Benchmarking Project Investigates NFP Back-Of-House Services
31 May 2012 at 10:48 am
A consortium of 13 Australian Not for Profits have embarked on a three year project to benchmark their back-of-house services within the sector.
The project, looking at organisations ranging in size from 80 to 800 staff, aims to deliver cost reductions and quality improvements in back-of-house services for Australia’s Not for Profit sector, according to lead Not for Profit in the project MacKillop Family Services.
The project focuses on human resources, information and communications technology, finance, fleet, payroll and the burden of compliance in four government service agreements.
‘The first year of this important initiative, lead by 13 Not for Profit organisations, has shown us the value in working collaboratively to improve our services. Benchmarking our back-of-house services has highlighted our strengths and where we can improve,” said Micaela Cronin, CEO of MacKillop Family Services.
Project Consultant, Marcus Harvey from the Nous Group says that the project has created initial back-of-house benchmarks for the sector to help all NFPs understand their own back-of-house services better.
"While a range of opportunities exist, such as the potential to reduce compliance costs, satisfaction with ICT services and understanding needs around service quality and measurement, what stands out is that many NFPs deliver so many services within constrained budgets," Harvey said.
In the analysis of the first twelve months of back-of-house activities, the review found that reporting activities accounted for 60 per cent of the benchmarked compliance burden (4.3 per cent of funding, $5.1m) for the Not for Profits.
The review found under the compliance banner, that re-keying of information into multiple project specific programs and government systems was a major burden for Not for Profits.
The review said insights it uncovered present NFP organisations and funders with an opportunity to reduce that burden of compliance and direct a greater proportion of funding towards direct service delivery.
Last year, benchmarked organisations invested an average of $9,949 per Full Time Employee (FTE) across the five benchmarked back-of-house functions, equating to 11.1 per cent of organisational expenditure.
It found that across Finance, HR, Fleet and ICT, no organisation delivered services that were rated both ‘high satisfaction’ and ‘low cost’.
The 13 participating organisations that have financially contributed and are committed to participating in the three year project are:
1. MacKillop Family Services (also the lead agency in the project)
2. Anglicare Victoria
3. Berry Street
4. The Brotherhood of St Laurence
5. Child and Family Services Ballarat
6. Connections UnitingCare
7. Hanover Welfare Services
8. Jesuit Social Services
9. Melbourne City Mission
10. Orana UnitingCare
11. Relationships Australia Victoria
12. St Luke’s
13. Windermere Child and Family Services
This project has been funded by:
- Helen Macpherson Smith Trust
- The Ian Potter Foundation
- The Jack Brockhoff Foundation
- The Myer Foundation
In addition, Nous Group’s Community Contribution Fund also supported this project.
Nous Group says the project also acknowledges the valuable support of: The Australian Centre for Philanthropy and Non-profit Studies (Queensland University of Technology), the Centre for Excellence in Child and Family Welfare, The Office for the Community Sector (Victorian Department of Planning and Community Development), and The Victorian Council of Social Service.
This study is a terrific example of the capacity of our sector to enter into collaborative enterprises that involve an appetite for risk and transparency. The agencies that took part should be congratulated and their ethic of contribution rewarded beyond the savings they can now shift back into client services.
These activities are not business as usual and require a high degree of trust. I hope that has been kept in the reporting of this brilliant example of working together.
I am the author of a Green Paper “Working Together” for the Futures Forum in Queensland. I took great hope from this study and highlighted it as an example of collaboration reducing administrative burden at an agency level.
It also informs the need to do the same at an Industry level. Well done to all the participants. Trevor Carlyon
Agree Trevor, no NFP is alone on this issue – under pressure to show a low admin cost yet insufficient funding to do the work, leaving less than optimal outcomes. Look forward to the results. I could write my own report on the subject! It is not that NFPs don’t care or are comfortable with inefficiency, I suspect that most CEOs and management teams are flat out delivering our key service or other evaluations etc. and the admin areas never make it to the top of the review list. So much else to be done, at the point end.