Three Ways Faith Based NFPs Can Sure Up Sustainability
Wednesday, 23rd August 2017 at 3:15 pm
While the latest census shows a downturn in the number of Christians in Australia, it’s a chance for faith-based not-for-profit organisations to recalibrate and sure up long-term sustainability, writes Community Sector Banking CEO Andrew Cairns.
Faith-based not-for-profit organisations have long held a special place in the hearts of Australians. But the latest Census revealed our nation is changing. For the first time in history, the number of people who say they have no religion has overtaken those who identify as Catholic, and the number of Christians has fallen to 52.1 per cent from 74 per cent in 1991.
This presents a very real challenge for faith-based not-for-profit organisations – how can they continue serving their missions and build financial resilience and capability for their future needs? Particularly given this shift is taking place at a time when economic change and tightening government and public purse strings are already stressing not-for-profit budgets.
The NAB Charitable Giving Index showed growth in national giving fell 0.3 per cent in the 12 months to August 2016, compared to a 5.1 per cent rise a year earlier.
Faith-based not for profits make an enormous contribution to our communities – a contribution that’s “arguably unrecognised”, according to the Australian Charities and Not-for-profits Commission (ACNC). They are active right across the nation – from big cities, to outback cattle stations, helping people find freedom from fear, poverty and addiction, and live life to the full. These organisations are at the heart of a healthy society; their long-term sustainability is vital.
The latest census is a warning flag but it’s also an opportunity. It’s a chance for faith-based not-for-profit organisations to pause, reflect and recalibrate. Here are three creative ways they can get on the path to long-term sustainability and maintain their faith and community missions.
- Build financial partnerships based on mutual trust
Not for profits can borrow from the world of business to reap the benefits of leverage. Corporates and investors have long used this approach – which is essentially finding ways to make your existing financial and human resources go further, while maintaining or improving quality.
One of the most common forms of leverage is debt financing – where you borrow money to multiply your investment activities and reap greater returns. In the not for profit context, an organisation with charitable aged care services could use debt financing to expand facilities and services for its clients.
However, there are many other creative ways NFPs can capitalise on leverage, such as raising funds through impact investment. The challenge for not-for-profit leaders is in thinking differently – putting on a business lens (as well as their stewardship lens which is critical for faith based organisations) to fully scope their organisation and all the opportunities for leveraging available.
- Re-imagine how property can help
We know that the value of bricks and mortar has skyrocketed in Australia. But what does this mean for sustainability-challenged not-for-profit organisations who are being asked to deliver more each day?
It’s time to re-evaluate how their property assets can help in today’s environment. Property prices have boomed alongside an explosion in technology. Commerce and new industries have sprung up online. Remote workplaces are set to become the norm, alongside remote education, and even not-for-profit services such as counselling. Not-for-profit leaders need to re-evaluate their wealth and need for their current property assets considering their future needs.
Key questions to ask include: How can we create new value from our property assets? How can we release value for better outcomes for now and the future? How can we leverage their worth to support our mission? Should we consider unlocking and repurposing the capital in these assets, through borrowing, renting to partners, or similar collaborations to help fund our mission? How do we protect our past while preparing and changing for the future? Who do we trust to help us do that?
- Energise new collaboration and relationships
Lastly, not-for-profit leaders can strengthen foundations for a financially sustainable future by re-focusing on new forms of collaboration.
We saw increased appetite for collaboration in the not-for-profit sector as a result of the global financial crisis. Organisations collaborated or built new distribution services with peers to meet growing demand for social outcomes. In fact, the Department of Social Services found more than half of not for profits were considering collaboration during that time.
Collaboration shouldn’t just be a “go to” for down times. Neither should it be limited to the sector – cross-sector collaboration. Partnerships offer limitless potential for not-for-profit organisations looking to ensure sustainability into the future.
More and more, we are seeing corporates and government collaborating and co-designing with NFPs. Ultimately, this benefits not only the bottom line for not-for-profit organisations, but also the communities they serve.
About the author: Andrew Cairns is the CEO of Community Sector Banking. He believes NFPs are at the heart of a healthy society – they create the social fabric of those communities and ensure their wellbeing. After more than 30 years working nationally and internationally in the corporate sector, he maintains that business can and should be a force for good.