Not-for-Profits are formed not just to bear witness to what individuals are experiencing in the presence of injustice or the denial of rights. They also play a big role in developing healthy, thriving communities by creating programs and services for the people in need. And as the voice of the people they serve, strong and purpose-driven NFPs today continue to put problems into the light and make those with power aware of what’s going on in the communities all over the globe.
In the Not-for-Profit Governance Forum 2022, organised by the Governance Institute of Australia, the trends of civic disconnection and challenges that are attacking Australian charitable advocacy are explored. Professionals from renowned Not-for-Profit organisations have seated to discuss also the opportunities and approaches charities have to build their care workforce and provide better service to their communities.
I. The Growing Need and Limited Resources
Since 2019, the number of severely food-insecure people worldwide has escalated from 135 million to 345 million. Millions of families desperately need food and water, individuals fighting starvation every day — mainly due to conflicts in many countries. According to the World Food Programme (WFP), a total of 50 million people in 45 countries are teetering on the edge of famine, and 2022 is the year of unprecedented hunger.
Working Towards Effective Service Delivery and Continued Resilience
Anthony Albanese, Prime Minister of Australia, acknowledged the problem, “Globally, we know the world’s poorest nations face serious food security challenges, especially in Africa, the Middle East, and the Pacific. This is a looming crisis.” — putting forward the question: What does the government do about it?
CEO of the Australian Council for International Development Marc Purcell shared that his organisation is currently focusing on the Australian Aid program, revealing it’s the priority tool for public service. Unfortunately, most of its funding comes from the public without enough support from the Australian government.
Recognising the problems, Purcell emphasised that it is indispensable to (1) work effectively in a public campaign of advocacy, (2) get organised and use the electoral cycle, (3) build new alliances with those who can help the cause, and (4) frame arguments based on drivers that motivate others to act.
II. Responding to Risks in a Sustainable and Compliant Way
Sue Woodward, Justice Connect’s Chief Advisor for the Not-for-Profit Law programme, shared that the Governance Institute of Australia recognises that Not-for-Profits face a distinct set of governance issues. Pointing out these matters, Woodward explained that many organisations have wasted time and energy over things that are not worth defending.
Instead, providing support on the ground in times of crises, like natural disasters and pandemics, needs more focus. Woodward also pointed out that the workforce is a major issue in the NFPs, which is a sector driven by people for people. She highlighted three issues NFPs should take into account:
“First, advocacy is no longer a dirty word. I think we need to see the implementation of that. Second, is that there are regulatory barriers, and these are barriers that don’t need money to fix them. And lastly, how we support volunteers. Most charities rely on them, if not completely, in some way and to a large extent, is core to the connectedness of our communities.”
In support of these points, CEO of Community Council for Australia David Crosbie expressed that the issue is not knowing what needs to happen in the charity sector. The problem is doing it. But prior to making decisions that can lead change to in the sector, Crosbie reminded organisations,
“We also need to acknowledge that over 50% of our funding comes from governments and the environment in which we operate. The regulatory environment, financial environment is determined by government. So we do need to be able to influence government spending and influence change within governments.”
Why Risk Management in the Boardroom is Important
NFPs and charities need profit to survive, but then there is the sustainability talk. So, how do the boards balance the running of the business with the provision of a benevolent service?
David Swain, CEO of Endeavour Foundation, gave a straight answer, “Many organisations that are getting far away from their purpose because they start to be defined by the funding—and pursuing the funding in the pursuit of sustainability. So for me, I think it starts very much with the purpose — what is the driving purpose of the organisation — and understand that deeply.”
Swain encourages directors to look at their current board meetings and check if their compliance with regulations, regulatory reporting, and finances are all on track. He also noted the importance of looking internally at how NFPs can provide the best services and what their boards should look at. Swain suggests organisations ask these questions themselves:
- What do we see in our current board meeting?
- Are we accredited and meeting the necessary regulations?
- Are we delivering on the organisation’s purpose?
- Do we have confidence in the executive?
- Do we trust the systems in place to ensure sustainable delivery of quality care?
Furthermore, most charities or NFPs, regardless of their size, do not have an army of risk managers or a large risk team. Darryn Hammond, General Manager of Risk & Assurance at Churches of Christ in Queensland, claimed that the idea of the three lines of defense model may be workable, unlike what others think.
Hammond stressed that instead of focusing on how to apply the model strictly, it is best to work out what’s the right fit and application for the organisation. Then, use it to talk around and break up roles and responsibilities.
“Clarity of accountabilities is absolutely key. Not necessarily a strict application of the model, but really understanding whose role it is and where the risk management and whose accountability.”
While it’s the responsibility of the CEO to educate the board, it’s up to the board of directors to understand, learn, and inquire about business risks. Truthfully, human service is not a risk-free environment. Mercy Connect’s CEO Trent Dean stressed on this matter, “There will always be risks in the Human Services, and it can lead to some very poor outcomes. Have functioning systems but don’t be afraid to take chances to improve the outcomes that people that we serve.”
How Cybersecurity Threatens Sustainability
Not-for-Profits and charities should put cybersecurity and technology risk at the epicentre of their governance implementation. Failing to implement good governance on cybersecurity can make an organisation less sustainable and less resilient, which ultimately, also impacts the stability of their communities.
Similar to for-profit companies, NFPs and charities also carry out business-like operations and transactions involving sensitive data. Some of the potential cyber attack vectors that NFPs should be aware of include ransom and malware attacks, forced downtime, volunteer access, unsecured donations, and social engineering attacks.
John Halliday, Information Technology Governance Consultant from PKF, gave some advice on how the sector can manage these risks, “In terms of cyber risk, use risk quantification to measure extreme risks and focus on them. That’s where you focus your effort rather than trying to do everything in every risk factor.”
And as cyber threats are associated with greater use of technology, Convene—a board portal used by Not-for-Profits in Australia— has helped Not-for-Profits overcome cyber security threats. With its technology, Convene upholds strict data security standards—keeping key data and systems of Not-for-Profits secure.
Facing security risks requires a combination of good governance and the right technology. But on top of that, improving cyber governance also requires collaboration. Keep in mind that NFPs also play a critical role in creating a resilient future cyber ecosystem.
III. Changing Workforce and Philanthropy
What does the future hold for the whole organisation and its workforce? A big question that many NFPs and charities still have no answer to. Many have no idea how they can deliver services to people and provide engagement to their members in the future.
How Changing Workforce and Philanthropy Trends Drive the NFP sector
The workforce, or the Great Resignation, has been labelled as the biggest challenge impacting the NFPs’ sustainability and capacity. Under this, there’s a wage gap and a fight for talent, and the ability to retain and motivate a skilled charity workforce.
Melina Morrison, Chief Executive Officer of Business Council of Cooperatives & Mutuals explained that ensuring competitiveness around wages is important, particularly for people deciding where they are going to work and live. Another challenge is the fight for talent, which is not new to the volunteer workforce. The catch is, that it is not only about attracting skilled people but also the capacity to manage and motivate them.
Though offering decent wages and vocational satisfaction is an entry point, Not-for-Profits must provide more opportunities to employees and volunteers as the organisation grows. One perfect example is having roles that are flexible—that allow volunteers to be with and care for their families while they work for the organisation.
Morrison also cited that purpose and authenticity can attract a skilled workforce for the sector, “How we live our values through work — that’s an attractor because we’re authentic organisations. We don’t just talk about purpose. We are purpose-driven. That’s the whole point of being a Not-for-Profit. It is really about amplifying and educating people about the authenticity of the purpose.”
In terms of philanthropy, foundations and corporates have been introducing new policies to support organisations that are majority led and controlled by indigenous Australians. Financial and advocacy support is also growing for initiatives like the Uluru Statement from the Heart. These are progressive modern philanthropy at its best.
Helen Clark, Business Development & Partnerships Executive of Convene, shared, “The nature of modern giving goes beyond money to pro bono offerings of skill, or expertise, of legal age and other forms of support.”
In addition, CEO of Tanarra Philanthropic Advisory Lisa Kingman adds, “There are some new kids on the philanthropic radar in the form of intermediaries, like the Social Impact Hub or the X Factor Collective. They’re aiming to strengthen the sector on a scale and to build the capacity of people — the sectors people. They’re new, they’re savvy, they encourage knowledge sharing, they reduce duplication and potentially they lessen the demand for traditional philanthropy.”
Kingman also put into light that philanthropy, in Australia and other parts of the world, can and is starting to play a bigger role in addressing and confronting systematic racism, sexism, and inclusivity. Regardless if you’re a philanthropist or a charity, embracing a diversity of view, age, voice, experience, and background can only lead to better decision-making and strategy.
The Future: Creating Social and Political Change Together
Not-for-Profits, the private sector, and governments working together to address key social and political issues is not surprising. Focussing on closing policy gaps and flaws, particularly in offering similar opportunities for everyone—from attending to basic human needs like shelter and medical care to implementing inclusiveness within their workforce—is important.
As Tony Brearley, CEO of the Australian Society for Association, stated, “We need to continue talking about collaborative practices and work on them continually, not just for our employees but the people we serve.”
Convene: Helping You Achieve that Collaborative Care Workforce
Convene, a proud sponsor for Not-for-Profit Governance Forum 2022, is a digital board portal solution that empowers Not-for-Profit boards in making well-informed decisions via powerful features and an intuitive platform that can be used even by those with cognitive and manual disabilities. And the best part? We keep our pricing NFP-friendly. Learn why Convene is a fantastic investment for your organisation.
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