent? Does Council want to align the funding process with the annual budgetary process? What does success look like to Councillors as the result of giving community grants? 14

Community Development Grant Option Description Status Quo Continue fund as is 2023-24 year $2,000-$5,000 grants Decisions made by Council staff A discretionary, non- contestable fund Comment The fund is under-utilised and has been underspent for the last three years possibly due to low awareness of its existence and low level of grants given (staff comment from Funding Review) Administratively heavy for such small grants Budget $104,800 for Reduce or increase funding Reduce to 55% of current budget which is what is currently being granted OR Increase size of grants Grants are already at a very low level and possibly not worth the effort required to apply for such grants Small grants have very limited impact in the community. Greater impact can be gained with larger grants If larger grants are given, non- contestability may be questionable Combine funding with Community Services Grants Make Contestable Larger combined funding pool Fairness and equity Transparency More efficient and effective process

Community Services Grants Option Description Comment Status Quo Continue fund as is The fund is over-subscribed This fund provides rates subsidies to community organisations (approx. $18,000 p.a.) Rates subsidy requests have declined with rent requests increasing Administratively heavy for small grants Budget $135,529 for 2023-24 year $1,000 - $4,000 grants Decisions made by Grants Allocation Subcommittee and ratified by Council An annual contestable fund Reduce or increase funding Reduce the total budget for this fund Increase the size of grants to make more worthwhile Grants are already at a very low level and possibly not worth the effort required to apply for such grants Reducing the total would mean even more organisations miss out on this support Combine Fund with Community Development Fund grants Make Contestable Larger combined funding pool Fairness and equity Transparency More efficient and effective process

Service Agreements Does Council want to establish an Expression of Interest process (allowing new groups to apply) or continue to roll over funding? Key Questions Does Council want to distribute funds via the LTP process or set up a process outside of that timing? Is Council happy with the current budget allocation or look to reduce/increase over time? 17

Service Agreements Service Agreements are non-contestable There is no transparency around which organisations hold agreements, what the service is they hold them for, or how much they receive over the three-year term of the agreement 18

Service Agreements Option Description Status Quo Non-contestable, three yearly funding Agreement can be re-negotiated every three years aligned to LTP process Nine agreements currently totalling $549,667 These grants support a range of large and small community organisations Community Strategies Team receives proposals Comment Some agreements have been in place for over 15 years and origin for them no longer known Historical funding agreements result in a dependency on NCC Doesn t allow for new emerging organisations to apply Service Contract holders not published. Even current recipients do not know what other organisations have a service agreement Continue to fund same quantum via a separate contestable process aligned with LTP Separate fund established for service agreements on 3 yearly basis Services align with Council s stated strategic priorities Invite applications Clear criteria and transparent process required. Impact reporting will enable NCC to measure success Develop partnership model Need to manage any change with historical service contract holders

Service Agreements cont.... Option Reduce or increase current budget Description Service contracts budget is set according to number and size of contracts negotiated three yearly Start afresh with contracts Comment Depending on how many contracts and how large the contract amounts are will establish a budget for this type of funding (within limits) The opportunity to do this three yearly when setting Council LTP budgets Continue to Fund Service Agreements with a reducing budget Over time look to reduce distribution amount and review ROI on a three yearly basis with a view to encouraging service contract holders to become more self- sufficient and financially self- sustainable Consideration for the optics on NCC no longer funding some contracts Capability support or in-kind support could be offered Discontinue Service Agreements Community organisations would be negatively impacted

Council Projects Fund Option Description Comment Status Quo Discretionary fund for projects that are not eligible for other grants Projects are brought to Council by the Mayor or Councillors Organisations are invited to develop a proposal. Staff make recommendations to Council No timeframe attached to process of applying Ad hoc but flexible Very broad criteria for funding Most proposals $30K + $50k awarded in 2022-23 year Reporting?? Reduce/increase amount for projects Align to Council Strategic Priorities Have structure around process and timeframe for applications In-kind support could be added here such as waivers for Council service charges (e.g. hall hire, traffic management) Would require organisations to better plan their projects Makes more efficient administration of the fund if a set timeline and known process Applications may also fit events, M ori or economic development funding Discontinue this fund Capability support or in-kind support could be offered

Other Funds This includes small funds Arts & Culture Fund, Youth Development Funding, Bequests Option Description Comment Status Quo Youth Funding is contestable, the others are not Youth Funding is advertised, the others are not Staff seek applicants for Arts and Culture funding Arts and Culture Funding has been underutilized over the last three years Youth funding is for individuals rather than organisations Bequests are earning very little interest at the present time, so there is very little to hand out Combine these funds into the other community funding and make contestable (not bequests) Discontinue these funds The funds can still operate specifically for the areas they have been established but the administration (application, decision-making, reporting) can be aligned with the larger contestable funds The funds currently distributed are already of a small amount, any reduction would need to be assessed against cost of distribution Capability support or in-kind support could be offered Capability support or in-kind support could be offered

How does NCC transition It will be vital to manage expectations with the community if change occurs Strong communication as to the rationale for change (internal and external with other funders) In-kind NCC support Capability building support (fundraising/volunteers/good governance etc) Timing to transition 23