Governance - Get it right - the rest will flow
A Case Study
There have been a number of fundamental changes to the charitable sector in Australia in the past few years – the GFC, the role and growth of major gift philanthropists, changes in government policy regarding funding of charities and the development of social venture capital as a funding source. These factors have meant that charities have had to take a more pragmatic measurable approach to the effectiveness of their mission, they have had to introduce transparency in their financial reporting and their governance framework whilst retaining the passion of supporters. Here is a case study of an organisation going through that journey.
The organisation uniquely had 41 internal foundations whose objectives were to increase the resources of the organisation to support identified areas of research, education and scholarship. Each had its own constitution, board, staff and passionate donors, many of whom were prominent members of the Sydney community. My role was to strategically implement a standard governance model, ensure compliance with legal and governance principles and ensure that those valuable relationships were not lost in the change process.
As I began the role the GFC struck – just to add to the general unease and uncertainty of the future of fundraising in the organisation. But between 2009 and 2013, the number of foundations was reduced to 23 and the results show that the income from these groups almost doubled – $16M to $32M.
What does good governance have to do with this scenario? By updating and standardising the rules governing each foundation it was easier for financial and legal obligations to be measured and complied with. Introducing fixed terms for council members and nominations committees, council members addressed the vexed issues of sustainability of their foundation, what were the skills and networks they needed to have, how do you ask people to step down, how do you attract foundation members with the same calibre of leadership as those past, should we continue in our current form, can we survive and how do we change with the overarching strategy of the parent institution?
Advocating those issues, their implementation, the politics involved, the constant conversations, the many stakeholders who need to be consulted and the influencing of those who made final decisions made the role challenging and the outcome to date worthwhile. And what remains continues to reflect the history of the organisation, its place in the community and the passion of its many donors and supporters.
Whilst many charities are undertaking changes at a board level, Australian charities still need to consider the sharing of backroom services and transparency around the costs of running the charity as well as the value they add to their community. There are currently 60,757 registered charities on the ACNC Register, each with its own infrastructure, staff, board, auditor and fundraising programs. A conversation about strategic approaches to the resourcing of Australian charities, taking into consideration the balance between passion and the pragmatic, needs to be started if Australia’s philanthropic/community support sector is to continue to effectively and compassionately deliver to those causes and people it supports.
