NFPs’ funding concerns increase: report

NFPs’ funding concerns increase: report

26 July 2016

The Not for Profit sector in New Zealand and Australia is now more concerned than ever about funding their operations, according to the latest Grant Thornton Not for Profit sector report.

Funding, sponsorships and donations were cited as a major concern for 33 per cent of NFPs surveyed on both sides of the Tasman.

“This figure has skyrocketed from 14 per cent in our 2013 survey. Fifty one percent of New Zealand and Australian participants also said that financing the activities of their organisations was a significant concern compared to 14 per cent in 2013,” says Barry Baker, Partner and Not for Profit industry specialist at Grant Thornton New Zealand.

“Over a third of all organisations surveyed can’t plan beyond a year under their current funding arrangements; New Zealand NFPs reported significantly greater difficulty sourcing regular and consistent sources of funding compared to their Australian counterparts.

“While potentially challenging for some, collaboration with other organisations ranging from sharing resources to merging and amalgamating is a good way to alleviate financial pressures, but it needs to happen with some urgency to ensure the survival of those organisations affected”, says Baker.

The number of respondents who have considered setting up a trading organisation or social enterprise remained constant (35 per cent), however, the approach has changed dramatically. In 2013, 86 per cent of survey participants considered setting up a new operation and 25 per cent thought about purchasing an existing business; in the latest report, these figures have dropped to 66 per cent and 20 per cent respectively.

“The focus for a lot of organisations – 9 per cent in 2013 and 59 percent in 2015 - has shifted to growing their current business; but to achieve the growth needed for survival, it’s vital for NFPs to understand the opportunities and benefits of collaborating with other like-minded organisations that share similar goals or visions, rather than competing for a limited pool of money.

“Collaboration fosters sharing of ideas and resources, and learning opportunities for all involved”.

“Another avenue of increasing fundraising that appears to be under-utilised by those surveyed is the director group. Over two thirds indicated they had independent directors, but only 11 per cent said that Board members are encouraged to donate or secure funds for their cause.

“Some organisations may find this option too challenging, but there’s still a lot of opportunity to generate more revenue by involving their directors more,” says Baker.

Grant Thornton’s report, The Challenge of Change, can be viewed here.

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