Directors Blueprint for Not-for-Profit Sector Growth

Five year government funding cycles and the freedom to have a voice in public debate for government-funded not-for-profit organisations and their boards are vital to the future of the charity sector, according to the national directors peak body.

The Australian Institute of Company Directors released on Tuesday what it called a “blueprint for the nation’s future”, including specific recommendations to assist the not-for-profit sector.

The AICD said The Governance of a Nation: A Blueprint for Growth 2017 report aimed to help improve economic and social outcomes for Australians.

The blueprint recommended ensuring strong advocacy from the sector, improving the funding environment to support good governance, five year funding cycles, with 12 months’ notice of termination and outcomes-focused reporting, with a “report once, use often” approach through the charity regulator, the ACNC.

The AICD was also a supporter of the sector’s #fixfundraising campaign recommending improving the funding environment with national fundraising reform.

The blueprint called for investment in internal governance as well as capacity building as part of funding agreements, a “fit for purpose” regulatory environment, a new simplified reporting framework for NFPs along with greater access to aggregate government data to support NFPs important work.

AICD general manager of advocacy Louise Petschler told Pro Bono News the blueprint was really “big picture” and pulled out six key areas where the AICD felt long-term reform action needed to taken.

“It’s a sign of how important we view our partnership with the not-for-profit sector and its role generally,” Petschler said.

“The starting point is how do we get more certainty in terms of funding cycles and avoid putting NFP directors in this zone of potential insolvency that comes from the chopping and changing and the damage that does to being able to bring long-term governance thinking around the board table.

“We also need to make sure that funded NFPs can invest some of that funding in their own capabilities… so funding agreements should allow for a reasonable and appropriate amounts of funding to be dedicated to that governance capacity building and expertise building internally.”

The AICD said it definitely saw freedom of voice in public debate for government funded NFPs and their boards as a really important contributor to an effective and strong civil society.

“We talk about this in the blueprint as a partnership approach,” Petschler said.

“You can’t have a genuine partnership approach unless you respect the views of all around the table. So we should respect the views and advocacy that not-for-profit organisations will have and bring forward and allow that to be heard.

“For us this is all part of the same puzzle. We absolutely understand that there will be limitations on using taxpayer funding being used to run campaigns against particular political candidates for example. We are talking about freedom of voice in the general sense where you are talking about the issues central to the cause of the not-for-profit organisation.

“We will see the sector coalition, which we are a part of, having more and more individual voices continuing to press that message [of reform].”

Petschler said it as a complex reform because it involved state, territories and federal decision making.

“We don’t pretend it is going to be easy. We would certainly be pleased to see a stronger consensus politically and that’s what we are working towards with our NFP coalition partners. It really makes sense because we are wasting millions of dollars in tying up fundraising bodies in red tape that is largely pointless if you look at how it is enforced,” she said.

“We could have a much better system that better protects a community’s interest and allows a simpler, more streamlined framework for NFP organisations.

“We are definitely seeing some traction. But we are going to have to continue to take this case up. We have to get it higher on the [political] priority list and we have the complexities of the federal system to work with [as well].”

The AICD NFP leader Phil Butler told Pro Bono News: “The AICD heard loud and clear from the 2016 Not for Profit Governance Performance study that one of the top priorities that NFPs wanted government to do was to have a more partnership approach, working more collaboratively between government and the NFP sector on the big issues that are facing society.

“So we have got to change the approach that has perhaps existed for many years and not being a master servant relationship… it is a true partnership approach that is going to make a difference in these really complex issues that we are dealing with in the sector.

“I think it is really how high up on the priority order is it for governments and that’s perhaps where we have to keep chipping away at it, saying it may not be your top priority but it needs to be a priority because otherwise nothing will occur and we will be left with a 19th or indeed a 20th century set of legislation for fundraising.”

A not-for-profit forum will take place in Melbourne on Wednesday 5 April to discuss the current fundraising regulation. The Victorian Minister for Consumer Affairs Marlene Kairouz will attend and the federal shadow minister for charities Andrew Leigh will also take part in a forum.

Find out more here.