New research puts charities in the “golden quadrant” of leadership

Charities are widely regarded as “the stewards of public interest”, but lack of investment in technology may be detrimental to the future of the sector, writes Samuel Wilson. 

Charities are at the heart of our social ecosystems and play a vital role in building and sustaining our flourishing communities. Yet, charities face several challenges that have only become more complex in a post-pandemic environment.

Increased demand for services, financial sustainability, increasing job complexity, a declining volunteer workforce and the need to re-establish relationships with donors – addressing these challenges, while also coping with sustained impacts on the mental health, wellbeing and resilience of charity employees and leaders, should be major focus of the sector in 2023.

Ultimately, this is the work of leadership. It requires charity leaders to orchestrate and create the conditions to address these issues, while sustaining the community goodwill and the social license to operate that charities have historically enjoyed. 

Making the matter more complicated still is the fact that doing so requires not only superb organisational leadership but also, because these are shared challenges, sophisticated sector and cross-sector leadership.

What, then, is the current state of leadership in Australia’s charity sector? How does the leadership of charities compare to other institutions in the public and private sectors? What are the types of things that charity leaders can do to sustain public trust and confidence in charities?

Unpacking charity leadership

Drawing on over 12 months of data, the Australian Leadership Index has recently released its first major report into the state of leadership in the charity sector, as seen through the eyes of the Australian public.

Happily, for the sector, charities are widely regarded as among the stewards of public interest and as demonstrating strong leadership for the greater good. This is especially apparent when charities are compared with national leadership benchmarks.

In the context of not-for-profit institutions, charities are practically in a league of their own. 

Our results reveal that charities are one of only two not-for-profit institutions in the “golden quadrant”— good intentions and the ability to enact these intentions — which testifies to the high regard in which charities are held by Australians. The only other not-for-profit institution that enjoys comparable social esteem are higher education institutions. 

These results contrast markedly with trade unions and religious institutions, which are regarded highly unfavourably.

In addition to showing strong public leadership, charities are also judged to perform strongly on the three drivers of leadership for the greater good: integrity, contribution and competence. Charities are seen to be very high on public integrity and perform well above the national benchmark in terms of their contributions to the social dimensions of the public interest; namely, advancing the health, welfare and well-being of society. 

Overall, Australians believe that charities make an invaluable contribution to public life.

Key focus areas for the sector in 2023

There are nevertheless areas that warrant some attention in 2023. These areas are primarily in the domains of competence and contribution, which are also the most important factors that predict public perceptions of charity sector leadership.

The main area for improvement is technological innovation. Indeed, this is the only metric on which charities lag behind the national benchmark to a large degree. 

Although the challenges of keeping pace with technology are well recognised by charities, addressing this issue, and being seen to address it competently and successfully, is essential, especially in the context of the high-profile data hacks of 2022. 

Given that public perceptions of low technological innovation in the charity sector relates to the sector as a whole, addressing this challenge needs a sophisticated multi-sector approach. The high trust enjoyed by the sector and the sense that the sector is characterised by strong public integrity are assets that could be leveraged in the search for solutions. 

There are a host of things that charity leaders can do, individually and collectively, to sustain and enhance public perceptions of the sector’s integrity, contribution, competence, and leadership. 

These range from better communicating the good intentions and civic purpose of charities to ensuring that the impact of charities is detectable so that citizens and stakeholders alike can better appreciate the value created.