Friday, February 26, 2010

Not-For-Profit? Then what? Part One

Yesterday I had the good fortune to be involved in a forum, organised by Anglicare SA and Flinders University, that explored what the future might hold for Not-For-Profit organisations (from here on referred as NFPs). It was a day rich with perspective and discussion, including speakers with local, national and international experience.  People had the opportunity to consider where not-for-profit effort has come from, where it is now and where it might be in the future.

The themes were familiar, as you would expect if you have spent time within the NFP sector.  NFPs typically emerge through the efforts of one or more citizens, whose concern about an issue, together with a view about how things could be, invoke action.  That action is then formally organised, and the NFP entity is created.  In many communities there is a rich history of such endeavour.

As the NFP then goes about its business seeking to make a difference, it will also need to think about its own sustainability.  And therein lies a lifelong journey.  NFPs constantly have to wrestle with issues of sustainability, be it in terms of leadership momentum and renewal, knowledge capital, political change, technological advances, societal trends, systems compliance and, of course, money.

There is a lot to preoccupy your average NFP which is why yesterday's forum was so engaging.  The conversation was characterised by enthusiasm and anxiety, optimism and pessimism (and even fatalism), in fairly equal measures.

Maybe this is simply the nature of things for NFPs, where the very fact of impermanence demands an ongoing focus on dynamic balance and renewal.  Put more simply, if you stop peddling the bicycle, sooner or later you will fall off.

But if you focus too much on how the peddling is going, and whether the chain is adequately oiled, then you are in danger of not looking where you are going, which was why you got on the bicycle in the first place. The trap for every NFP, once it's formed, is that the ongoing need to think about issues of sustainability can result in the NFP taking its eye off the purpose it was set up in the first place.  For those NFPs in community service, this purpose is usually to deliver some kind of benefit to a target group of beneficiaries, be they local residents, people living with disability, people who are homeless, people with a particular health issue, people with a common interest, and so on.  However, there are many NFP organisations who are now involved in quite different activities to those they started out with, either because new opportunities presented themselves, or because of the need to deviate because of sustainability issues.  Such movement is not always purely in line with the original purpose of the organisation.

In these ways, the NFP can lose sight of its original passion and vision. Suddenly big is good, and bigger is better.  In pursuit of sustainability and scaling up, the view of the target beneficiary can be overlooked.  At which point the NFP has lost its mojo.

So let us remind ourselves that the reason why NFPs exist, particularly in community services, is to bring benefit to a particular section of our community or citizenry.  Therefore any question about a particular NFP's sustainability must be framed in the context of the needs and aspirations of that section, and NOT of the NFP itself.  Otherwise there is a danger that the NFP is looking after its own organisational needs at the expense of its target beneficiaries.  This is a perversion.

And to help with any confusion about who the beneficiaries are, the beneficiaries are those who are mentioned in the NFP's constitution, as part of the organisation's objects.  The reason why NFPs appear to be so called is because they do not exist to deliver a financial profit back to their stakeholders, but instead exist to deliver a benefit to the beneficiaries.

Not-For-Profit means For-Our-Beneficiaries. 

It must surely follow that if the NFP is to have any meaningful discussion about its sustainability, the beneficiaries need to be in the conversation, because their circumstances provide the context.

So in an otherwise engaging and successful day (with thanks again to Anglicare SA and Flinders University for a great effort), my one main recommendation for any similar forum in the future is that it ensure there are voices in the room from people who are the intended beneficiaries of NFP efforts.  The conversation will bear even richer fruit as a result.

Why did I start out this posting with a picture of nuns with guns?  Well, mainly because it's not often you see nuns with guns (or am I just not getting out enough?).  The picture also, in a strange way, echoes a sense of mission and determination, which seemed fitting for a blog posting about NFPs.

But it also got me thinking about how NFPs raise money (presumably not at gunpoint), and for what purpose if not profit?  Watch this space for 'Not-For-Profit? Then what? Part Two'.  

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