ANITA COBBY

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Moving beyond the mission
NFP FUNDING
By Simon Joyce
Associate Director – Audit and Advisory YCG
THE move to person-centred funding (as
being implemented under the National
Disability Insurance Scheme) is causing
many organisations both within disability
and other sub-sectors to critically assess their
organisations.
While Government reform is a significant
driver of change within the sector, it cannot be
seen as the only driver of change.
Indeed, advances in technology, social
media, pressures faced by donors and supporters;
and the threat of entry of the private
sector into service delivery, are not only seen
as influencing the magnitude of the change,
but also the speed with which it is likely to
take effect.
Many of these external factors create opportunities
and challenges for current service
providers and new entrants.
Importantly, clients in an open, competitive
market, will be able to allocate their
support funding how they wish, and access a
provider of their choice, giving them complete
flexibility – possibly for the first time.
While this is particularly pleasing for
clients, it is unnerving for service providers.
Many are being forced to anticipate change,
act quickly and allocate funding to activities
outside of the core mission.
Many NFPs have fallen into, and in some
instances actively fed the “Nonprofit Starvation
Cycle” – the cycle of chronic underinvestment
in NFP systems and infrastructure to
allocate more money to the mission.
Ironically, it is this sheer devotion to mission
which is causing many NFPs to become
unstuck in this rapidly changing environment.
More and more, NFP organisations need
to change their business models and challenge
current thinking to remain sustainable.
Equally, organisations are considering
investment in technology and processes will
make them more efficient.
Spending on non-traditional activities
(like marketing and branding) is being explored
and embraced, and no longer considered
the domain of the corporate sector.
We have seen a convergence of boundaries
that have existed between the corporate and
social sectors.
Corporate perspectives on CSR and social
impact are shifting and social impact organisations
are becoming more commercial in
the way they are run and how they allocate
funding.
There is a lot to contemplate for NFP
Boards and Management teams. Leaders
within the sector are actively considering how
best to respond and how they might make
their business models more innovative and
commercially sustainable.
It is our view that a differentiated approach
to running an NFP is required. Strategic
planning cycles should be shortened from the
traditional five year view, to a two year view,
the power of technology (cloud computing
and social media in particular) should be
embraced and organisations should put the
client at the centre of all it does, and all it plans
to do.
In this changing environment greater
consideration should be given to external
influences (like competitors, peers and the
market) over internal influences and traditions,
financial planning and robustness needs
to be introduced to all new ventures, and,
alliances with other NFPs and commercial
organisations should be actively encouraged
and pursued.
Preparing an NFP for the future is fundamentally
about embarking on a journey of
self-discovery – who are we as an organisation;
how will the legacy of our work succeed
us as individuals and governance committees
and what do we need to do to ensure we
remain sustainable and relevant.
Asking and seeking to answer telling key
questions breaks th e problem down into bite
sizes, and makes the aspiration of running a
futureproofed organisation more realistic:
Who are our clients (current and future)
and what are their needs (met and unmet)?
What are we seeking to achieve for our
stakeholders?
What services will we offer, and (importantly)
what services will we choose not to
offer? And why?
What is our unique value proposition
and how do we differentiate ourselves in a
crowded and increasingly competitive market
place?
Who are our running mates – and how can
we develop and incubate meaningful alliances
and partnerships that strengthen our brand
and increase the odds success in the long
term?
Will our overall strategic choices enable us
to achieve our growth aspirations?
It is our view that a wait-and-see approach
is not a strategy. Boards, CEOs and Executive
Teams must be able to shut out the noise
and act decisively in driving towards a future
vision.
44 WESTERN SYDNEY BUSINESS ACCESS JANUARY 2016