Category: Policy & Advocacy

University funding in Australia is largely a story of two missions. Research funding flows through the Australian Research Council and National Health and Medical Research Council, rewarding publication outputs, grant success, and increasingly, research impact. Teaching funding flows through the Commonwealth Grant Scheme, rewarding student enrolments and completions. Both of these streams have shaped Australian universities profoundly — and both have their problems. But the most significant gap in the system is what is missing entirely: dedicated, sustained funding for community engagement as a third mission in its own right.

How Funding Shapes Behaviour

Universities, like all organisations, respond to incentives. When research is funded through competitive grants that reward publication outputs, universities invest in research infrastructure, create academic career paths oriented around publications, and promote researchers who succeed in competitive grant rounds. When teaching is funded through student load, universities invest in student recruitment, retention, and completion. The pattern is predictable and entirely rational: institutions do more of what they are paid to do.

The implication is stark. If community engagement is not funded, universities will underinvest in it — not because they don’t value it, but because they cannot sustainably do it at scale without resources. The community engagement work that does happen typically does so through the discretionary effort of individual academics, sustained by goodwill rather than structural support. This is admirable but insufficient, and it means that community engagement capacity is fragile: it disappears when champions leave, when budgets are cut, or when competing demands crowd it out.

What a Community Engagement Funding Stream Could Look Like

There are several possible models for introducing community engagement into university funding. The simplest would be a performance-based allocation — a portion of base funding distributed to universities based on demonstrated community engagement activity, measured through a reporting framework aligned with agreed definitions and indicators. This approach is analogous to the performance-based research funding systems that operate in several countries, including through Australia’s own Engagement and Impact Assessment.

A more targeted approach would involve competitive grant funding specifically for community engagement — analogous to ARC Linkage grants but with a broader scope that includes non-research forms of engagement such as service learning, community cultural programs, and direct social services. Such a scheme would create a competitive market for community engagement innovation, rewarding institutions that develop novel and effective approaches to community partnership.

A third option is structural incentives embedded in the regulatory compact — making demonstrated community engagement a condition of access to mainstream university funding, rather than a bonus on top of it. This approach is more coercive but would ensure baseline performance across the sector rather than rewarding willing institutions while leaving others unaccountable.

Addressing the Measurement Challenge

Any funding model tied to community engagement performance requires measurement — and measurement of community engagement is genuinely challenging. Unlike publications, which are discrete, countable artefacts, community engagement is relational, contextual, and often invisible to external observers. A partnership that produces no publications, no patents, and no media coverage may nonetheless be generating extraordinary community value.

This challenge is surmountable, but it requires investment. Australia would need to develop a national framework for community engagement reporting — one built with input from universities and communities alike, focused on outcomes rather than just activities, and sensitive to the diversity of engagement forms across institution types. This is not a trivial undertaking, but it is a necessary one. The absence of measurement should not be an excuse for the absence of funding; rather, it is an argument for investing in developing better measurement tools.

The Return on Investment

What would Australia get for investing in university community engagement? The evidence from other countries and from the best Australian practice suggests the returns would be substantial. Greater uptake of university research into policy and practice. Stronger local economies, particularly in regional areas, through anchor institution strategies and workforce development. Better graduate outcomes, as students who engage with communities develop the interpersonal and civic competencies that employers and society value. More resilient communities, better connected to the expertise and resources that universities represent. And — perhaps most fundamentally — a university sector that is more clearly earning its social licence.

Public investment in higher education is an act of faith — a bet that educated people, skilled researchers, and engaged institutions will produce benefits that justify the cost. Community engagement funding is a way of making that bet more explicit, and more likely to pay off.

Every few years, Australia produces a new higher education review or strategy that shapes university funding, regulation, and direction for the following decade. These documents are important — they reflect national priorities, allocate public resources, and signal to universities what the government values. And for most of their history, they have said remarkably little about community engagement.

That omission is becoming increasingly difficult to justify. As universities face growing questions about their social licence — their legitimacy in the eyes of the public — and as Australia grapples with complex challenges that require the university sector’s full contribution, the case for embedding community engagement in national higher education policy has never been stronger.

The Social Licence Question

Public trust in universities has been tested in recent years by debates about research integrity, international student revenue, executive salaries, and questions about whether universities are delivering value for the billions of dollars of public investment they receive. In this environment, demonstrating genuine community benefit is not just a nice thing to do — it is an existential priority.

Community engagement is one of the most compelling ways universities can demonstrate their social value. When a university’s researchers are working alongside local communities to address real problems, when its students are contributing to community organisations, when its facilities are open to the public and its expertise is accessible to those who need it — these are visible, tangible demonstrations that public investment is generating public benefit.

What Higher Education Policy Currently Says

Current Australian higher education policy recognises two primary missions of universities: teaching and research. The language of “third mission” — the university’s role in contributing directly to society and economy beyond teaching and research — appears occasionally in policy documents but has never been given the structural recognition it deserves. There is no national framework for measuring community engagement, no funding stream that explicitly supports it, and no regulatory requirement to report on it.

This is in contrast to some comparable countries. The United Kingdom’s Research Excellence Framework explicitly includes community impact as a component of research assessment, with significant funding consequences. The United States has longstanding federal programs supporting community engagement in higher education. Several European countries have formal recognition mechanisms for engaged universities. Australia lags behind.

What a Community Engagement Policy Framework Should Include

A serious national policy framework for community engagement in higher education would need several components. First, a common definition and taxonomy — making clear what counts as community engagement and what doesn’t, so that institutions can report consistently and comparisons are meaningful. Second, a national data collection mechanism — enabling government and the sector to understand the scale and character of community engagement activity across Australian universities. Third, institutional reporting requirements — requiring universities to account publicly for their community engagement activities and outcomes as part of the regulatory compact they enter into as receivers of public funding.

Perhaps most importantly, it would need to address funding and incentives. Research is incentivised through competitive grants and performance-based funding. Teaching is incentivised through student load and completion metrics. Community engagement is largely not incentivised at all — which is why, despite abundant goodwill, it remains underdeveloped relative to its potential. A serious policy framework would create funding streams that support community engagement as a distinct institutional activity, and promotion and recognition mechanisms that make community engagement a viable career path for academic staff.

The Opportunity in the Next Policy Cycle

As Australia’s next higher education review approaches, there is an opportunity to make community engagement a central, not peripheral, theme. The case is straightforward: Australia faces major challenges — climate change adaptation, regional disadvantage, social cohesion, workforce transformation — that cannot be solved without the sustained, engaged contribution of its university sector. Unlocking that contribution requires policy settings that recognise, resource, and reward it.

The universities are ready. Many have made significant investments in community engagement infrastructure and are demonstrating impressive impact. What they need is a national policy framework that validates and amplifies that work — and holds all institutions, not just the willing ones, to account for their community contribution.