Challenges facing the not-for-profit sector: Where do we go from here?
With COVID-19 and other challenges, these past 18 months have been highly disruptive. While vast changes are unsettling, they present opportunities to re-evaluate the effectiveness of the not-for-profit sector.
There has been a lot of commentary on the potential impacts of Covid-19 on health, businesses and the economy, but what does all this mean for Australian charities and the millions of people who rely on these services? In 2021-2022, innovation will be key to charities surviving and thriving. The real impact of the recent disasters and now COVID-19 may likely mean more charities facing non-existence and now is the time to collaborate and partner to support each other.
The Case Study
BDO in Queensland is a trusted adviser to clients looking for audit, tax and advisory services. BDO in Brisbane has a strong commitment to supporting the local community, celebrating the arts and engaging across the industry to help drive growth and innovation.
BDO in Brisbane, in partnership with Project Management Institute Queensland and Mindhive, have utilised the Mindhive platform to capture and provide insights into the annual Project Management Day of Service (PMDoS). In its sixth year, PMDoS aims to help entity leaders with their project management opportunities and challenges. This is a free one-day problem-solving event where charities and not-for-profit organisations are matched with project management professionals and world-leading advisory consultants from BDO in Brisbane. Throughout the day, participants will have the opportunity to discuss and analyse potential challenges facing not-for-profit entities while working with advisers to address and overcome these issues.
Mindhive is a Brisbane innovation recently recognised as World's Boldest Crowdsourced Online Platform by Global Crowdsourcing Awards, Venice, Italy. Mindhive is the world's first collective IQ and ideation platform enabling you to engage and understand your audience at scale and real-time. It works by connecting a community's many minds and provides tools for rapid insight and innovation.
BDO sponsored this research to understand the type of problems that charities are experiencing daily use those insights to review how BDO can assist. BDO utilised the Mindhive platform for the following key reasons:
Opportunity to build on industry knowledge
An innovative approach to understand client problems
It gives the industry a platform to voice issues
It could be used as another channel to attract participants
Opportunity to engage other industry partners - HR, recruiter, legal firms etc.
BDO is seeking to engage clients in a new and exciting way by using its platform to facilitate the discussion and ideation process. BDO's interest in collecting the data was to understand client problems better and share within the internal BDO team, present back to the not-for-profit community, and undertake root cause analysis - fast-tracking issue resolution. BDO sought best practice success stories and ideas – internal and external, industry-leading solutions, research and case studies to be raised and shared.
Q1: Challenges in the not-for-profit sector
What are the top three concerns currently facing the industry, and how do you see this changing over 12+ months?
Q2: Unsettling times prompt re-evaluation in achieving success in the not-for-profit sector
What is the one strategy NFPs should consider to set themselves up for success this year, and what impact does this have on ensuring long-term business sustainability?
Q3: Covid's Impact: More charities facing non-existence
How has the changing COVID landscape impacted the way NFP's operate within the community, and what do you think consultants can do to more effectively support NFPs during this time?
Q4: Professional membership organisations: Are they still relevant?
Professional associations have long been successful in delivering significant benefits to their members and stakeholders and, in many cases, substantially contributing to their cause — but many working with associations are asking if this can continue given the challenges associations face today? Today, all organisations are being reshaped by influential socio-economic trends, and those who cannot adapt to these trends may not survive. Do you think that professional membership organisations are still relevant? What do you think they provide their members? Data - engagement
How We Fit In?
The human capability to develop solutions to ideas is untapped. We believe in putting our challenges to the crowd to solve the seemingly unsolvable. We also seek to enable individuals to collaborate to develop even richer solutions.
Australia is a nation of not-for-profits, social enterprises and charities. It's a dynamic and exciting sector that allows people with an entrepreneurial spirit to pursue their dreams.
The Challenge turned meaningful conversations into action. In a nutshell - we better define the problem, stimulate engagement and actively seek solutions. In October-November, national leaders tackled and framed the Challenge of growing the charity, NFP and social enterprise sector.
This Challenge was about finding a new way to answer this question. We were looking for solutions in new places. We asked the not-for-profit community to go beyond single-dimensional solutions to enable themselves and other innovators to collaborate to develop richer, multi-dimensional solutions.
BDO and Mindhive believe collaborative intelligence has the potential to solve the significant challenges of our time. By bringing together many minds in the sector, we are more likely to name and solve the challenges we face together.
Finally, the Challenge provided awards for the Challenge's top contributor, top insight, most liked the comment, and most engaged. The prize includes Mindhive Premium, Mindhive merchandise pack, and a $200 visa card. Mindhive will announce the awards on the 10th of November.
Download the Final Report BDO x PMDoS PMIQ Mindhive above
Summary insights
Q1: Challenges in the not-for-profit sector: What are the top three concerns currently facing the industry, and how do you see this changing over 12+ months?
Most liked comment: "NFPs should collaborate in an unprecedented way. The urgency of modelling collective, not individual, responses to crisis and recovery. Vital to address multiple community problems in parallel, as solutions are likely to be interdependent, e.g. affordable housing, insecure work, declining regions. Job losses, access to health services etc. NFPs to be judged on empowering their users, not just delivering services. People-led change is at the heart of sustainability." Narelle Kennedy, Managing Director, The Kennedy Company P/L
Review current trading and cash flow position
Funding agreements
Review recent trading and cash flow position.
Funding agreements
Employees and volunteers
The urgency to collaborate: How do you get NFP's to collaborate meaningfully?
Staffing churn increasing / Part-time staff / Volunteer shortages
Change fatigue and Communal stress
Covid policy impacts
Greater compliance and the expectations that NFP's will all be able to navigate the digital world
The sector is made up of vastly different sizes of organisations.
Rise of social enterprises /corporates doing good and other entities coming into the sector space.
Length and certainty of contracts - funding streams uncertain
Governance legislation re advocacy to attack environment and a hostile Commissioner
Resourcing of a cohesive peak
Yeah, Nah: Is greater compliance killing your NFP?
Number of Yeah: 25 (60%)
Number of Nah: 17 (40%)
Yeah, Nah: Is resourcing keeping you up at night?
Number of Yeah: 30 (71%)
Number of Nah: 12 (29%)
Yeah, Nah: Do NFPs collaborate meaningfully?
Number of Yeah: 18 (44%)
Number of Nah: 23 (56%)
Q2: Unsettling times prompt re-evaluation in achieving success in the not-for-profit sector
“What is the one strategy NFPs should consider setting themselves up for success this year, and what impact does this have on ensuring long-term business sustainability?
Most liked comment: "There's a whole spectrum of ways of collaborating, and I think trying to encourage NFPs to think a bit laterally about how they could collaborate to get benefits of scale and benefits of efficiency without giving up the sort of identity and things that might be individual organisation effective. I think there's a lot to do in that space, and coming from a legal background, I'm also struck by the fact that, on the one hand, there's more complexity in the not-for-profit space than there is in the commercial structuring space. But that complexity also provides solutions, which often people overlook. There's a lot of ways of structuring around what are perceived to be obstacles In collaboration. Most importantly, not-for-profits exist for a purpose and making sure that purpose is served as efficiently as possible with the demand for resources and the competition for resources is a norm." Ken Gray, Mediator, Director, Governance Adviser, Charities & Not for Profit Law
A shared platform
Adopt an NFP
Openness and preparedness to innovate and collaborate
More possibility of integrating techno-adaptions and hybridity into practices
Evolve with the opportunities of the digital world
Platform/ecosystem to solve issues and unite around a common cause
Living with instability
A shared service organisation for the not-for-profit sector
A universal income
Digital professional development and learning community
Good governance
Yeah, Nah: Is a shared services organisation for the NFP sector a solution?
Number of Yeah: 36 (88%)
Number of Nah: 5 (12%)
Yeah, Nah: For-profits are being encouraged to adopt an NFP. A good idea?
Number of Yeah: 32 (82%)
Number of Nah: 7 (18%)
Q3: Covid's Impact: More charities facing non-existence
How has the changing COVID landscape impacted the way NFP's operate within the community, and what do you think consultants can do to more effectively support NFPs during this time?
Most liked comment "My view is that everyone and every organisation is examining what has permanently changed, what is morphing into something that incorporates some of the old and some of the new and what does not change. Such exploration allows for micro and macro adjustments in what, who, how and why for receivers of products and services, be they customers, beneficiaries, recipients, companies, or individuals. Consultants will play an important part in assisting NFP's (and for-profit) organisations in reviewing, adapting, refreshing, updating, changing, challenging, altering strategies, execution capabilities and means of delivery. To offer a service to an NFP to do a strategic review with the executive and board would be a special service." Lindley Edwards, CEO AFG Venture and Board Director.
There was agreement that the current not-for-profit outlook is extraordinarily challenging. In the course of the discussion, contributors considered the various issues whereby consultants could play an important part:
A shared platform to track Income and spending ought to be a priority.
The solutions will be different for small / medium / large organisations - success is further across the ecosystem of NFPs.
Amalgamation and can leave you with big market players and not much else.
The ACNC should continue to prioritise its education and research functions, including using behavioural insights and incentives.
The Challenge is recorded service delivery to the entrepreneurial world.
The urgency of modelling collective, not individual, responses to crisis and recovery.
Donors demand particular ways of reporting, and there are different standards.
NFPs are continually developing new strategies to be more efficient in delivering services to their clients, and this should continue.
Healthy collaboration is usually place-based and includes a diversity of organisations in those communities.
More possibility of integrating techno-adaptions and hybridity into practices
technology, capacity building, and collaboration can help organisations move beyond meeting 'compliance' obligations to collect data about the client and social 'outcomes' - to inform and improve services.
Every organisation examines what has permanently changed, what is morphing into something that incorporates some of the old and some of the new and what does not change.
Future issues facing the sector that were raised and discussed at the Zoom tanks and followed by online discussion:
Macro understanding, promotion and measurement of how the "intangibles" our sector delivers increases social capital and makes for robust communities across Australia
Promotion of alternatives to GDP measures and new economic models that value community and sustainability
Evidence-based policy and funding - facts as drivers of policy
A reinterpretation of who economics should serve and the models it uses
Collaboration between our sector and others - how?
Diversity in our sector - how can it happen?
Conscious/non-ego based leadership - how do we move towards this to maximise joined-up efforts to drive change
Q4: Professional membership organisations: Are they still relevant?
Do you think that professional membership organisations are still relevant? What do you think they provide their members?
"Are traditional models of professional associations fading away through lack of relevance to membership bases, or are they becoming very different entities? From my perspective, professional associations, particularly in the education sector, have always been incredibly worthwhile organisations. The value is highest for those who become involved in associations through Boards and committees. The networking, professional learning, thought leadership and governance experience had been the basis for many a career I have watched develop across the education sector. The value diminishes for those who join purely for access to information, resources and professional learning opportunities. Professional associations that have thrived, as Lindley pointed out, are those that have evolved with the opportunities of the digital world and created a sense of community regardless of location. The impact of COVID will test the survival instincts of many organisations, given that face to face conferences remain the highest Income earning source in association budgets. I wonder whether there is a seismic shift in progress? Are traditional models of professional associations fading away through lack of relevance to membership bases or are they becoming very different entities?" by Deb Kember
Talking about a certain issue is one thing but getting people that really matters to talk about it while engaging with key business leaders and policy decision-makers is even better. Mindhive facilitates the discussion and ideation processes by getting the right people involved so that the resolution of any issue or problem is moved forward until viable, long-lasting solutions are made.
About BDO
BDO is a trusted adviser to clients looking for audit, tax and advisory services. We are guided by our values that are the foundation for what we deliver — IDEAS | PEOPLE | TRUST.
This is about delivering ideas and advice that create value; through quality-driven people who are motivated by providing exceptional client service and being trusted to get the job done. BDO aims to develop long-lasting relationships. Whether you’re an individual, small family-owned business, a large complex corporation, or a government department, the principles we apply are the same. We seek to understand your needs, provide exceptional client service and deliver results beyond your expectations. BDO has a range of service lines and specialisations to ensure our clients are provided with the right people who can draw upon their extensive knowledge in their area of expertise.
For more information, visit their website at https://www.bdo.com.au
