Perpetual Private NFP governance: What the research is telling us Presented by Andrew Thomas General Manager, Philanthropy February / March 2013

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19 Perpetual Private NFP governance: What the research is telling us Presented by Andrew Thomas General Manager, Philanthropy February / March 2013

20 AGENDA Research insights: Overview of leadership and fundraising study by Dr Wendy Scaife Perpetual s 2012 Charitable NFP Directors survey Implications and actions Perpetual s philanthropy and trustee services are provided by Perpetual Trustee Company Limited (PTCo), ABN , AFSL This presentation has been prepared by PTCo. This is general information only and is not intended to provide you with advice or take into account your objectives, financial situation or needs. 20

21 Differences between governance of nfp organisations and fp organisations No discernable differences 1 >60% of NFP directors believe NFP governance is weaker than FP governance 2 IT DEPENDS ON WHO YOU ASK? AICD members NFP director 21 1 ACID 2012 Directors Social Impact Study 2 Perpetual s 2012 Charitable NFP Directors survey

22 Three most prominent issues for nfp boards in the next 12 to 24 months Sustainable business model Understanding and responding to ACNC changes Fundraising Source: Perpetual s 2012 Charitable NFP Directors survey 22

23 Dr Wendy Scaife Overview of leadership and fundraising study Australian Centre for Philanthropy and Nonprofit Studies, QUT First empirical look at Australian non profit leadership and management in terms of its understanding, management and participation in fundraising. What s working and what s not? Research scope included the views of Board members, CEOs and fundraising staff 23

24 Boards and ceos disagree (with fundraisers) that: Fundraising is a profession A Board needs at least one person with fundraising experience on the Board Board members should give, get, govern or get off Board leadership impacts fundraiser turnover 24

25 Fundraisers disagree (with boards / ceos) that: Boards fully understand the role of fundraising Donors are satisfied with the organisation s performance There is clear and regular donor communication (CEO also agreed with fundraisers here) The organisation regularly surveys its donors They are satisfied with current compensation, training and professional development and resources provided to undertake the fundraising role 25

26 Other telling facts to emerge from the data CEOS ARE OVERWHELMINGLY SEEN AS THEIR ORGANISATION S FUNDRAISING CHAMPIONS FUNDRAISING IS NOT MENTIONED AT RECRUITMENT TO THE BOARD FOR THE VAST MAJORITY OF BOARD MEMBERS NO BOARD MEMBER RESPONDENT RECEIVED ANY FUNDRAISING TRAINING WHEN THEY JOINED THE BOARD 26

27 Some implications from the research Communication breakdown Power differences Role ambiguity Early training and follow up Governance vs. Management Ethics Case for Board involvement Nominations Committees 27

28 Two actions to consider Exit interviews that probe any facets of organisational support that the departing fundraiser feels might be improved seem essential but in reality are probably rarely done If Australian Board members DID NO MORE after hearing about this study than ask their fundraiser/s how they might help more then a significant impact will have been made 28

29 Questions? 29

30 AICD Not-For-Profit Forum 27 February 2013 George Savvides Board Chair, World Vision Australia

31 Contents 1. My experience with World Vision 2. Key trends and issues for the NFP Sector in Australia 3. Governance reform in the NFP sector 4. Good governance principles 5. Alignment of organisation and mission is critical for good governance 6. Purpose-centred leadership realising the vision 7. Future considerations

32 My experience with World Vision 14 years A single player can never realise a vision on their own When the team connects to the organisation's purpose, they can realise a goal greater than they ever thought possible work becomes mission! The relationship factor is critical for leaders to motivate and engage the team Building trusting relationships with stakeholders is pivotal, particularly if the inherited organisation needs reforming Leaders who can inspire the team to take on the cause, tap into passion and emotion that unlocks energy, creativity and innovation and lifts the organisation to do what might seem impossible

33 NFP Trends in Australia Growth in income over last 7 years consistently above 5% p.a. NFP sector employs over 1 million Australians and sees over 6 million volunteers each year Approx. 600,000 entities in the NFP sector Total income around $100 billion, contributing over $43 billion to the economy ( over 4%) 30% government funded 30% service provision (not govt.) 30% philanthropy and fund raising This is a sector that is finding its voice, building its power and is willing to take on real reform This sector provides societal and community value, without which our quality of life would be materially damaged

34 Why is the NFP sector important? The economic influence of NFPs 2006/7 Million 2009/ /7 2009/10 estimate Sources: ABS, Australia Industry 2004/5, 2005/6, 2006/7, 2007/8, 2008/9, 2009/10 ABS, Australian National Accounts, Non-profit Institutions Satellite Account 1999/2000, 2006/7 * NFP 2009/10 estimated on average annual growth rate from 1999/2000 to 2006/7

35 Key issues in the NFP sector Attracting and keeping skilled staff and volunteers

36 WVA: Best practice governance Top down commitment to Board governance WORLD VISION AUSTRALIA Accredited with AusAID Board of directors PWC Transparency Awards for annual reports Adopted the ASX Best Practices Member of the Australian Council for International Development - compliance to Code of Conduct Peer Review and Local Interdependent Board Global and local governance via WV International partnership We should be careful not to smother the mission compliance, risk management, etc.

37 WVA response to NFP reforms Regulatory reform Tax reform Funding reform Responding to these changes and addressing the challenges in the NFP sector requires leaders to be adaptable and transformational

38 Ten principles that promote good governance Ensure there is clarity regarding responsibilities Have the right group of people on the Board Set the vision, mission and strategies Put in place an appropriate system of risk oversight Determine appropriate performance categories and indicators Enhance effectiveness through careful planning and management Ensure there is a good flow of information to the Board Enhance the capabilities of the organisation Set the tone for ethical and responsible decision making Help the organisation engage effectively with stakeholders AICD good governance principles for NFP organisations

39 Alignment of organisation and mission is critical for good governance especially NGOs Integrity in values to retain donor loyalty and protect reputation

40 Purpose and leadership Inspiration Leadership Integrity Authenticity Purpose Why we do our work: Purpose informs strategy. Purpose fuels passion and engagement. How we lead. Leader as Coach. Leader serves the team. It s not about having the right values; it s about living them! Self deception prevents leaders from getting the best results from the team. Australian charities are in a crisis of identity; how to be a purposedriven organisation. Professionalism is an enabler, Purpose is the mission.

41 The reason for our existence Purpose Discover Excellence The joy of technological innovation Masaru Ibuka The thrill of outstanding performance Warren Buffett Build a machine to improve the world Henry Ford Millions of people are better off Sam Walton Heroism Altruism Nikos Mourkogiannis 2009

42 Importance of purpose, vision and mission Mission We are a Christian relief, development and advocacy organisation that seeks to transform the lives of children and communities by tackling the causes of poverty. Vision Our vision for every child, life in all its fullness; Our prayer for every heart, the will to make it so. Great leaders inspire a compelling purpose a cause is born!

43 Leading a purpose-driven organisation Leader Role Strategic Priorities Consistency & Reliability Follow the $$$ Our Organisation s Mission Who are we? My Core Values Who am I? Alignment Source: Page 181 of Driven by Purpose

44 Future considerations Identity shapes what you do and how you do it. Ensure there is alignment between the identity and purpose of the organisation and its leadership. Great leaders formulate a compelling purpose. Boards are there to ensure sustainability and alignment to mission

45 QUESTIONS?

46 Panel George Savvides FAICD Chair, World Vision Australia Andrew Carter MAICD Chairman of the Board at Melbourne Citymission Melanie Raymond MAICD Chairman, Youth Projects Don McLardy, President of the Melbourne Football Club and Chairman of Reach

47 NFP Reporting Breakfast Tuesday 23 April, 7.15am 9.00am, Melbourne CBD Directing in the sporting arena Thursday 6 June, 5.30pm 7.30pm, Melbourne CBD Social Media Thursday 1 August, 5.30pm 7.30pm, Melbourne CBD