With a tight Federal budget, philanthropic investment must work harder
As governments face growing fiscal constraints, strategic philanthropy can help strengthen advocacy, organisational capability and long-term systems change.
By Neil Pharaoh
Within not-for-profit spaces, capability exists to engage with government, but it is thinly spread and under-supported.
Our research shows nearly 70 per cent of organisations engage government reactively, compared with 30 per cent strategically.
Encouragingly, more than half of organisations surveyed in this Tanck and Perpetual research recognise government engagement as a multi-layered system rather than a set of isolated activities, indicating strong demand for greater structure and strategic coherence.
However, this understanding is not yet reflected across funding practice. More than 55 per cent of survey respondents report that fundraising is not being used to address government system gaps, even as philanthropic advisers interviewed as part of the research consistently emphasised capability, risk, sustainability, and board readiness as central to their funding decisions.
The survey reveals a tension. Not-for-profits value philanthropic support, but do not experience it as a consistent enabler of advocacy or systems change. More than 75 per cent of those surveyed believe philanthropy should play a larger role in system reform.
This does not imply a call for more philanthropy; it calls for better-designed philanthropy with longer horizons, clearer system intent, and a deliberate role alongside government.
All of this is occurring under tightening fiscal constraints.
Government debt at both state and federal levels is at historic highs, limiting future spending and increasing the importance of engagement, prioritisation, and policy design.
The Federal Budget that was delivered in May saw government seeking to rein in spending, meaning a more sophisticated deployment of philanthropic will only become more crucial.
This article was written as part of the development of Tanck's 2026 whitepaper together with Perpetual Wealth.
Tanck offers advisory services in government engagement, advocacy, stakeholder strategy, and communications.
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