Doing good and doing it well
- 15 Dec 2014
How similar are the challenges and opportunities for arts and cultural organisations to those of other not-for-profit organisations – here in Australia and in New Zealand? Research by New Zealand-based company, Grant Thornton, shows us the differences are minimal.
A recent survey of over 400 not-for-profit organisations has revealed that, on both sides of the Tasman, organisations are striving to adopt more professional standards in how they manage, operate and govern their enterprises. While the number of cultural organisations represented in the survey is small, the evidence shows they share many of the same challenges and opportunities as other sectors and that once size and turnover are taken into account, there are few significant differences between the two countries. The following provides a summary of the researchers’ findings.
Funding
Funding continues to be the most significant challenge facing not-for -profits, with a significant number unable to plan more than 12 months ahead. Given the competition for funding, the researchers (as did many of the survey respondents) concluded that some form of collaboration – ranging from sharing resources, to merging and amalgamation, to using cloud technology – is a significant opportunity. For organisations hoping an improved economy may ease their funding pressures, this may come as sobering news.
Statistics: Around three quarters (76%) of New Zealand respondents and around two thirds of Australian respondents (68%) cited funding and fundraising as their major issues.
Governance
Not-for-profits are required to meet similar governance standards on both sides of the Tasman and recent changes in both countries are upping the ante. For example, not-for-profits in Australia are dealing with the recent introduction of the Australian Charities and Not for Profits Commission. One result is pressure on boards to be run by experienced people, typically from a business background. The survey revealed that small organisations are more likely to struggle with governance issues including risk management, which could see the average size of not-for-profit organisations increasing in coming years and more boards run by suitably qualified professionals.
Statistics: Less than half (43%) of New Zealand respondents and 65% of Australian respondents said that board members understood their need to meet increasingly high standards of performance and accountability, similar to those in the for-profit sector.
Social enterprise
Given the challenges presented by funding and governance issues, the trend towards social enterprises is not surprising. Social enterprises are essentially trading organisations owned by not-for-profits to generate income. While there have been a number of successes in this area, organisations without sufficient preparation or due diligence can run the risk of failure and board appointments with ample commercial and governance experience become even more critical.
Statistics: Twenty per cent of New Zealand respondents and 15% of Australian respondents expect to change their primary source of funding in the next two years. This compares with 9% of New Zealand respondents and 7% of Australian respondents who actually achieved this in the previous two years.
Social media
Along with the wider business community, not-for-profits are still discovering what social media can deliver and what it cannot. Perhaps the most compelling discovery to date is that it is not a silver bullet for fund raising, or for any other single activity. It is one marketing and communications tool among many which works best as part of an integrated strategy. Australian organisations are generally more sophisticated in their use of social media than their New Zealand counterparts, and larger not-for-profits are generally more active in social media than smaller ones.
Statistics: While percentages vary according to size and turnover, in descending order, social media is used to share news (average 96%), as part of an overall marketing and communications strategy (average 84%), to generate conversation (average 77%), to monitor opinion (average 55%) and to solicit donations (average 36%).
To find out more about current trends and issues in the not-for-profit sector, read the full Grant Thornton report. You can also find other useful not-for-profit information and resources on their website.