Working for a common good with a low or slow cash flow is the defining challenge for the non-profit sector. But pressure points are building in other areas as well according to a recent state of the sector survey.
Money is a constant concern for most not-for-profit groups. Many subsist on a lean diet of government grants, hand-outs and corporate gifting.
Little surprise then that fundraising and finances ranked among the top three “issues of significance” for organisations surveyed by accounting firm Grant Thornton in its latest biennial report on the non-profit sector.
Of the 297 groups that participated in the survey - touted as the most comprehensive of its kind in New Zealand - 56 per cent cited money as a key area of significance, down from 68 per cent when the survey last made its rounds in 2005.
Competing concerns were “staff retention and motivation of staff” and “governance” - the buzz word that has come to represent the work of boards and executive.
Survey co-ordinator Graeme McGlinn says staffing issues appear to be causing the sector more grief than ever. Although two-thirds of the non-profits surveyed had fewer than 50 staff or volunteers, per cent had more than 500 staff on their rolls.
In this most recent survey, 32 per cent of respondents cited staff retention and motivation as a significant issue, up from 23 per cent in 2005.
McGlinn says the change was the single “biggest mover” in the survey. He thinks it reflects staffing problems faced by the business community at large.
“There’s hardly an area within the economic community that isn’t screaming because they’re short a skill set. You can’t find builders, you can’t find electricians, you can’t find anyone. Our economy is growing at a rate that we don’t have the people coming through. People are short of time, they’re having to do more over-time, they haven’t got as much time for the community sector, wages are going up, volunteer time is dropping, all those factors.”
Unlike businesses which can bid for talent with attractive wages or incentives, non-profits are having to trump up the goodwill and special interest factor to draw and keep good people on board.
McGlinn says non-profits that want to stay viable in a competitive market have to think smartly and creatively about how they run their operations, both in terms of manpower and finance.
The two go hand in hand, he says.
“It’s not sexy to fund administration but without good administration within these organisations, it gets in the way of a charitable outcome.”
If personnel and money problems were not bad enough, the sector may have another headache brewing: a potential vacuum of high-profile volunteers who can command instant cash and mobilise the troops when necessary.
Only 10 per cent of those surveyed rated volunteerism as significant (down considerably from 21 per cent in 2005), but those at the coal face viewed it more seriously.
Lady Adrienne Stewart, one of Christchurch’s leading philanthropic string-pullers, says people such as she cannot be expected to hold the helm for much more.
Lady Adrienne, while attending Grant Thornton’s survey release function, encouraged non-profits to start cultivating a replacement base of well-connected, charitably-minded volunteers.
She estimates her volunteer commitment at an average of 20 hours a week and says the demand for time and money is unrelenting.
“You can focus on the governance and all the issues and have the best plans but if you’re not sure of your funding, you won’t survive. Every charity I’ve ever been involved in and I’m talking over 40 years, they’re either starting from nothing or have built their corporate plan up, but there’s never enough money.”
Although many non-profits satisfy themselves with basic survival, McGlinn believes long-term sustainability will require a more business-like approach.
It is a change he has already noticed in the sector, with more modelling themselves in a corporate fashion.
Tags: Business, business community, businesse, buzz word, eci, economy, grant thornton, lean diet, money, pressure points, respondents, rv, staff retention, sti, sustainability, The Business, ubs, volunteer time, wages