Australian NFPs – Under Pressure!
Wednesday, 24th October 2012 at 1:36 pm
Australia’s Not for Profits are dogged by pessimism and a lack of confidence in meeting demands and are losing the war on attracting ‘talented’ people to their ranks, according to major new research.
Some 80% of Australia’s Not for Profit organisations do not feel confident they will be able to meet demand for their services in the next six months, according to a new report released by PwC and the Centre for Social Impact (CSI).
The PwC-CSI Community Index is a biannual measurement of confidence in the Australian Not for Profit sector, across 10 industries like Housing and Development, Health and Social Services.
The inaugural report shows Not for Profits are somewhat pessimistic, with an overall score of minus-5. The research assesses confidence over four components to determine an aggregate confidence score. The four components are demand, people, funding and relationships.
Releasing the report, PwC Corporate Responsibility Partner Mark Reading said: “The sector employs more than eight per cent of the workforce – more than the resources sector – and adds more than $55 billion to the economy.”
“Looking ahead, the sector is generally pessimistic in its outlook over the next six months. The main contributing factors to this negative outlook are expectations of greater demand for services and uncertainties about being able to meet this demand, and finding and retaining quality employees,” Reading said.
According to the report, expectations for high levels of demand and low confidence in ability to meet that demand are the major causes of low confidence for Australian Not for Profits, with the sector having a Demand Index score of -13.
The report says worryingly, the Social Services and Development and Housing industries are significantly concerned at their ability to meet demand for their services, with Demand Index scores of -37 and -36 respectively.
“These results demonstrate that in difficult economic conditions more Australians require support for accommodation and social service support,” Reading said.
People issues are the second most influential driver of low confidence across the sector, returning a People Index score of -8. Australian Not for Profit organisations are losing the war for talent due to constraints in offering attractive wages and career paths.
Religious organisations have the lowest level of confidence within the sector with a People Index score of -22, followed closely by the Health industry with a People Index score of -18. Both industries are experiencing difficulties in attracting and retaining employees with the expectation that this challenge will increase over the next six months.
“The PwC-CSI Community Index shows that many of our largest Not for Profit essential service providers are most concerned at being able to meet escalating demand for their services. These organisations shoulder the lion’s share of service provision and are struggling to keep up,” Reading said.
Large Not for Profit organisations are the least confident in the sector, with an overall confidence score 0f -11. This is driven by a strong negative outlook from these organisations in terms of demand (-24) and people (-15).
“In a country as wealthy as Australia, it is deeply troubling that demand for services from the Not for Profit sector continues to outstrip our ability to provide them,” World Vision Australia chief executive Tim Costello said.
“But despite the pessimism, overall I think the Not for Profit sector remains resilient; it is a sector of Australia’s economy that continues to provide exceptional value for money to the community,” Costello said.
"The Community Index Report is a great initiative that highlights the work and the challenges facing Not for Profit organisations. It is a sector that provides exceptional value for money to the community; this report highlights that contribution."
Centre for Social Impact chief executive Officer Dr Andrew Young said: “Given the sector’s size and significance in Australia, it’s important that Not for Profit leaders and policy makers have access to regular and robust information about sector confidence and operating conditions. The PwC-CSI Community Index provides an important national outlook filling a significant gap in available data.”
“Two critical things that the Not for Profit sector needs to deliver impact are great people in leadership and management, and effective collaboration with other organisations and sectors. On those two points respectively, this study has some bad news and some good news.
“The PwC-CSI Community Index shows that the sector is confident about its relationships with others in the sector and with business and government; however, even in these difficult financial times, the most significant barrier to success is attracting and sustaining people,” Dr Young said.
“Unless we can better address the talent issue, we will likely see a further decline in confidence.”