NFPs Urged to Focus on Purpose

Not for profits need to do a better job focusing on their purpose, in order to effectively measure outcomes and communicate achievements to stakeholders, leading social sector voices say.

The NonProfit Alliance (NPA) hosted a leadership panel event in Sydney on 2 August, to discuss what lay ahead for the social sector, and where attention should be focused.

Panellist Phil Butler, the NFP sector leader at the Australian Institute of Company Directors (AICD), spoke to Pro Bono News following the event and said his biggest takeaway was that NFPs needed to improve the way they handled their purpose.

“If organisations do a better job of focusing on what their purpose is and what they are really trying to achieve, what will often come up is ideas about how they can measure their progress in achieving that purpose,” Butler said.

“But NFPs shouldn’t get too hung up on it, in terms of trying to get perfect measures. They should stay focused on what is the purpose of the organisation and how they’re going to go about achieving that.

“And then NFPs need to be very good at communicating the purpose’s achievement with a very broad range of stakeholders.”

Butler said he – along with fellow panellists David Crosbie (Community Council for Australia), Kristy Muir (The Centre for Social Impact) and Sarah Davies (Philanthropy Australia) – believed the sector sometimes undersold its importance to society.

“As a society we don’t exist without an appropriately functioning NFP sector. I think there was general agreement within the room about the sector’s critically important nature,” he said.

“There was also recognition that sometimes the sector itself wasn’t particularly good at selling its own message about its importance to Australian society. This is an area we can probably improve in.”

The NPA event, an annual occurrence on thought leadership for the sector, also discussed the importance of impact measurement, while noting its difficulty for smaller NFPs.

“There was a lot of discussion about the achievement of outcomes and the importance – but also the challenge – of appropriately measuring and reporting on outcomes whether this be to government funders or philanthropists or other stakeholders,” Butler said.

“We recognised though that the NFP sector often does find it difficult to measure on these outcomes, particularly for smaller NFPs, who don’t have the resources necessarily to measure those outcomes appropriately.

“Some of the panelists spoke about some of the tools being developed in that regard, and noted there’s more work occurring in this area.”

Butler said culture was another important focus for sector leaders, which comes as a recent AICD survey revealed NFP directors in 2018 were more actively engaged in monitoring, measuring and leading culture in their organisations.

“As I think Drucker said, ‘culture eats strategy for breakfast’,” he said.

“My observation is you need to monitor, lead and measure culture but there is no one size fits all approach.

“It is going to be different in each organisation and certainly the size and type of organisation will help decide which way it is done.”