Adapting to the Changing Society as a Not-for-Profit

The scale of the not-for-profit (NFP) sector in Australia continues to grow. With the global crisis, there is a great opportunity to innovate, rethink, and venture out for the future of the sector. Last December 9, 2021, Convene sponsored a panel discussion about the investment of NFPs in innovation during these times. The session is part of the Governance Institute of Australia‘s (GIA) Not-for-Profit Governance Forum 2021.

The panel has discussed the innovative and mindful investment for NFPs and social enterprises to accelerate their growth, innovation, and well-being while bringing a positive impact to the community.

Understanding the Business Model of NFPs

The pandemic crises itself has been a challenge for the various industries, especially for NFPs and social enterprises. As organisations highly depend on government funds, contract funding, and fundraising, the NFP sector has been in a rough situation in responding to their advocacies because of the lack of proper resources. Furthermore, with the continuous growth of the sector, one challenge that arises is understanding the dynamic business model of NFPs. Sarah Davies, CEO of Allanah & Madeline Foundation, discussed the trinity foundation of the NFP business model namely, value, fuel, and cost. Value stands for service creation and exchange, fuel as the revenue and resources, and cost as the time, effort, and capital to supply the value and fuel.

She further added that while the commercial business model is a transaction or two-way model, the NFP business model is different “as we create value to communities, to people, and to issues that are not in the position to pay for the value.” Understanding the NFP business model means understanding their purpose and translating it through value creation. By designing the engine this way, NFPs can identify where and how to invest to continue providing value for their communities.

Driving and Fostering Innovation

Realising the framework that not-for-profits must follow, they are also called to rethink their processes and innovate to better fulfil their purposes and accelerate their growth. However, as Tom Dawkins, Co-Founder and CEO of StartSomeGood, put it: “It’s challenging to receive support for initiatives that may or may not work. Innovation is the things that are not yet proven to work.” While innovation has been evidently needed, the sector is having difficulty embracing innovation because most initiatives are not properly funded and are youth-led. Dawkins added, “Even though traditional ways have more experience, we should be open to fresh and new ideas. You don’t have to be good with innovation, you have to be good at working with innovation — building allies and acquiring skills.”

The not-for-profits demand innovation, especially during these uncertain times. The sector must think counter-intuitively to seek new ways to address the challenges. For instance, great and innovative ideas are often dismissed because they challenge the traditions and violate the status quo. To achieve maximum impact for NFPs, organisations must be willing to take risks to carry out their purposes with innovation. Dawkins shared Australian NFPs must have a pro-innovation ecosystem, “a space that fosters courage, enthusiasm, and risk-taking in trying new activities.”

As NFPs are committed to serving their purpose in bettering the community, they must be disposed to risk the conventional ways to sustain their initiatives and their growth for the future of the communities they are supporting.

Organisational Development for Greater Social Change

The digital age and the consequences of the pandemic have immensely challenged not-for-profit and community organisations to return to their purpose. Organisations have exhausted their attempts to respond to their advocacies during these times. Adopting innovation in the processes and business models of the sector can help in rethinking the way NFPs serve the community.

One of the pressing issues the Australian NFPs have been experiencing is redesigning the sector to empower Aboriginal children through community services. According to Belinda Drew, CEO of Social Enterprise Finance Australia, the fundamental problem is resistance to the indigenous people. “We need to up our game in community services. There should be a stronger movement towards investing in child protection. We need to redesign multiple systems and reframe values and laws that are outdated for our future.” The challenge now for NFPs is to go back to basics and look across the Australian communities they should be responding to.

Investing for impact suggests that community organisations must understand and evaluate their business models and see where to properly invest operationally and financially. This put a greater consideration on investing in opportunities for the growth and well-being of the organisation. NFPs are called to explore the areas to make more impact and invest in those — rethinking the organisational purpose and extending service to community groups and causes. “We are not post-COVID yet. There is a need to engage collectively to think on what opportunities can this pandemic offer in rethinking how community organisations operate within and beyond the service agenda,” Drew remarked.

Investing for impact implies allotting priority, capital, and effort in furthering the services of the not-for-profits in bringing impact to the community. Additionally, NFPs are called to invest more in propagating values to the community — effectively executing their purpose while still being aligned with their principles.

One of the critical steps to invest for impact is to invest in solutions that will help advance their initiatives. Convene is a not-for-profit meeting platform that drives innovation within the organisation and fosters a seamless and intuitive collaborative space for decision-makers. Convene helps NFPs to reallocate funds to operational expenses by saving costs for laborious meetings. Additionally, it helps reduce carbon footprint and creates a positive impact for the environment.