Competitive NFP landscape drives organisational change

July 18, 2019

The third Pitcher Partners and Russell Kennedy Lawyers Not-for-profit Benchmark Survey results are released today, highlighting that organisations are increasingly responsive to the change that has characterised their sector for many years.

Access the full NFP Benchmark Survey Report 2018-19 here

For the 2018-19 survey, more than 150 NFP organisations from a range of industries – including aged care, disability, research, education, health and social support – shared their experience of governance and compliance, fundraising and financial performance, staffing and resources, and data and technology.

The survey questions probed a range of key areas for NFPs, including governance, strategy, fundraising, risk management and the use of volunteer and professional resources. The responses received, and the trends and themes which they collectively reveal, will help NFP organisations and charities to benchmark themselves against their peers across a range of governance and operational metrics.

Overall, organisations are actively implementing change with positive results in the areas of strategy, governance and technology. In contrast, the ongoing high turnover of staff continues to present a challenge for the sector, with very few organisations finding an affordable solution to attract and maintain highly skilled, experienced and committed staff.

Major sector insights

Strategy

Many NFPs are focussing on three key strategy solutions to address sector challenges: service delivery, achieving growth, and implementing technology.

Increasing Federal Government compliance requirements have impacted almost 48% of organisations, creating additional demands of reporting to funders, donors and partners, who believe this is always important (51%) or usually important (20%). In contrast, over 60% of organisations find that compliance with external regulatory requirements only sometimes – or never – adds real value to their offering; suggesting that compliance reporting takes up valuable time that organisations feel could be directed to more important tasks.

5 strategy questions for your NFP

  1. Is the organisation’s strategy driven by its mission?
  2. Is the strategy focus on the client and what can be executed effectively, rather than on growth?
  3. Is strategy execution supported by the appropriate investment in the organisation?
  4. Is strategy realisation actively tracked or measured?
  5. Is strategy contributing to the development of a self-sustaining organisation?

Governance

More than two-thirds of organisations surveyed acknowledge that compliance requirements have increased in the last 12 months, with specialist governance committees emerging within Boards.

More than 68% of NFP organisations that participated in the Pitcher Partners and Russell Kennedy Not-for-profit Sector Survey acknowledged their organisation was undergoing significant change, driven by challenges in funding, staff retention, service delivery and growth, with more than half of all organisations surveyed (58%) believing that changing their business model was the most critical factor to addressing the above challenges.

5 governance questions for your NFP

  1. Is board oversight of management effective, with awareness of current and emerging issues and
  2. challenging management assessment and decisions?
  3. Are accountabilities clear and enforced?
  4. Are issues, incidents and risks identified and escalated with urgency for resolution?
  5. Is the risk management framework operational, or does it work better on paper than in practice?
  6. Is the risk management framework supported by a mature and sufficiently resourced compliance team?

People and culture

The continued high turnover of staff, as well as the cost of upskilling, recruiting and remunerating skilled staff, present a challenge for the NFP sector.

Upskilling current staff or recruiting new staff comes at a financial cost. Almost 67% of NFPs find “remuneration at a level that fits funding” to be their major staffing challenge. It is known that workers in the NFP sector are not necessarily driven by money, but seek deeper satisfaction from their work. However, 40% of organisations find it difficult to attract new staff and 36% find it challenging to keep them.

5 people and culture questions for your NFP

  1. Are the board and executive united on the culture of the organisation?
  2. Does the board have a means to monitor the organisation’s culture and ensure it is as expected?
  3. Are management transparent with all staff as to reasons and impacts of organisational changes?
  4. Are all staff being supported and trained to work effectively in a changing organisation?
  5. Are well-regarded staff being protected, fostered and developed for retention and culture?

Technology

Technology is being embraced by the sector to improve client care and protect data, withCustomer Relationship Management systems (CRMs) being implemented, and firewalls and encryption used to enhance security.

NFPs are increasingly feeling challenged to achieve growth (41%), improve staffing (41%), improve service delivery, and meet new policy requirements (29%). In the face of increased expectations and compliance requirements, it is not surprising that they have turned to technology to help manage their processes and procedures. Forty-four per cent of NFPs report increasing their investment in technologies, with 72% specifically using new technology to address new challenges.

5 technology questions for your NFP

  1. Is technology creating a more mobile or agile workforce responding to the needs of your community?
  2. Is technology providing clarity and new insights to operational drivers or performance?
  3. How are you utilising the significant amount of data captured by your technology?
  4. Has technology removed the manipulation of data outside systems?
  5. Is technology being leveraged to create and engage with your community?

NFP Benchmark Survey Report

To discover the complete insights revealed in the survey, access the full NFP Benchmark Survey Report 2018-19 here.


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