Nonprofit ‘climate change’ – things are hotting up

This year promises to be an interesting one for Australia’s large non-profit sector, with government reforms everywhere. Dr Wendy Scaife says she is optimistic about the changes.

Anyone who’s hung out in the nonprofit sector for any time can feel climate change in the air.  We all know the temperature is hotting up in regulation with Australia to have a charity commission/one stop regulator for the first time from 1 October (in a year interestingly when NZ has just closed theirs). 

However, the pulse of change is clear too in information, professionalism and philanthropy levels too and in the sector acting as… well a sector! The impacts good and bad apply whether you are a hospital or a homeless shelter, a board chair or a grassroots volunteer.  

For a neat summary and analysis of what 2012 will hold in governance, accounting, law and regulation, look through the final pages of just released  Australian Nonprofit Sector Legal and Accounting Almanac 2011 edited by Professor Myles McGregor-Lowndes. It’s available free for download for you or your board at http://eprints.qut.edu.au/49148/. It sums up the 16 big issues and gives informed comment where needed.   Insightful observations about the upcoming Australian Charities and Not-for-Profits Commission include:

• The most far reaching policy decision in the scoping study for a national regulator is to locate it close to the ATO rather than ASIC. The independence of the ACNC from other bodies such as the ATO and Treasury should be enhanced.
• The virtual sidelining of the immediate reform of fundraising regulation and grants acquittal compliance cost reduction is also a significant policy decision by default, in that the worst and most wicked of compliance cost problems are located in these two areas.
• It is disappointing that the standards required of the sector in their reporting, with particular emphasis on impact measurement, are not to be embraced by government.
• It is unclear how the information portal disclosures will meet the objectives of better informed stakeholders without further development of common definitions of administrative and fundraising costs.

Australia has also struggled over many (many!) years to introduce a statutory definition of charity that reforms and clarifies what fits under this banner. Commentary about the Definition of Charity consultation paper concludes some key issues remain and that “It is a flawed document because it takes as its foundation the failed 2003 Bill rather than the Charities Definition Inquiry Report.”

The future will continue to see the challenge of harmonising processes and legislation in our federated nation but at least these changes are afoot. Better and fairer taxation reform is also on the government agenda with a working group to report back on laws regarding GST, FBT and DGR endorsements by year end.

Other change is coming from a below-zero base – like the challenging move from thinking as siloed organisations to identifying as part of a sector or sub-sector. The Nonprofit Roundtable has been roundtabling for a while now and there’s Community Council of Australia too. Yet, awareness of them is not high and that’s a shame – we need those sector voices and they need to hear from us verbally and in membership support. There’s power in numbers, in focus and in strategic thinking. 

For a sector that separately houses some of the nation’s greatest advocates and communicators why we are so woeful at advocating for what our nonprofit sector is and does?  Instead of trying perennially to do lots with little as we try to cure cancer, save the environment, house the aged and make great music or art, we should be building the case for proper resourcing of the sector that brings quality and equality of life to Aussie families.  Leadership is a key factor and in coming years more and more organisations will hopefully benefit from the good quality chairs, boards and CEOs that have taken some nonprofits to success and sustainability. Nonprofit leadership is critical.

Media is another area where we hope to see future change.  Frankly, I am over certain sections of the press beating up the sector every few months.  How have we reached a situation where understanding between our sector, the media and the community is so low that ill-informed, sensationalist stories see the light of day? The US has started a Nonprofit Defence Council to stop such blatant walkovers. The defence angle smacks a bit too much of being a victim. But we are reaching a moment when our sector must argue its case better to the public on the strategic issues. These range from proper resourcing to the paucity of admin costs as a measure of success. They embrace the need for more people to consider ongoing, regular giving rather than waiting for the next cyclone or bushfire or flood, and many other points besides. As a sector, we engage too little with the forces that determine our future instead of setting out to manage that future.

Some change is evident too in fundraising practices and sources.  The turn of the Millennium advent of a new form of philanthropic foundation for families, individuals or companies (Private Ancillary Funds – PAFs) has reached adolescence.  With some 858 PAFs having injected many new millions into giving now and in the future through compounding interest, the opportunities for charities to benefit are growing. The recently released Foundations for Giving study reveals more about the motivations of the people behind structured foundations. 

Just as more affluent Australians are giving in a more ongoing, larger and considered way, so too are average supporters. Probably the major growth area in giving and fundraising is the regular giving phenomenon, where people give monthly from a bank account, credit card or payroll debit. E-fundraising is growing too particularly in the online events area such as virtual climbs of Mt Everest. However, the main use of social media as yet has been in achieving better communication and relationships – no bad thing between people who donate and the organisations who need them. Of course, virtual volunteering is also a trend thanks to technology. People are doing behind the scenes admin for nonprofits from wherever they are and the opportunity to embrace more people anywhere in the world is limited only by a nonprofit’s imagination and energy. 

Overall, it is likely that real change will remain glacially sluggish in some areas but Australia is clearly becoming a more giving nation. The nonprofit climate, it is  a’changin.

Dr Wendy Scaife studies and teaches philanthropy and fundraising and has been part of ACPNS since 2002. Her research spans the cause and giver spectrum. Wendy was on the Research Australia Philanthropy and National Compact Steering Committees.  She serves on FIA’s Codes Taskforce and its Professional Development Committee.   Following a decade in business communication in consulting, in-house and lecturing roles, Wendy moved to the charity side as a fundraiser, state CEO/National Deputy CEO of the Leukaemia Foundation.