“We Actually Trust the Community:” Examining the Dynamics of a Nonprofit Funding Relationship in New Zealand

Funding relationships in nonprofit management are increasingly defined by a philosophy of rational management, characterized by measurement of outputs and benchmarking, which represents an audit culture system (Burnley, Matthews, & McKenzie, 2005). There is concern that these approaches are constantly undermining the mission of community service nonprofit organizations (Darcy, 2002). In this research, we analyzed the management of funding relationships by examining dynamics within a nonprofit funding relationship in New Zealand. Through focus groups we explored the relationship between 17 representatives from nonprofit organizations and four Board members of a funding Trust. The management of this funding relationship was characterized by an appreciation of the diverse nature of nonprofit organizations, a balance between trust and control, and communication. We suggest that elements of these dynamics could be incorporated into nonprofit funding relationships in order to challenge an over-reliance on audit culture systems, and to re-establish relationships characterized by interaction between nonprofit organizations and their funders. Finally, we call for future research in this area.