What keeps community leaders awake at night?

A new report provides a roadmap for the sector’s big issues

Is your organisation worried about government relations, funding, demographic changes, workforces, or the difficulties faced by clients? If so, you are in line with many community organisations across Australia.

A new study of not-for-profit governance has analysed the most pressing issues for the country’s 600,000 not for profits based on a survey of nearly 1,900 sector leaders.

Rethink What You Know About Not-for-profit Governance, released on Wednesday, asked board members and senior staff to identify trends or challenges faced by their organisation in the previous year.

Concerns about government featured more prominently than any other – closely followed by funding – with issues centered on policy volatility, a lack of government support or too much red tape, NDIS reforms, changes in sector funding, lack of engagement and policy and regulation not matching needs.

Susan Pascoe AM, the inaugural commissioner for the Australian Charities and Not-for-profits Commission and now chair of the Institute of Community Directors Australia’s (ICDA) Community Directors Council, was among the “Brains Trust” who provided expert commentary for the report.

She told Pro Bono News she was not surprised that funding emerged as a key issue, but said the issues around government were very interesting and pointed to the changes in government and policy changes.

“We like to think we’re a dynamic sector, but we can go from dynamic to unstable,” Pascoe said.

“For example, if you think of an area like aged care or disability or mental health, there are royal commissions in all of these areas which are likely to lead to significant changes. While these inquiries are underway there is always a level of instability until there is a clear set of recommendations and then a government response, so you can see why that emerged as it as. 

“I think it’s very interesting and it speaks to some of the challenges in the not-for-profit sector that perhaps other sectors don’t have.”

Headline findings

Alongside the issues that keep community leaders awake at night, the study tackles diversity, performance, induction, capacity and skills, the chair’s role, impact, data, digital tools, fraud and cybercrime, finances, and relations with government and peak bodies.

Among the headline findings were that the sector could be described as “female, pale and stale(ish)”, in contrast to the corporate sector, where boards are often said to be “male, pale, and stale”.

The majority of chairs in the survey were women, consistent with the dominance of women in the sector generally – however men were overrepresented when compared with their numbers in the sample overall.

Almost one in three not-for-profit boards did not have any system in place for reviewing its own performance, a trend Pascoe described as “pretty disturbing”.

Almost all respondents believed their board needed training, with fundraising and governance identified as the top two training needs.

The survey also found that the not-for-profit sector could be split more or less equally into two groups: financial battlers and thrivers.

A roadmap for action

Based on the findings, the ICDA, which oversaw the study, has created a “roadmap” for action in 2020 and beyond, an interactive data visualisation and a “cheat sheet” for sector leaders. 

The cheat sheet picks out five areas where not-for-profit organisations need to focus first and hardest; diversity, board and CEO review, induction, crime and fraud, and measuring progress.

The roadmap, which builds on six “Spotlight” reports published earlier this year, also makes further recommendations to not-for-profit boards wanting to boost their performance through training, technology, strategy, tools, reading, and other resources.

Lead author and Our Community executive director Kathy Richardson said the study had an unashamedly practical focus.

“The survey confirmed some of what we knew, but also uncovered some things we didn’t know about governance in the not-for-profit sector – knowledge that we can use to direct our quest to shift the dial towards better governance,” she said.

“This is a blueprint for action.”

Pascoe said ICDA would use the report to target sector deficits, committing to extra support where needed, such as through the Festival of Community Directors 2020 training and events program.

She encouraged others to take advantage of the interactive nature of the study, which allows individual charities to go and look more deeply.

“You can do a very quick read of the report and get a sense of the key themes, and then I think you could use it in a targeted way, depending on what your own needs where,” she said.

“I think that’s the real benefit of it.”

The full report can be found here.