It's time for non-profits to bounce back

A recent report into not for profit remuneration in Australia (http://bit.ly/4LGiJw)found that in 2009 executive remuneration fell almost 2% on that of 2008. Anecdotally, well not really anecdotally, as we have emails from clients that confirm this, not for profits, over the past twelve months have battened down their hatches in other areas including professional development, bonuses and hiring of staff.

It's time to bounce back. Let's acknowledge that we have emerged from a global financial crisis in better shape than some other nations but not without cost! Let's acknowledge that there remains still some downside risk, in particular uncertainty of ongoing funding from the Commonwealth as it moves to reduce stimulus spending debt in coming years. Let's also acknowledge that continuing to operate with the battens firmly in place could allow the ship to drift onto dangerous rocks.

There comes a time when Boards of Governance, Chief Executive Officers and management teams need to stand up and be counted. That time is now. Yes you are trustees of community organisations however continuing to duck for cover will serve noone in the long term, not the community, not staff and not Government funding bodies. Every management team needs to be able to manage its way through turbulent times and it also needs to be able to identify creative ways of moving out of turbulence and into calmer waters. It is time for the Captain of the ship and the entire team of ships officers to emerge from below, take a place on the bridge and look out over the bow of the ship into the future rather than out over the stern at the past.

Many not for profits will emerge from the current financial crisis seeking a different and better way of doing business. They will seek a model that is more sustainable and less at risk of funding issues. I am prepared to project that over the next 5-8 years many will be forced to reexamine their business model and to look at alternatives forms of revenue. As the movement towards social enterprises continues to grow Government funders will also reexamine how they distribute funds. Any shortfall in Government funding in the foreseeable future will increase the demand for greater accountability by the sector. This in turn will place pressure on management teams to perform to higher standards and become more creative.

The for-profit sector will emerge from the current crisis at full tilt. The demand for employees in the for-profit sector will be insatiable over the next two decades. Not for profits will have difficulties retaining and recruiting staff. Many, many key staff will be enticed away from the sector.

How do non profits minimise the impact of these emerging events? For a start give your current management team something to get their teeth into, something that stretches and develops their potential. In other words give them a reason to stay in the sector, with your organisation. Encourage them to reinvent the future of non profit service delivery rather than asking them to maintain the past.

Encourage your managers to join the Boards of Governance of other non-profits. The sector needs collaborative alliances to move forward into the future. Your organsiation needs managers with a broad perspective of the emerging environment. Every Board of Governance needs a shake up. Too many Boards are sitting on an age old belief that they are there to be trustees of some ideal or a pot-full of old money. Communities need to learn that not for profit organsations must be operated in a business-like manner and that this requires people on the Boards able to look to the future while being mindful off, but not beholden to the past. Even centuries-old, bluestone charities will need a tsunami every couple of years if they are to maintain their level of donations.

Finally, bring your Board members, management team and staff together, frequently to talk about the future. Don't leave this discussion to the board only. The future will not be dependent upon one person, it will happen because of such collaborative activities.

Well that's my opinion. This is my final blog for 2009 for the not for profit sector. I have a parting request. If you disagree with me, or take issue then say something, respond to the blog, send me an email. Let's have some healthy and robust debate about the future.

For those that have followed this blog throughout the year, I thank you, I wish you well for the festive season, however you celebrate, and you should know that I will return in 2010. May each of you mention the word 'peace' at least once in your New Year wishes.

Let The Journey Continue
John Coxon
Taking You From Frontline Manager To CEO
Follow john_coxon on Twitter
Share with johncoxon1 on Facebook
Email: john@johncoxon.com.au