Strong Charities Don’t Happen by Accident

This article accompanies my interview with Lisa Cotton for The Giving Habit podcast. It isn’t intended to summarise the discussion. Instead, it explores one of the questions that stayed with me afterwards: why do we still struggle to invest in the organisations that we depend upon to solve society’s most difficult problems? If the ideas in this article resonate, I’d encourage you to watch the full conversation which you can find here. Lisa brings a rare combination of experience across business, philanthropy and governance. It is well worth your time and attention.

Operational overheads

There is an old assumption that has shaped philanthropy for decades, so familiar that we rarely stop to question it. Many of us instinctively believe that the best charities are those that direct almost every donated dollar to the people they serve. Money spent on salaries, technology, strategy, leadership or administration is often viewed as waste rather than impact. It is as if there is a moral hierarchy at work.

It is an attractive idea because it feels intuitive. We all want our giving to make a tangible difference. We like to imagine a child receiving an education, a family finding shelter or a community gaining access to clean water. These are outcomes we can picture, and because we can picture them, we naturally place greater value on them. Many NGOs use tangible, item-based giving because it helps donors visualise their impact.

The difficulty is that those outcomes rarely happen in isolation. They are produced by organisations. Organisations with leaders, staff, systems, governance, technology, financial controls and cultures. None of those things is particularly glamorous, yet they determine whether good intentions become lasting impact or simply another well-meaning project that struggles to survive beyond its initial burst of enthusiasm.

It strikes me that we would never apply this logic anywhere else. We do not ask universities to neglect their libraries in order to spend more on teaching. We do not encourage hospitals to postpone investment in equipment because every available dollar should go directly to patient care. Businesses routinely invest in leadership, infrastructure and capability because they understand that sustainable performance depends upon the strength of the institution itself. Somehow, when we enter the social sector, that reasoning often disappears.

Partnership not patronage

One of the most interesting aspects of my conversation with Lisa Cotton, chair of Kennards Hire Foundation and CEO of Ideology Group, was her insistence that philanthropy should be understood as partnership rather than patronage. A patron provides resources and expects results. A partner begins by asking different questions. What is preventing this organisation from becoming more effective? What capabilities are missing? Where are the bottlenecks? What would allow this team to create greater impact over the next five or ten years? The answers are not always what a donor expects to hear.

Sometimes they involve funding a new finance system because the existing one consumes countless hours that could be spent serving communities. Sometimes they involve leadership coaching for an executive who has spent years responding to immediate crises but has never had the opportunity to think strategically about the future. Sometimes they involve strengthening governance, investing in communications or helping an organisation build the evidence needed to demonstrate that its approach genuinely works.

The thrill of the new

These investments can appear mundane when compared with funding a new programme or opening another service. Yet they are often the very things that determine whether an organisation remains small and fragile or grows into an institution capable of changing thousands of lives.

This becomes even more important when we remember the nature of the problems many charities are trying to address. Educational disadvantage, homelessness, addiction, family violence or intergenerational poverty are not engineering problems with tidy technical solutions. They are human problems, deeply connected to history, relationships, culture and economics. Progress is rarely linear. Organisations need the freedom to learn, adapt and occasionally admit that an approach which seemed promising has not produced the outcomes they hoped for. That requires a different kind of relationship between funder and charity.

Integrity, honesty, trust

Trust is an overused word, but perhaps it deserves to be rescued. Trust allows honesty. It creates the space for difficult conversations about what is working and what is not. Without trust, charities and donors understandably become cautious. Every report begins to sound like a success story. Every programme appears to be exceeding expectations. The temptation is to present confidence rather than curiosity because confidence feels more fundable. Meanwhile, on the other side of the equation, funding focus narrows.

Yet anyone who has spent time working in complex systems knows that certainty is often an illusion. The strongest organisations I have encountered, donors and grant recipients, are usually the quickest to acknowledge what they are still learning. They collect evidence not simply to prove they were right, but to understand how they might become better. That mindset requires humility from both sides of the funding relationship.

Skills based contribution

The conversation with Lisa also challenged the way I think about the contribution businesses can make. Corporate philanthropy is often discussed in terms of financial donations, but money is only one asset that successful organisations possess. They also have experienced leaders, operational expertise, networks, supply chains, marketing capability and thousands of employees whose knowledge has been built over decades. When those capabilities are shared thoughtfully, they can be transformative. The work Lisa does with Kennards Hire Foundation is a great example.

The Kennards Hire Foundation formalises a long tradition of community giving by investing in disadvantaged young people and environmental conservation across Australia and New Zealand. Rather than simply writing cheques, it builds long-term partnerships with charities by combining financial support with equipment, leadership development, capacity building and practical operational assistance. Employee engagement is central to the model. Team members volunteer their time, mentor charity partners, provide pro bono expertise, donate equipment, support local community initiatives through the company’s branch network, and help shape community giving at a local level. By embedding philanthropy into everyday work and aligning it with the company’s “One Family” culture, the Foundation makes social impact a shared responsibility rather than the preserve of a corporate giving team, and society as a whole is stronger for it.

One of the recurring themes throughout The Giving Habit has been the importance of approaching communities with humility. It is easy for those of us who have spent our careers in business to assume that commercial experience automatically translates into social impact. Sometimes it does. Often it does not. The people working closest to complex social issues usually possess insights that cannot be learned from annual reports or board papers. Their expertise comes from lived relationships, accumulated experience and years spent understanding the realities of the communities they serve.

The most effective partnerships, like the ones Kennards Hire Foundation invests in, recognise that expertise exists on both sides. The business brings organisational capability. The charity brings contextual understanding. Neither partner arrives with all the answers, and they are stronger together.

Telling the right story

Another idea from the discussion has stayed with me. Lisa observed that many charities inadvertently reinforce the very narrative that limits them. They proudly announce how little they spend on administration, believing that this demonstrates integrity and efficiency. For years, the sector has been encouraged to tell this story because it appeals to donors. Yet I wonder whether it has become a trap of our own making.

Imagine if we celebrated different things instead. Imagine a charity explaining that it had invested in better leadership because that would enable it to serve communities more effectively over the next decade. Imagine a funder taking pride in helping an organisation build stronger systems rather than simply financing another twelve months of activity. The conversation would become less about minimising cost and more about maximising long-term value.

That shift in language might seem small, but language shapes expectations. If we repeatedly describe organisational capability as overhead, we should not be surprised when people conclude that it is somehow separate from impact. In reality, the two are inseparable.

Looks can be deceiving

There is a broader lesson here that extends beyond philanthropy. We often become captivated by visible acts of generosity while paying less attention to the institutions that quietly sustain healthy societies. Schools, charities, community organisations and social enterprises all depend upon capable leadership and patient investment. They do not become resilient by accident. They become resilient because someone was prepared to think beyond the next grant cycle and invest in foundations rather than appearances.

Perhaps that is one of the defining characteristics of mature philanthropy. It looks beyond immediate activity and asks what conditions are necessary for lasting change. It recognises that organisations, like people, need time to develop. They need encouragement, honest feedback and occasionally the freedom to fail without losing the confidence of those who support them.

None of this diminishes the importance of generosity. If anything, it asks more of it. Giving money is valuable. Giving confidence, patience and trust may prove even more so.

As I reflected on my conversation with Lisa, I found myself returning to a simple question. If we genuinely believe an organisation has the potential to change lives, why would we hesitate to help it become stronger? It seems an obvious question when phrased like that. Yet it challenges one of philanthropy’s oldest habits. Perhaps the future of giving lies not simply in funding more programmes, but in having the confidence to build more capable institutions. The communities we hope to serve deserve nothing less.

To find out more about Kennards Hire Foundation, click here.

To watch or listen to the full interview, click here or find us wherever you get your podcasting kicks. And if you enjoy the interview with Lisa Cotton, check out the other episodes and maybe share with a friend who you think might be interested.

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This post was previously published on Stephen Keys’ blog.

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