COMMON FUNDING AGREEMENT FACT SHEET FOR NFPs As of January 2013, all Victorian Government departments started using the whole of Victorian Government Common Funding Agreement for new funding agreements with not-for-profit organisations for community services and projects.
What is the Common Funding Agreement? The Common Funding Agreement provides a standard funding agreement structure and content for use with the NFP community sector. It has:
An editable Schedule that is used with locked down, standard Terms and Conditions An editable Short Form for lower risk funding A Clause Bank of additional terms and conditions for use with the Schedule or Short Form.
Why has the Common Funding Agreement been introduced? Victoria’s NFP sector is made up of around 120,000 organisations. The Victorian Government provides approximately $2.2 billion in funding each year to the sector for a wide range of services and projects that benefit Victorians. This funding has been managed using many different agreements. The NFP sector has told the Government that this has led to increased administrative burden and that funding arrangements need to be simplified. Led by DHS’s Office for the Community Sector in close collaboration with all departments and NFPs, the Common Funding Agreement establishes one standard funding agreement to address the sector’s needs.
To what and who does the Common Funding Agreement apply? Government Departments need to use the Common Funding Agreement for community services or project grants of any amount directly administered through a program or other funding initiative, be they allocated through a contested or negotiated process or provide on a once-off or recurrent basis. Statutory authorities or agencies can opt in to using the Common Funding Agreement.
NFP community organisations Departments must use the Common Funding Agreement with NFP community organisations. Many types of organisations fall within this scope, such as:
Community arts organisations, community clubs, community service and health providers, co-operatives, drug and alcohol services, industry organisations, kindergartens and preschools, neighbourhood houses and community centres, peak bodies, self help groups, social enterprises, sport and recreation clubs, tourism groups, Victorian Aboriginal community organisations, and volunteer groups. NB. Additional work is underway to transition Victorian Aboriginal community organisations and their relevant funding providers to enable transition from the Victorian Indigenous Funding Agreement (VIFA) that they currently use.
Some NFP organisations are out of scope, such as:
Religious congregations, schools (government and non-government), universities, TAFE colleges, research institutes, hospitals, medical centres, trade unions, professional associations, or Local Government.
State Services Authority (SSA) definition of a NFP Organisation: Organisations that operate for social or community purposes, do not distribute profits to members, are selfgoverning and independent of government. Organisations with a legal status as an Incorporated Association, Co-operative, or Company Limited by Guarantee may fall into this definition.
‘Better Grants by Design’ definition of a Grant: “Money given to organisations or individuals for a specified purpose directed at achieving goals and objectives consistent with government policy…for community or business projects, and for service delivery… “Grants do not cover donations, sponsorships, noncontested transfer of funds…, commercial contracts or procurement.”
What does it mean for your organisation? Departments officially started using the Common Funding Agreement in January 2013. You will notice over time that your funding paperwork will be streamlined, be more predictable and consistent over time with the same structure, order and flow of information used in funding agreements issued by departments. You won’t need to retrofit existing agreements as the Common Funding Agreement does not need to apply:
Retrospectively to existing funding agreements signed before 1 January 2013 To variations to funding agreements initially entered into before 1 January 2013 To funding agreements that were negotiated by 1 January 2013 and are waiting to be signed.
If your organisation receives services-related funding from the Department of Human Services (DHS), Department of Health (DH) or the early childhood area of the Department of Education and Early Childhood Development (DEECD), your funding will continue to be managed under the Service Agreement you currently have in place which has been aligned with the Common Funding Agreement. Existing funding management processes and systems will continue to be used with your organisation.
What can you do now?
Visit the DHS website at for further information, guidance and tools Refer to the Service Agreement Information Kit and other business guidelines in relation to DHS, DH and DEECD Service Agreements Speak to the contact in the department you receive funding from Contact the Office for the Community Sector at [email protected]
or on 9096 1183.
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