The Governance Institute of Australia recently moderated and produced a live web-forum that brought together many people of interest in the Not-for-profit sector. It afforded the opportunity to deep-dive into topical discussions around key areas of interest and allowed us the chance to lend our ears to the experts.  

The following is our summary of the full-day forum: 

Regulator’s Update: Australian Charities and Not-for-profit Commission

The ACNC takes an important role to monitor Australian charities. There has been a substantial increase of ACNC web traffic and the number of public searches on the charity register during the past years. The ACNC has identified some new services and initiatives on the ACNC website so that charities are more reachable and more transparent to the public. These include:

Charity marketplace: 
Provisioned a searching platform that allows the public to search charities based on their functions, programs, target beneficiaries and location. It aims to help charities link with targeted service users and potential donors.

Promotion of innovative organisation: 
Provision of a designated section on the ACNC website that promotes charities that use innovative methods to bring social good. The public would be able to reach out to those organisations for services or collaboration. The webpage will be launched in 2022.   

Data integrity on the ACNC register:   
A review of data integrity about the information on the charity register. Some common errors include incorrect selection of charity function, out-of-date list of responsible persons, incorrect business contact etc. This review aims at maintaining precise and accurate information. A data integrity report will be published by early 2022.

Annual financial report disclosure: 
While charities have provided a simplified breakdown of their revenue source in the Annual Information Statement, the ACNC would like charities to provide more details on the origin of revenues, for instance, specify the departments offering grants to the organisation. This data would only be visible by the ACNC only.

E-learning platform: 
Provision of online learning modules for Responsible Persons. Topics such as charity registration, the ACNC Governance Standards, responsibilities of Responsible Person etc. Participates will be granted a certificate when they complete each module.

Panel Discussion: What does good policy look like?

The speakers reflected how public policy could be more fit-for-purpose when charities and policymakers have a higher level of engagement during policymaking.

Charities should have a more active role during policy consultation. Due to insufficient consultation with charities in the service sectors, it is not uncommon that public policy has resulted in some undetected consequences, such as additional costs during implementation, complex funding/service application, unable to direct funding to frontline services/ service providers, etc.

Charities play an important role in connecting service recipients with policymakers. Working on the frontline amongst their service sectors, charities can offer valuable insight to policymakers regarding the operating environment, the needs of service-seekers and service recipients, and community expectations on the role of the government and charities. Policymakers should consider the insights from the charities and feed them in their policy drafting.

Charities should not dismiss their role and influence in advocacy. To create a stronger voice, charities (similar cause/ service/ region) could collaborate and create a united voice so that policymakers cannot ignore their viewpoint.

Panel Discussion: Fireside Chat in technology, sector innovation and social justice

The panellists highlighted that digital inclusion remains a key social issue, especially seen in the not-for-profit sector. The issues extend far beyond simply owning a mobile phone, but the social and economic participation levels. Post covid-19 times have shown that the level of access, efficiency, affordability, capacity and participation are disparate against the digital transformation pieces in organisations.

Those more heavily affected by the digital inclusion piece, those of low income, regional and rural living, seniors, first nations, are all key participants and appreciators of charities, but it is important to keep in mind their levels of access, literacy and participation. A balance is required when utilising digital technology to enhance service offerings and information delivery, but also keeping at the forefront such limitations.

In many not-for-profit spaces, there is a clear line between what can and cannot be delivered through online means. However, it is important to make the distinction between not fully replacing offerings to that of face-to-face work, but including options to widen the divide. However, in order to be able to enhance, it requires growth and innovation to bring everyone up to speed to then be able to meet the challenges faced.

Technology should be fit for purpose and service the strategy, not drive it. No matter where the organisation sits, start from where it is and then build up from there. The worst thing to do is to jump too high too quickly.

It is evident to be driven by the needs of the community and not solely by what technology is going to be around in the future, as some pieces might just not work. Far more valuable to scale what is appropriate and available to the organisation than to hunt down the ‘latest and greatest’. Some see a disadvantage in smaller charities, however they are far more nimble to change and can work quickly in implementations, whereas larger organisations may need much heavier approvals and uplifts to match its scale.

“Utilise systems that serve you and not systems you serve.”

A key area for further development is in digital and data security against cyber threats. The 3 tips to start:

1. Ask your IT service provider to enable multi factor authentications;
2. Invest in cybersecurity awareness training; and
3. Include a standing agenda item at Board Meetings to have an ongoing strategy to prevent, prepare and fix.

The investment into digital transformation is a journey, and many were not in that position at the beginning of the pandemic to afford this. Budgets and funding can be an issue, but that is an issue for Boards to address, and hopefully the need for technology resources is apparent post pandemic times.

Presentation: Strategic financial reporting to demonstrate that you are adding value

The presenter noted that a good health question that every organisation should ask ‘how are you meeting your service goals and organisational purpose?’ A clear understanding of an organisation’s value and their story can drive strategic reporting to external stakeholders and the community it serves. Often it is this question of ‘value’ that might get missed, but it is so crucial in the not-for-profit space when profits and loses are not as evidently important. Managing this, along with the inputs and outputs is a key piece in impact reporting for organisations to then be able to market outcomes.

Questions like the following can help flesh out this value piece:

• Why are we here/purpose?
• What makes us successful?
• What are our key inputs and outputs?
• What are key outcomes do we need to control?
• How did we do/what’s our story?

Knowing your value and story can help further the substantiality of an organisation and how you might sustain yourself and showcase see your ‘need’ to the community.

Once you develop the answers of the above, then it is easier to look at the data (finances, statistics, etc) obtained and proceed to arrange it and visualise it and tell the story of the organisation. Charities can be more impactful looking away from balance sheets and focus on framing within strategy and the pieces of the story to share. To engage members and external communities, personalising delivery personalise, and data can really strive home the purpose an organisation. There is no value in telling them ‘what’, but instead, tell them ‘why?’ and ignite action, not apathy.

Panel discussion: Investing for impact

The panellists provided an insightful conversation around the innovative business models for social enterprises.

It is evident that community organisations are being challenged to return to core purpose. These organisations are highly dependent on government funding, fundraising and philanthropy, and with covid-19, it has amplified the need for community and charity assistance. The challenge of returning to purpose is about going back to basics and working out ‘what is important?’ This will enable community organisations to be responsive to immediate needs.

Community organisations should revisit purpose and take leadership of the difference they can make and work out how to bring capital together to deliver that purpose. Some organisations have capital that is being underutilised, so how can this capital be mobilised in a co-operative way?

The technical ‘know how’ can be transferred or borrowed from the business world; community organisations need to pursue their purpose and work highly collaboratively with each other. There needs to be a ‘beyond service’ agenda aka, how can the organisation make a difference to the community? 

The gap between the value the charity provides, and the value donors/contributors want to make, needs to be closed. This value gap can be closed and addressed by:

• reshaping the role of Aboriginal and Torres Strait Islander people in leadership is also important;
• empowering young people and tapping into passionate (but inexperienced) change makers. Pro-innovation ecosystems and having the courage to try something out. Some getting stuck on the question ‘will it work?’ stifles innovation – instead ask ‘do we want it to work?’ ; and
• communities knowing what communities need. Systems need to be overhauled too e.g. justice system. That means breaking long-standing rules and people fear this, but it can lead to very different and outstanding results.

In delivering impact, it is important to highlight the operation, governance and service delivery of an organisation. This can be seen by:

• being clear about the impacts the charity/community organisation is trying to achieve;
• really understand what the business model supporting the charity/community organisation is;
• understanding the organisation’s value, revenue and costs – but this not always easy to define for a charity/community organisation;
• importing business models from the commercial world into the charity sector may not always translate easily;
• knowing where will the organisation get its working capital from. If the organisation is not digitally set up and savvy, then the organisation will have little impact; and
• knowing how to generate working capital to support long term investments and sustainability.

It is important to understand different generations and how millennials are influencing business interest in impact investment. Some of which are by:

• challenging the status quo and new business models needing to be discovered; this cannot be done without empowering young people;
• being open to new ideas and innovation – young people, migrants, etc are groups that can add loads of value;
• knowing that you don’t need to be good at innovation but just as important to be good at working with innovation; and
• even for big for-profit companies like Google are not creating anything new in recent times, but acquiring innovations and working with them.

Presentation: Navigating crisis – hindsight is 20/20

The presenter provided an analysis and insight into McKinsey’s “Five R Model”: Resolve, Resilience, Return, Reimagine, Reform in the not-for-profit sector and how it can help manage times of crisis: hello covid-19.

Case Study Charity: Mother’s Day Classic

Resolve and Resilience:  addressing the immediate challenges to workforce, customers, technology and stakeholders.

• Pivoted in 2x days and delivered a new virtual concept to the fundraiser with a new team.
• Event couldn’t be cancelled, so they had to go back to the core values, and this shaped the new concept.
• Scenario planning is important – understanding the decision gateways and looking at impacts on stakeholders (look at who needs to receive communications, etc).
• Had to take decisive action even though there were high levels of uncertainty. Decisiveness was essential and decisions just had to be made.
• Lots of communication against a stakeholder plan. Asked for help e.g. from partners, media, corporate partners.
• Embraced the uncertainty and was empowered by it. It allowed innovation and creativity to flourish and for people to try things and fail. Of course, it was very unusual circumstances, but it worked.
• Accountability – clarity on who is responsible for what. The reminder of excellence over perfection. Still challenged through respectful and robust discussions nonetheless.
• Always need to have some fun along the way.

Return:  creating a plan to return to some form of normality.

Reimagine and Reform:  addressing new challenges now and ensuring the long-term sustainability and everything continues to be measured. Requires detailed financial analysis and stakeholder engagement and modelling the risks and scenarios.

• There is always time to pause and plan.
• Stay true to core values.
• Identify superpowers and leverage off those (e.g. strong community relationships).
• Learn to be comfortable in the uncomfortable.
• Communicate, communicate, communicate with all stakeholders.

Takeaways to remember:

• As a CEO, you may not have all the answers, but important to keep communication open promise to help them through it. You need to understand people are still going through it and that people are exhausted – we all need ongoing support. Teams support each other and without it, organisations cannot achieve goals.
• What does ‘business as usual’ mean now? Everyone talks about the new normal, but what is that? Does anyone want to go back there anyway given everything that has been learned from COVID-19? Businesses should be growing and continuing to allow staff to put forward different ideas.
• What makes a good employee assistance program? Having external support, making sure staff know about it, making it acceptable for staff to access it, encouraging staff to access it, having it be a normalised and constant conversation in the workplace.