Perpetual Throws Out A Challenge for NFPs and Funders

The Perpetual Foundation wants to develop a philanthropic ‘filter’ for Not for Profits and funders to improve their governance overall and professional partnerships – throwing out a challenge to both sides to do better.

The challenge follows the release of a critical research report by Perpetual Foundation that found the Third sector has wasted resources, underdeveloped accountability and poor governance.

The research involved more than 1000 study recipients across Australia and the head of the Perpetual Foundation, Catherine Baldwin says it was commissioned to gain insights into the drivers of leadership and management in the social economy and how this might be used to help the sector build its skills and capabilities.

Catherine Baldwin says the findings will change the way Perpetual Foundation funds projects in terms of wanting Not for Profits to clearly articulate their strategies and planned outcomes.

Baldwin says that of particular relevance is the underdeveloped practice and standards of governance in the sector. Governance is profoundly important in that it touches on questions such as "What is our mission and strategy?", "How do we define and measure success?", "What is the right board composition to help us deliver success?", and "What do we do if we fail?"

She says Perpetual’s observation is that Boards must answer these questions if they want to convince donors that they are making a positive impact in an efficient way and good governance is especially important in the social sector, which is characterised by complexity and resource constraints.

Baldwin says Perpetual does not have all the answers yet but that is the challenge she has set for Perpetual and other funders is to do everything to support the sector to address these issues. In particular in looking for co-operation and collaboration

She says firstly there’s a need to look at administration and fundraising costs so that they are transparent and secondly to make a contribution to professional development in the sector.

She says Perpetual wants to turn the relationship between NFPs and funders from the feel-good to the professional partnership and to put governance on the table for everyone to address.

Baldwin says if Perpetual is prepared to beat the drum for better governance then it can’t not back it up with funding. Perpetual is considering financial support for educational tools for Not for Profits.

She says Perpetual has a good track record as a good and generous funder with the weight of funding dollars behind it. As such it wants to take a leadership role without the need for a formal structure.

She says through forums and roundtables with Philanthropy Australia, other trust companies and corporate foundations, Perpetual would seek to influence by demonstrating consistency in applications on basic principles and what perpetual is prepared to fund.

For the Not for Profits new Perpetual Foundation funding guidelines would come into play for 2009.

Baldwin says rather than slowing down applications the aim and challenge is to streamline the process and achieve a better understanding of what is required.

In particular, Perpetual will be looking for long term funding partnerships and the end to the ‘one-off trophy’ style of funding.

She says the guidelines would offer clear and simple criteria.

The issues of leadership and management were also highlighted in the report with strong criticism levelled at Not for Profit Boards.

Baldwin says Perpetual has the opportunity to showcase good models for boards, the selection process, performance measures and the CEO relationship, how to deal with egos for example and how to reap the benefits.

She says this research is timely in that it has identified the key drivers and issues that can now serve as a basis for further meaningful dialogue amongst all participants in the Social Economy.

She says Perpetual invites all those who share an interest in the future of this sector to use this research report to advance our understanding and appreciation of it and hence better influence that future.