The third sector challenges, achievements and future trends

The diversity of responses received by Third Sector reflected the specific achievements that not-for-profits (NFPs) made within their particular industry or community areas. As Marilyn Forde, a previous not-for-profit CFO and current sector advisor notes, “the NFP area is so diverse that any generalisations will unwittingly misrepresent parts of the third sector.”

However, many organisations also responded that through continuously working with other NFPs in the sector they came to realise the prevalence of issues across the board.

The participating NFPs talk about some of the more common challenges that they faced, and how – in many instances – these challenges were turned into opportunities.

Global financial crisis

“Overall, I believe the threat of the GFC [global financial crisis] fallout had an impact on spending in the third sector, from an organisational-spend perspective, sponsorship/partnership perspective and from individual contributions from members/volunteers.”

Swimming Victoria

“Like many other NFPs, we have continued to deal with our volatile investment portfolio, and our shares faced a further downward turn. We also faced challenges in raising funds from industry partners still bearing the brunt of the GFC. Whilst we saw a significant reduction in sponsorship funds from some long-term partners we turned this into an opportunity to broaden our sponsorship base and brought in new sponsors.”

Optometrists Association Australia (Victorian Division)

“With the fallout from the GFC, the increase in service need and a significant decrease in income seems to be common-place. With all the challenges 2010 presented, organisations still managed to deliver new and existing programs, assisting record numbers of people – what an amazing achievement.”

Kids Under Cover

“Quite simply, the sector had to do more with less (even more than usual). As a result we are seeing innovative fundraising strategies, better use of viral and online marketing and other low cost strategies.”Australian Scholarships Foundation

Funding

“With so many very worthy causes, it is a challenge to secure funding to sustain, let alone extend our programs. I think we all suffer from ‘we could do so much more with more funds.’ So the challenge is to be visible, credible, trusted and transparent. Our ongoing funding relies on people believing in what we do and trusting that it’s real.”

Greenfleet

“NBCF had prepared for tough times in 2009–10. The CEO was asked to undertake the challenging decision of a cost-reduction program, which ultimately included making seven staff positions redundant. This difficult process helped to bring our total fundraising and operating costs back in line with our target of 35 cents per dollar raised.”

National Breast Cancer Foundation

Membership

“Membership numbers dropped for NAWIC during the GFC and the Council needed some new energy. An almost all new dynamic and passionate Council developed a strategic approach to membership engagement, including creating initiatives such as awards, industry forums, mentoring and partnerships – resulting in a 20 per cent increase since June!”

National Association of Women in Construction (NAWIC)

Staff retention

“2010 has again demonstrated the challenge for the third sector to attract and retain professional staff at reasonable pay rates. Pressure to increase pay across the board will unfortunately see a reduction in services available by NFPs, as they struggle to reconcile pay rises with money spent on programs and services.

Third sector workers need to receive more financial recognition for the tireless and courageous work that they do on a daily basis. Unfortunately, funders often want to see more achieved for less money – it is a conundrum that the sector will continue to face.”

Service to Youth Council

Transparency

“Program evaluation is by far our greatest achievement. To know anecdotally your programs work is one thing, but to demonstrate value in a dollar return on investment (or a percentage) is a powerful tool for selling your service. On one hand we are expected to operate through long, drawn-out funding negotiations, and yet it is necessary for us to operate under a strong business model.”

Kids Under Cover

Trends
E-communications

“Technology is coming! Social networking will change the way we do business. If the police can deliver an Intervention Order on Facebook, imagine what you can deliver to potential donors and volunteers via these mediums.”

Kids Under Cover

“Our future, and that of the sector, is held in sustainability. There is a lack of understanding by board members that technology and 21st century communications need to be adopted by their organisations. It’s time for every CEO to ask his/her board ‘Why is technology vital to business but somehow not believed to be just as imperative to our organisation?'”

Connecting Up Australia

Working together

“There will be greater collaboration between organisations across the sector. Perhaps through adversity comes the recognition of strength through collective action. As a collective group, our voice is much stronger than as individual groups, and the opportunity to work together should be sought at every juncture.”

Swimming Victoria

“There is a need for greater collaboration with like-minded organisations to complement and expand their offerings and international links to create global responses to social needs.”

National Breast Cancer Foundation

Governance

“I see really positive changes to embrace good governance and business principles, whilst maintaining a commitment to the important values of the organisation.”
Optometrists Association Australia (Victorian Division)

“Improved governance arrangements for NFPs and support to develop organisational performance will also become a future priority, ensuring that the sector adds even greater value to the Australian community and economy.”

Service to Youth Council

“As funding becomes more competitive and broadened for the sector there will be increasing pressure for NFP organisations to demonstrate impact.”
Australian Scholarships Foundation

“The recent Productivity Commission report on the Australian NFP sector, and the current Government’s commitment to implement its key recommendations, raise serious questions for charities and NFPs about their ability to deliver outputs and successes.”

Connecting up Australia

Growth

“Continued growth and recognition that the sector can innovate and deliver more quickly than government agencies. Attraction to the sector of more ‘corporate-refugees’, disillusioned with for-profit values and attracted by HR policies offering more flexibility if not more remuneration.”

National HITnet Development Program

Social enterprise

“I see [the sector] growing as more individuals are inspired to undertake social enterprise in response to growing needs and generally declining government services. There is an emerging pool of educated Gen Y’ers who have the capacity and desire to make a difference and do not want to give their lives in pursuit of profit for someone else. They are ambitious, hard working and will introduce a new level of professional capacity into NFPs.”

Creativity Australia

Labor Government

“Hopefully the new Labor Government will take on board and enact the recommendations made by the Productivity Commission. These include: smarter regulation of the current complex regulatory framework, with particular attention to reducing the significant financial burden of regulatory compliance; improving effective sector development by enabling diversification of philanthropic and other revenue sources; and, stimulating social innovation.”

Young People In Nursing Homes National Alliance

“The development of the Sector Reform Council needs to ensure that Government leads the way to more productive and user-friendly funding opportunities, and not be seen to just make noise with no positive action. The sector has a long history of few and slow changes. Hopefully this Government’s term will be the beginning of the required paradigm shifts across the sector, including government and corporate involvement.”

Connecting Up Australia