As grant makers seek to maximise the impact of their funding, two distinct approaches have emerged over the years: thematic and place-based funding.  

Thematic funding revolves around identifying and prioritising specific issues or themes that align with the grant maker’s mission and strategic goals, such as education, healthcare, environmental sustainability, and so on.   

In contrast, place-based funding centres on supporting initiatives that are tailored to the needs of specific geographic regions or communities. Grantmakers following this approach seek to foster development and positive change by understanding and investing in the unique context and assets of a particular location. 

Each approach has its merits and unique considerations, and they are not mutually exclusive. Read on for inspiration about when each approach may be the choice for your organisation and how they may align with your vision.  

Thematic Funding: Targeting Specific Issues and Objectives 

As mentioned, thematic funding makes sense when the funder’s mission centres on a specific issue. This approach can help raise awareness of and trigger funding for international issues, and it facilitates cross-border collaboration. Some more advantages are discussed below.  

Advantages of Thematic Funding 

The benefits of thematic funding include the following:  

• Building networks: Specialising in specific themes allows funders to develop in-depth expertise and build networks with organisations and other stakeholders working in the same field, promoting collaboration and knowledge sharing.  

• Precise measurement: Focusing on specific themes allows funders to define clear objectives, making it easier to assess the effectiveness of projects in a data-driven manner.  
• Leveraging resources effectively: Directing resources towards a well-defined area of interest prevents funders from scattering resources across numerous projects, increasing the potential for creating significant impact within the chosen area. 
• Advancing policy: Thematic funding enables grants professionals to align their efforts with broader policy objectives. As such, funders can support projects that contribute to policy changes and influence decision-makers, creating a more conducive environment for positive change at a systemic level. 
• Scalability: Strategically funding various projects within the same thematic area helps funders to amplify their influence and address challenges at a broader scale. 
• Innovation: Specialising in specific themes encourages funders to stay updated with the latest developments and emerging trends within the field in-question.  

Challenges of Thematic Funding 

Some challenges with thematic funding are as follows: 

• Overlooking local context: In some cases, thematic funding may overlook the unique needs and challenges of specific geographic areas, potentially neglecting opportunities for community-driven solutions.  
• Potential overemphasis on quantifiable metrics: Thematic funding may prioritise projects that can easily demonstrate measurable outcomes, leading to an overemphasis on quantitative metrics. While such measurements are essential, some crucial but less tangible outcomes may be undervalued. 
• Difficulty in addressing interconnected issues: Many real-world challenges are multifaceted and interconnected, transcending the boundaries of individual thematic areas.  
• Missed opportunities for collaboration: Thematic funding may inadvertently discourage collaboration between projects operating in different thematic areas. Siloed approaches may therefore lead to missed opportunities for sharing ideas and innovative solutions that emerge from interdisciplinary cooperation.

Place-Based Funding: Nurturing Local Solutions and Communities 

Historically, many place based grants were allocated by governments, but small grants are also common in assisting grassroots and community based projects to reach their objectives.  

Placed-based funding may focus on rural settings with very small populations and limited facilities, as well as significantly larger urban areas such as impoverished boroughs within a city.  

Place-Based Funding to Address Poverty 

Place-based funding often focuses on poverty due to the geographical discrepancies therein. For example, 23% of the population of Wales lives in relative income poverty with clear geographical disparities, and the situation has been this way for many years.  

Place-Based Funding Approaches  

With place-based funding, there are community-led approaches where communities are self-determined and drive change on the ground, as well as government-led initiatives that operate in a top-down manner.  

Place-based grants may focus on one particular issue (almost like thematic funding but on a local scale), or they may focus on a range of issues, seeking to create integrated systems that support change in the target location. For example, they may aim to improve the social determinants of health in the area in question – a complex web of factors including education, equality, and so on.   

Other Common Place-Based Initiatives 

Aside from broader programmes that seek to alleviate poverty, place-based funding often focuses on the following areas: 

• Community development: Initiatives that focus on enhancing the overall well-being and livelihoods of residents in a specific community. This can include projects related to infrastructure development, healthcare, education, community safety and social services. 
• Economic revitalisation: Initiatives that aim to stimulate economic growth, create job opportunities, and attract investments to revitalise local economies. 

• Environmental conservation: Programmes that promote sustainable environmental practices, protect natural resources, and address environmental challenges within the area. 
• Affordable housing: Providing funding to address housing needs and improve housing affordability for residents, especially in areas facing housing shortages or high housing costs. 
• Youth and education: Supporting educational initiatives, youth development programs, and scholarships to enhance educational outcomes and opportunities for young people in the community. 
• Health and wellness: Investing in healthcare facilities, health programs, and other initiatives designed to improve the overall health and well-being of residents. 
• Arts and culture: Projects that celebrate and preserve local arts, culture, and heritage, promoting community identity.  

• Infrastructure development: Funding for infrastructure projects, such as roads, transportation systems, and utilities, to improve connectivity and access within the area. 
• Social inclusion and equity: Initiatives that aim to reduce disparities and promote social inclusion, ensuring that all residents have equal access to opportunities and resources. 
• Entrepreneurship and small business support: Funding programs that encourage entrepreneurship, innovation, and the growth of small businesses within the community. 
• Tourism and cultural heritage: Supporting projects that promote tourism and capitalise on the unique cultural heritage and attractions of the area to drive economic growth. 
• Disaster recovery and resilience: Providing funding to aid in disaster recovery efforts and enhance the community’s resilience to future challenges and emergencies. 

• Neighbourhood regeneration: Improving neighbourhoods that are facing social, economic, or environmental challenges, aiming to improve the overall quality of life for residents and create a better living environment. Such programmes may incorporate elements of those listed above, including crime prevention and improving community facilities. 

Advantages of Place-Based Funding 

Some key benefits of this approach include: 

• Community empowerment: Local communities may be involved in the decision-making process, allowing for solutions that align with their values and aspirations. 
• Holistic approach: This type of funding accounts for the interplay of various factors within a specific area, leading to more comprehensive and sustainable solutions. 
• Long-term impact: Place-based funding creates systematic changes that may outlive the grant period, providing sustained benefits to the communities involved, as well as providing resilience.  

• Tailored solutions: Since every community has its distinct characteristics, problems, and opportunities, a one-size-fits-all approach may not be effective. Place-based funding enables funders to customise interventions that precisely match the requirements of each community, resulting in more effective and relevant outcomes. 
• Strengthening local networks: Investing in place-based funding initiatives often leads to the strengthening of local networks and partnerships. As different organizations and stakeholders collaborate to address local issues, they build stronger connections that can extend beyond the duration of the funding period. 
• Demonstrating tangible results: Place-based funding often yields visible and tangible results within communities. As projects take shape and improvements become evident, residents, stakeholders, and donors can witness the positive changes brought about. This evidence of impact can inspire further support and funding for future initiatives. 

Improved Health and Wellbeing Outcomes 

An umbrella review that reviewed 13 systematic reviews found that place-based funding has proven to be effective in improving physical health, health behaviours, and the social determinants of health when directed towards physical regeneration i.e., of housing, transport and public spaces. The regeneration of public spaces also showed to improve levels of physical activity. Other studies have shown that such grants correlate with improved well-being and satisfaction with living in the area.   

Place Based Funding Can Lead to Societal Change 

There are many case studies in which place based funding can have a ripple effect, creating an impact far beyond the initial geographical area. For example, several initiatives designed to safeguard the Peruvian Amazon and its indigenous communities caused the Peruvian Government to change their policies. What started as a collection of small, locally targeted grants lead to lobbying, larger-scale funding, and the demarcation of five million hectares of rainforest.   

Challenges of Place-Based Funding 

A few general challenges one may find when it comes to place based funding include: 

• Scalability and replicability: As place-based funding is tailored to specific locations, replicating successful interventions across different regions may be challenging due to the unique nature of each community.  
• Resource allocation: Funders must strike a balance between providing substantial support to targeted areas and ensuring that other deserving projects and communities receive adequate funding.  
• Collaboration: Coordinating multiple place-based projects and collaborating with various stakeholders can be complex, with different organisations having different priorities, approaches, and timelines. This makes it essential for funders to foster collaboration and build strong partnerships. 

Variable Benefits Depending on Location 

The umbrella review mentioned above also showed that place based funding focused on physical regeneration may not benefit all residents equally, with those living closer to the intervention benefiting the most.  

Targeting Issues 

Even if a given area is established as deprived, interventions may not impact all residents that need help. Not everyone within a certain borough may be struggling, while those in neighbouring boroughs may be in a worse position.  

As such, place based funding is not always the most accurate choice in terms of maximising impact for those that need it the most. Some argue that it’s more important to focus on individual needs, regardless of location.  

Conclusion  

Thematic and place-based funding offer distinct advantages and challenges, but the approaches are not mutually exclusive. Many funders adopt integrated strategies that combine the two – as always, the key is doing what aligns with their strategic goals, while being flexible enough to address opportunities and issues that arise in the communities they aim to support.  

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