The Carter model of governance sets out the roles and responsibilities for members of the governance group. The roles are clear; the board sets out strategy and the executive implements that strategy, and takes whatever actions are called for, within operating guidelines.
In practice the two groups meet at regularly scheduled meetings where issues of policy and practice are discussed and decisions made that enable the organisation to operate smoothly.
In practice it is not quiet as smooth as that, as I am reminded from time to time, when clients contact me to discuss the issues they are experiencing. A couple from the past twelve months or so come to mind.
In the first instance the CEO made a decision to expand a nfp organisation beyond existing geographical borders. There was a precedent for doing so, the organisation had done just that a year or so earlier. In a sense the CEO was simply continuing a process that had begun earlier. The issue here was the CEO assumed the board wished to continue that process and forgot one important consideration. The CEO serves at the behest of the board. It is correct the CEO runs the business; rather than the Board. At the same time the CEO is a servant of the board and should choose to seek guidance, or ask, rather than assume and tell.
In the second instance, the CEO of another non-profit made a decision to purchase another business. This intention had been flagged during earlier discussions but no information had been provided to the board. When the opportunity came to make the purchase, which was in line with the strategic direction of the organisation, the CEO provided the board with a one paragraph email and a rudimentary set of figures. The issue for some board members was the inadequate level of information and insufficient time for informed debate. The decision was eventually discussed and endorsed by the required minimum votes. The outcome was a division of board members and the eventual resignation of some. Boards are there to hold the CEO accountable. CEO's need to consider that if they expect volunteer board members to put their name to the activities of an organisation then those board members deserve to be provided with an adequate level of information and sufficient time for debate.
Thursday, October 9, 2008
Friday, August 8, 2008
Looming labour shortage
Over the next 3-4 decades, throughout the developed world, 26% of the adult population will enter retirement age. Simply becoming 65 years old doesn't mean automatic retirement, for some the option of retiring simply is not there. However employer agencies will face a number of issues related to our ageing society.
The community sector will be particularly hard hit by this emerging scenario. Why? The community sector is the poor cousin when it comes to remunerating its people. As a sector it recruits a range of professionals including psychologists, counsellers and social workers. These same people are in high demand in our public sector, health sector, education sector and the private sector. Where upon in recent years there has been a surplus of people entering these professions, there will be less people doing so within the next generation of people and those that are currently in the workplace are rapidly heading towards retirement age.
To add to the complexity of the equation, many professionals in our field are female. In many instances, females are more suited to many of the roles and in the past many of these roles have been part-time, again suiting the need amongst working mums for flexible work hours. For many of the baby boomer group, both parents have been working for a number of years now, they have invested and saved towards their retirement and they don't share the viewpoint of their parents that they should work themselves to death. While employers would prefer phased retirement, it is possible the bulk of those turning 60+ over the next few years will simply choose to take their money and relax to the best of their abilities.
From 2021 the baby boomers will begin to enter the retirement stage of their lives, in fact the first of that group will begin to enter aged care. This will likely create shortages of staff in our sector. The community sector is a people business - outcomes are achieved by people interacting one on one with other people - when there is a shortage of labour, our service sector organisations will be unable to effectively deliver services.
As service providers what can we do to minimise the impact of this trend? Firstly, we cannot reverse the trend. We need to look at our recruitment and retention processes. We will need to look, critcally, at our workplace practices and at how we deliver our services and we will need to look at our funding strategies as we will likely need to pay higher levels of remuneration than Government funding would allow for. One thing is for certain we will need to be proactive rather than wait for Government guidance. While Governments are aware of the looming issues, they are incapable of proactive action and will only react to public pressure for change after the cost has been incurred.
First step is some long term strategic planning. While it is difficult to predict labour needs beyond the short term; it is possible to make some projections and undertake scenario planning. More importantly the process focuses the governance team and management on the emerging environment and begins to shape future planning.
Predicted labour shortages are likely to cause a great deal of heartache amongst governance teams of community organisations, in particular those that have paid employees. The traditional approach within the sector is to wait till a problem impacts, then to complain loudly about the lack of support from Government. This approach will little effect in regards to labour shortages. Government everywhere cannot change the population statistics. They cannot build factories to clone and create the numbers of workers needed worldwide over the next 40 years. If those people are not born now, then it is to late.
Governance teams will be forced to grapple with a number of strategic issues. Top of the list will be how to fund their organisation. Look for exponential development of hybrid non-profits, those that have a commercial arm to the operation, as they seek to develop a revenue source independent of Government. For many governance groups this strategy is an anathema. Similarly, as organisations look to their operational processes and their ability to deliver services, governance groups will have to grapple with questions of merger and shared service delivery. Fighting over a limited pool of people is counterproductive. It will generate a self-feeding cycle of remuneration increases thus directly impacting upon service delivery.
In a strange way, pending labour shortages will likely impact more upon smaller service providers than the large providers. The large providers have greater resources and financial reserves, the will likely be able to be more strategic in their offerings to employees, they can share resources across centres and minimise costs.
In the past non-profits have relied upon 'social conscience', a vague term used to describe why someone would work hard for little remuneration in a sector that provides little in the way of personal recognition. Look at today's Gen Y, do they have a social conscience? Yes they do, however it is one that is tailored to meet their own personal needs, not those of society in general or any specific sector of the community. They also clearly understand the need to earn sufficient money to fund their needs. They will not work for nothing as many of the current generation do in the community sector.
One benefit an ageing population may offer is a growing pool of potential volunteers. Twenty six percent of the population will be seeking ways to utilise their time during their retirement. Many will also seek to implement a phased retirement process, therefore a pool of part time workers will be available. Will they work for peanuts? Only in so much as Government policy forces them to. On the flip side a larger pool of people will be available to draw board and committee members from. This may lead to more proactive governance.
A downside of an ageing population will be an increased need for service delivery by community organisations, from aged care to medical services, to support and advice, the list of needed services will continue to grow. At a time of the greatest need our service providers will face the greatest shortage of labour!
The community sector will be particularly hard hit by this emerging scenario. Why? The community sector is the poor cousin when it comes to remunerating its people. As a sector it recruits a range of professionals including psychologists, counsellers and social workers. These same people are in high demand in our public sector, health sector, education sector and the private sector. Where upon in recent years there has been a surplus of people entering these professions, there will be less people doing so within the next generation of people and those that are currently in the workplace are rapidly heading towards retirement age.
To add to the complexity of the equation, many professionals in our field are female. In many instances, females are more suited to many of the roles and in the past many of these roles have been part-time, again suiting the need amongst working mums for flexible work hours. For many of the baby boomer group, both parents have been working for a number of years now, they have invested and saved towards their retirement and they don't share the viewpoint of their parents that they should work themselves to death. While employers would prefer phased retirement, it is possible the bulk of those turning 60+ over the next few years will simply choose to take their money and relax to the best of their abilities.
From 2021 the baby boomers will begin to enter the retirement stage of their lives, in fact the first of that group will begin to enter aged care. This will likely create shortages of staff in our sector. The community sector is a people business - outcomes are achieved by people interacting one on one with other people - when there is a shortage of labour, our service sector organisations will be unable to effectively deliver services.
As service providers what can we do to minimise the impact of this trend? Firstly, we cannot reverse the trend. We need to look at our recruitment and retention processes. We will need to look, critcally, at our workplace practices and at how we deliver our services and we will need to look at our funding strategies as we will likely need to pay higher levels of remuneration than Government funding would allow for. One thing is for certain we will need to be proactive rather than wait for Government guidance. While Governments are aware of the looming issues, they are incapable of proactive action and will only react to public pressure for change after the cost has been incurred.
First step is some long term strategic planning. While it is difficult to predict labour needs beyond the short term; it is possible to make some projections and undertake scenario planning. More importantly the process focuses the governance team and management on the emerging environment and begins to shape future planning.
Predicted labour shortages are likely to cause a great deal of heartache amongst governance teams of community organisations, in particular those that have paid employees. The traditional approach within the sector is to wait till a problem impacts, then to complain loudly about the lack of support from Government. This approach will little effect in regards to labour shortages. Government everywhere cannot change the population statistics. They cannot build factories to clone and create the numbers of workers needed worldwide over the next 40 years. If those people are not born now, then it is to late.
Governance teams will be forced to grapple with a number of strategic issues. Top of the list will be how to fund their organisation. Look for exponential development of hybrid non-profits, those that have a commercial arm to the operation, as they seek to develop a revenue source independent of Government. For many governance groups this strategy is an anathema. Similarly, as organisations look to their operational processes and their ability to deliver services, governance groups will have to grapple with questions of merger and shared service delivery. Fighting over a limited pool of people is counterproductive. It will generate a self-feeding cycle of remuneration increases thus directly impacting upon service delivery.
In a strange way, pending labour shortages will likely impact more upon smaller service providers than the large providers. The large providers have greater resources and financial reserves, the will likely be able to be more strategic in their offerings to employees, they can share resources across centres and minimise costs.
In the past non-profits have relied upon 'social conscience', a vague term used to describe why someone would work hard for little remuneration in a sector that provides little in the way of personal recognition. Look at today's Gen Y, do they have a social conscience? Yes they do, however it is one that is tailored to meet their own personal needs, not those of society in general or any specific sector of the community. They also clearly understand the need to earn sufficient money to fund their needs. They will not work for nothing as many of the current generation do in the community sector.
One benefit an ageing population may offer is a growing pool of potential volunteers. Twenty six percent of the population will be seeking ways to utilise their time during their retirement. Many will also seek to implement a phased retirement process, therefore a pool of part time workers will be available. Will they work for peanuts? Only in so much as Government policy forces them to. On the flip side a larger pool of people will be available to draw board and committee members from. This may lead to more proactive governance.
A downside of an ageing population will be an increased need for service delivery by community organisations, from aged care to medical services, to support and advice, the list of needed services will continue to grow. At a time of the greatest need our service providers will face the greatest shortage of labour!
Monday, August 4, 2008
Front line managers are the key
Let me share with you the results of a piece of management research conducted in 2007 amongst health providers in the USA. View summary and white paper here. I originally posted this on my health management blog and though the research focuses on health management I believe the findings are applicable to management of the non-profit sector.
The research was conducted over five years and involved 500 healthcare organisations and 200,000 healthcare professionals. The study aimed to study, job satisfaction, organisational loyalty and degree of professional engagement. What was the main finding? Here it is. Leadership capability at the front-line level influences overall performance more than any other contributing factor. Rankings of leadership capability showed positive correlations with -
- Job Satisfaction
- Organisational Loyalty
- Professional Engagement
- Willingness to continue employment
- Voluntary Turnover
- Patient Satisfaction
- Performance to projected budget
- Employee productivity
- Financial success (profitability)
I welcome feedback on this topic. Why not share your stories of how your organisation has utilised the strengths of its front line managers and supervisors?
Monday, July 21, 2008
Serving on the Board
Serving on the Board or Committee of Management for a non-profit can sometimes be exhilerating and other times damned frustrating. One thing is guaranteed it will likely always be interesting.
Unless your being asked to serve on the Board of a biggie such as Red Cross or the Salvation Army or something similar then it is unlikely you will be faced with issues of global significance. You will, however, be served a wide variety of regional or local issues to work upon. You will also likely be asked to give up far more time than the minimal one meeting per month; especially those with skills and experience in areas such as strategic planning, financial management and human resources - areas where small non-profits are particularly deficit.
Everyone knows the boardroom of your average non-profit is a hot-bed of conflicting interests and petty politics. These are people with passion. They are there because they believe. This passion does not always lead to logical decision making. For those of us that are more logic-driven than emotion-driven, the process can be frustrating. Despite the best intentions of those more anal creatures who actually believe logic overrules emotions, there will always be people on your board that will never follow logic. At least not your perspective and definition of logic.
Logic-driven people need patience. Lot's of patience. They also need well developed communication skills, the ability to sell a big picture. This helps to counter the narrow interests (and vision) of those on the board due to their passion. It's a complimentary process as those committee members with a global perspective often do not have a good understanding of local issues. This is the challenge faced by various chairpersons as they seek to bring together various perspectives. The chairperson needs to have a well balanced personality and be respected by all board members for his or her ability to blend the various perspectives.
Repore between the Chairperson and the organisations Executive Officer is critical. When relationships break down between these two people the potential for conflict and personal lose is great. The Executive Officer heads the organisation at the request of the board and reports directly to the board. While it requires extreme dislocation for a board to remove an executive officer from office; it is a brave, or foolish, executive officer that goes head to head with the governance group. Far better to spend time discussing and understanding the needs of all board members and using that understanding to help create healthy debate and informed decision making.
In theory the governance group are there to help the Executive Officer to establish policy and strategy and to provide advice when sought. It is also a role of the board to hold the Executive Officer accountable for the implementation of strategy. In practice, the theory isn't always applied. The low level of suitable candidates to serve on boards, particularly in rural areas, can lead to a form of in-built nepotism, where board members become 'yes' people and serve to simply rubber stamp the ideas of the executive officer. The risk here is that mediocrity can set in and the best qualified people end up leaving the board. The key strategy is to have in place a robust process for recruiting new board members and rotating existing members, rather than just making a 'mates appointment' when a vacancy occurs.
Membership of many non-profit boards is membership driven. You become a member and then become eligible for board membership. Given the shortage of suitable candidates for board duty, the selection process is often superficial. Very little consideration is given to required levels of expertise or skill. It is important for boards to conduct an analysis of the expertise required by the organisation they serve and proactively seek out potential board members with that experience.
Unless your being asked to serve on the Board of a biggie such as Red Cross or the Salvation Army or something similar then it is unlikely you will be faced with issues of global significance. You will, however, be served a wide variety of regional or local issues to work upon. You will also likely be asked to give up far more time than the minimal one meeting per month; especially those with skills and experience in areas such as strategic planning, financial management and human resources - areas where small non-profits are particularly deficit.
Everyone knows the boardroom of your average non-profit is a hot-bed of conflicting interests and petty politics. These are people with passion. They are there because they believe. This passion does not always lead to logical decision making. For those of us that are more logic-driven than emotion-driven, the process can be frustrating. Despite the best intentions of those more anal creatures who actually believe logic overrules emotions, there will always be people on your board that will never follow logic. At least not your perspective and definition of logic.
Logic-driven people need patience. Lot's of patience. They also need well developed communication skills, the ability to sell a big picture. This helps to counter the narrow interests (and vision) of those on the board due to their passion. It's a complimentary process as those committee members with a global perspective often do not have a good understanding of local issues. This is the challenge faced by various chairpersons as they seek to bring together various perspectives. The chairperson needs to have a well balanced personality and be respected by all board members for his or her ability to blend the various perspectives.
Repore between the Chairperson and the organisations Executive Officer is critical. When relationships break down between these two people the potential for conflict and personal lose is great. The Executive Officer heads the organisation at the request of the board and reports directly to the board. While it requires extreme dislocation for a board to remove an executive officer from office; it is a brave, or foolish, executive officer that goes head to head with the governance group. Far better to spend time discussing and understanding the needs of all board members and using that understanding to help create healthy debate and informed decision making.
In theory the governance group are there to help the Executive Officer to establish policy and strategy and to provide advice when sought. It is also a role of the board to hold the Executive Officer accountable for the implementation of strategy. In practice, the theory isn't always applied. The low level of suitable candidates to serve on boards, particularly in rural areas, can lead to a form of in-built nepotism, where board members become 'yes' people and serve to simply rubber stamp the ideas of the executive officer. The risk here is that mediocrity can set in and the best qualified people end up leaving the board. The key strategy is to have in place a robust process for recruiting new board members and rotating existing members, rather than just making a 'mates appointment' when a vacancy occurs.
Membership of many non-profit boards is membership driven. You become a member and then become eligible for board membership. Given the shortage of suitable candidates for board duty, the selection process is often superficial. Very little consideration is given to required levels of expertise or skill. It is important for boards to conduct an analysis of the expertise required by the organisation they serve and proactively seek out potential board members with that experience.
Sunday, July 20, 2008
Sustainability is created through meeting community needs
The bottom line for community organisations is sustainability - the ability to effectively deliver services, as funded, to those in need; and where possible, to also add value through the creation of community programs designed to meet the needs of those that fall outside funding body guidelines.
An organisation can only effectively deliver services if it has in place three things. One, effective systems and processes, including quality financial management systems. Two, management and administrative support and three, a team of experienced people to deliver services. These three form the legs of a triangle. Remove one of the three legs and the ability of the organisation to remain effective will be severely compromised.
Sustainability is created by ongoing funding. This can only be ensured by achieving outcomes. Funding bodies are overwhelmed by submissions for funding. To be considered your organisation must be seen to be able to achieve the outcomes it committed to achieving. Your ability to do this is enhanced by having in place appropriate systems and support.
The key to achieving outcomes is for all involved with the organisation to remember the reason for their existance; that being to help those in need within the community. All the funding, all the systems and all the people should be in place to achieve just that. Your organisation will be judged by funding bodies based upon your ability to implement programs and achieve agreed upon outcomes or service standards. Ongoing funding is dependent upon your ability to meet agreed upon outcomes.
One of the risks of being a recipient of funding grants can be that the focus is entirely on service delivery in line with funding requirements. The ease of accessing mainstream funding can often remove the need to understand the needs of the community; instead the funding guidelines become accepted as the indicative community need.
Sustainability is enhanced by understanding community need and being in a position to meet as much of that need as practical. Don't become reliant upon the guidelines of funding bodies. Become familiar with the needs of your community and with the capacity of both your organisation and others in the community sector to meet that need. The greater your understanding of community need the better your ability to attract greater levels of funding from multiple sources. In that way your organisation will achieve sustainability and the community will benefit.
An organisation can only effectively deliver services if it has in place three things. One, effective systems and processes, including quality financial management systems. Two, management and administrative support and three, a team of experienced people to deliver services. These three form the legs of a triangle. Remove one of the three legs and the ability of the organisation to remain effective will be severely compromised.
Sustainability is created by ongoing funding. This can only be ensured by achieving outcomes. Funding bodies are overwhelmed by submissions for funding. To be considered your organisation must be seen to be able to achieve the outcomes it committed to achieving. Your ability to do this is enhanced by having in place appropriate systems and support.
The key to achieving outcomes is for all involved with the organisation to remember the reason for their existance; that being to help those in need within the community. All the funding, all the systems and all the people should be in place to achieve just that. Your organisation will be judged by funding bodies based upon your ability to implement programs and achieve agreed upon outcomes or service standards. Ongoing funding is dependent upon your ability to meet agreed upon outcomes.
One of the risks of being a recipient of funding grants can be that the focus is entirely on service delivery in line with funding requirements. The ease of accessing mainstream funding can often remove the need to understand the needs of the community; instead the funding guidelines become accepted as the indicative community need.
Sustainability is enhanced by understanding community need and being in a position to meet as much of that need as practical. Don't become reliant upon the guidelines of funding bodies. Become familiar with the needs of your community and with the capacity of both your organisation and others in the community sector to meet that need. The greater your understanding of community need the better your ability to attract greater levels of funding from multiple sources. In that way your organisation will achieve sustainability and the community will benefit.
Thursday, June 26, 2008
A corporate focus
At a recent conference held by the New Zealand Council of Christian Social Services, Lin Hatfield Dodds, (Press Releases NZCCSS, Monday April 14th), was reported as saying it is time for the community sector to stop referring to itself as being 'not for profit'. I absolutely agree with this statement. It is time the sector grew up and realised that to effectively deliver services beyond the basics demanded by Government funding bodies it is necessary to earn more than we spend. Every organisation in the community sector that generates funds is first and foremost a business. If it generates revenue and spends that revenue then it is a business and it should be operated in a business-like manner.
Dodd's suggests the call to mimic the corporate world is a challenge to the core identity of community sector organisations. On this point I disagree. If we fail to operate in a structured manner our community organisations will remain ineffective, be unable to deliver any more than a basic service, continue to operate under restrictive funding models, be unable to attract quality key staff in an era of looming staff shortages, be unable to provide existing staff with an enjoyable work environment and the list goes on. The best outcomes can only be achieved if firstly the organisation is operated along established business practices.
It is not a given that a corporate approach ignores or somehow jeopardises our ability to meet the needs of people. Such thinking is a state of mind. The key factor that enables a community organisation to help those in need is money - good, old fashioned, dirty old lucre - without it your community organisation can achieve very little. It is true that a corporate-like approach to service delivery enhances our ability to maximise the benefits to the widest possible group of people. People deliver services not corporations, however these people need behind them systems and processes that enable them to deliver their service in an effortless manner. This support costs money.
I am not denigrating the thousands of small volunteer run community organisations when I say that there is a limit to what can be achieved by each individual community organisation that chooses to be run entirely by volunteers. I fully comprehend the value many of these organisations add to our community. I believe also they could contribute a lot more if they moved away from protecting their own little kingdom and looked at the options for improved service delivery.
Dodd's and others suggest the community sector should be a 'people sector'. One that puts people ahead of profits. Agreed, we are in the people sector. More to the point it is not about making a profit; it is about generating sufficient revenue. Government funding options will never be sufficient to meet a need. Additional funding has to be obtained from a variety of sectors, each which demands a degree of accountability. I would suggest the reason a service is curtailed or not made available is because the provider has insufficient 'revenue' to do so.
The mentality in many community organisations is to tailor their service delivery to match the level of current funding. Instinctively this suggests costs will be cut to match operational funding and to avoid any use of reserves. This approach is self defeating. It limits the ability of the organisation to be truly effective. It creates fear at all levels within the organisation, it discourages creativity and initiative and it stifles innovation. Worse still it ensures we only attract people to our organisations that are completely risk averse.
I would suggest that instead of focussing on cutting expenses to the level of revenue, your organisation would be well served by identifying the level of service it believes is needed and can effectively be delivered, the appropriate systems and process and the resources and people needed to deliver that service. Having done that, go out and source the amount of funding from a variety of sources, that enables your service to be delivered, that enables the maximum number of people to benefit. Don't tailoring the service to the revenue, instead maximise revenue to maximise service delivery.
Dodd's suggests the call to mimic the corporate world is a challenge to the core identity of community sector organisations. On this point I disagree. If we fail to operate in a structured manner our community organisations will remain ineffective, be unable to deliver any more than a basic service, continue to operate under restrictive funding models, be unable to attract quality key staff in an era of looming staff shortages, be unable to provide existing staff with an enjoyable work environment and the list goes on. The best outcomes can only be achieved if firstly the organisation is operated along established business practices.
It is not a given that a corporate approach ignores or somehow jeopardises our ability to meet the needs of people. Such thinking is a state of mind. The key factor that enables a community organisation to help those in need is money - good, old fashioned, dirty old lucre - without it your community organisation can achieve very little. It is true that a corporate-like approach to service delivery enhances our ability to maximise the benefits to the widest possible group of people. People deliver services not corporations, however these people need behind them systems and processes that enable them to deliver their service in an effortless manner. This support costs money.
I am not denigrating the thousands of small volunteer run community organisations when I say that there is a limit to what can be achieved by each individual community organisation that chooses to be run entirely by volunteers. I fully comprehend the value many of these organisations add to our community. I believe also they could contribute a lot more if they moved away from protecting their own little kingdom and looked at the options for improved service delivery.
Dodd's and others suggest the community sector should be a 'people sector'. One that puts people ahead of profits. Agreed, we are in the people sector. More to the point it is not about making a profit; it is about generating sufficient revenue. Government funding options will never be sufficient to meet a need. Additional funding has to be obtained from a variety of sectors, each which demands a degree of accountability. I would suggest the reason a service is curtailed or not made available is because the provider has insufficient 'revenue' to do so.
The mentality in many community organisations is to tailor their service delivery to match the level of current funding. Instinctively this suggests costs will be cut to match operational funding and to avoid any use of reserves. This approach is self defeating. It limits the ability of the organisation to be truly effective. It creates fear at all levels within the organisation, it discourages creativity and initiative and it stifles innovation. Worse still it ensures we only attract people to our organisations that are completely risk averse.
I would suggest that instead of focussing on cutting expenses to the level of revenue, your organisation would be well served by identifying the level of service it believes is needed and can effectively be delivered, the appropriate systems and process and the resources and people needed to deliver that service. Having done that, go out and source the amount of funding from a variety of sources, that enables your service to be delivered, that enables the maximum number of people to benefit. Don't tailoring the service to the revenue, instead maximise revenue to maximise service delivery.
Wednesday, June 18, 2008
The Gap Between Big and Small nfp's
A glance through any directory off not for profit organisations will quickly illustrate a single statistic. That is the gap between the large not-for-profit organisations and the small not-for-profit organisations. This gap is measured is gross operating revenue - much in the same way as we would measure those organisations in the for profit sector!
In Australia it is estimated there are around 700,000 nfp organisations, which around 30,000 employ staff, the remainder are operated mainly by corps of volunteers. In New Zealand it is estimated there are around 30,000 nfp organisations. The vast majority of not for profit organisations are small, have only a handful of paid staff, if any, and survive (just) on meagre resources. For the majority their revenue comes from small time sources such membership fees, fundraising activities and donations.
At the 'big end' of town, again to borrow terminology from our colleagues in the for-profit sector, we have those non-Government, not-for-profits primarily funded by Government to deliver services on behalf of the Government. In total, these nfp's number few yet they have access to the vast majority of funding and resources. Let us not forget also, the nfp's at the big end of town are also significant employers of staff.
This dichotomy clearly disadvantages the majority of not-for-profit organisations, yet it is a natural process. Tirrana Surhood labelled this larger group Small Non-Government Organisations (SNGO's) in a paper she presented to the Partnerships and Activism conference at the University of Western Sydney in 2000 when she called for SNGO's to create a 'voice' for themselves - so that they may be heard. Tirrana's call may have been ahead of its time, or maybe no one was listening back then. I believe the rationale that Tirrana applied then remains relevant today - maybe even more so.
The emerging environment of the nfp sector favours those larger, better resourced, more coordinated organisations, in particular those able to distribute services into multiple communities. I stated earlier that the division of organisations based upon size is a natural process - to a degree - yet i do not believe it needs to be an inevitable process. I also believe it is unhealthy for any market, whether it be in the commercial sector or the nfp sector, to be dominated by a small number of suppliers. The ultimate losers will be those the organisation is supposed to help.
Divisions in the corporate sector occur as a result of competition. Some organisations are better at doing the job than others therefore they garner a greater share of the market. The not for profit sector is not a competitive sector, at least not in the sense that the sector 'sells' its services. The pricing mechanism within the not for profit sector is not used as a competitive tool. Divisions in the not-for-profit sector are created by funding bodies being selective in their distribution of funds. In their desire to make life easy for themselves funding bodies prefer to deal with one larger provider than several smaller organisations. While this is understandable it is debatable as to whether such selective practices actually create efficiencies in service delivery.
The reality is this. The division between large and small already exists and it will continue to exist into the future. Those SNGO's can elect to sit on their bums and await the inevitable grim reaper or they can elect to become proactive in controlling their own destiny. Tirranna Surhood was right, the smaller nfp's need a voice, a coordinated peak body that will speak and act for them, that will advocate and attempt to influence funding decisions. Tirranna even suggested in her paper that the 'voice' may not need to be a national one; that a combining of resources at a community level may be even more effective. But even more is needed. the larger nfp's should recognise the inherent benefits of a diverse group of providers. They have the resources, courtesy of inequitable funding distributions, and they are in the business of helping others - it is time to extend some of that help to the smaller not for profit organisations that work along side them. There are many ways in which this could be achieved, from seconding key staff to sharing resources to providing back office support in the form of human resources and many, many others.
In turn the SNGO's need to become more proactive, they in turn need to explore how they might latch onto the resources and expertise that exist within larger organisations. Near to where I live a large nfp aged care provider prepares the payroll for a much smaller nfp aged care provider. They compete for customers yet they collaborate and they cooperate and both survive in a market that is much richer for the diversity and choice that is then available to the customer.
In Australia it is estimated there are around 700,000 nfp organisations, which around 30,000 employ staff, the remainder are operated mainly by corps of volunteers. In New Zealand it is estimated there are around 30,000 nfp organisations. The vast majority of not for profit organisations are small, have only a handful of paid staff, if any, and survive (just) on meagre resources. For the majority their revenue comes from small time sources such membership fees, fundraising activities and donations.
At the 'big end' of town, again to borrow terminology from our colleagues in the for-profit sector, we have those non-Government, not-for-profits primarily funded by Government to deliver services on behalf of the Government. In total, these nfp's number few yet they have access to the vast majority of funding and resources. Let us not forget also, the nfp's at the big end of town are also significant employers of staff.
This dichotomy clearly disadvantages the majority of not-for-profit organisations, yet it is a natural process. Tirrana Surhood labelled this larger group Small Non-Government Organisations (SNGO's) in a paper she presented to the Partnerships and Activism conference at the University of Western Sydney in 2000 when she called for SNGO's to create a 'voice' for themselves - so that they may be heard. Tirrana's call may have been ahead of its time, or maybe no one was listening back then. I believe the rationale that Tirrana applied then remains relevant today - maybe even more so.
The emerging environment of the nfp sector favours those larger, better resourced, more coordinated organisations, in particular those able to distribute services into multiple communities. I stated earlier that the division of organisations based upon size is a natural process - to a degree - yet i do not believe it needs to be an inevitable process. I also believe it is unhealthy for any market, whether it be in the commercial sector or the nfp sector, to be dominated by a small number of suppliers. The ultimate losers will be those the organisation is supposed to help.
Divisions in the corporate sector occur as a result of competition. Some organisations are better at doing the job than others therefore they garner a greater share of the market. The not for profit sector is not a competitive sector, at least not in the sense that the sector 'sells' its services. The pricing mechanism within the not for profit sector is not used as a competitive tool. Divisions in the not-for-profit sector are created by funding bodies being selective in their distribution of funds. In their desire to make life easy for themselves funding bodies prefer to deal with one larger provider than several smaller organisations. While this is understandable it is debatable as to whether such selective practices actually create efficiencies in service delivery.
The reality is this. The division between large and small already exists and it will continue to exist into the future. Those SNGO's can elect to sit on their bums and await the inevitable grim reaper or they can elect to become proactive in controlling their own destiny. Tirranna Surhood was right, the smaller nfp's need a voice, a coordinated peak body that will speak and act for them, that will advocate and attempt to influence funding decisions. Tirranna even suggested in her paper that the 'voice' may not need to be a national one; that a combining of resources at a community level may be even more effective. But even more is needed. the larger nfp's should recognise the inherent benefits of a diverse group of providers. They have the resources, courtesy of inequitable funding distributions, and they are in the business of helping others - it is time to extend some of that help to the smaller not for profit organisations that work along side them. There are many ways in which this could be achieved, from seconding key staff to sharing resources to providing back office support in the form of human resources and many, many others.
In turn the SNGO's need to become more proactive, they in turn need to explore how they might latch onto the resources and expertise that exist within larger organisations. Near to where I live a large nfp aged care provider prepares the payroll for a much smaller nfp aged care provider. They compete for customers yet they collaborate and they cooperate and both survive in a market that is much richer for the diversity and choice that is then available to the customer.
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