Business as usual isnt a viable strategy for NFPs

Why “business as usual” is not a viable strategy for NFP’s

A seismic shift is occurring in the environment the not-for-profit sector operates in and the trends are so dramatic that it precludes “business as usual” as a strategy. How do we navigate these emerging megatrends? 

As a not-for-profit CEO, you know that we work in a sector that is undergoing massive change. And this pace of change is seemingly increasing in a unrelenting manner.

This change paradym adds an additional layer to the volatile, uncertain, complex and ambigious external environment that we have to do our strategic planning in. How do we navigage these trends and make better strategic choices? – this question is driving discussions in NFP Boards and Executive planning sessions.

It was great to take time out from our hectic day-to-day work to facilitate a session for CEOs, senior execs and board members looking at five of the key trends affecting how not-for-profits do business. And most importantly, what we can do about them.
The panel discussion featured Caroline Chernov (Executive Director, the ten20 Foundation), Penny Harrison (Director Volunteering, Australian Red Cross), Ross Wyatt (Managing Director, Think Impact), Sabina Curatolo (Director of Policy & Stakeholder Engagement, Impact Investment Australia) and Corrine Siddles (Principal Audit & Assurance, William Buck).  Each brought their expertise and insights as we looked at the these critical areas:

  • How catalytic philanthropy is developing collaboration
  • The rise and rise of impact-led design
  • The changing face of business-community partnership
  • Is impact investing the holy grail of sustainability
  • Building your integrated reporting infrastructure

There were so many highlights it is impossible to list them all. The  key message to emerge from the session was that “business as usual” was not a viable strategy for NFPs.
My personal reflections on some of the key themes were:

  • The need to develop collaboration rather than continuing to compete – the ten20 Foundation explored the lessons they were learning from their catalytic approach to supporting the development of Opportunity Child. One key lesson was that for the sector to thrive it needed to see itself as part of an eco-system or network that supported change and hence needed to collaborate with each other to bring about that change rather than compete for funding. For this to happen more effectively their view was that not only do NFPs have to change how they do business but they have to work with philanthropy and government to redefine how funding flows into the sector.
  • Impact-led design – this new approach merges the best of codesign, collaborative commissioning, evidence-based practice and impact measurement. It helps NFPs to move beyond just measuring their impact to justify existence and assists them to begin to reconfigure their services to create deeper impact. Think Impact has pioneered this new approach over the past few years and is now seeing interest growing across government, philanthropy and for purpose organisations who want to be more impact-led in their strategic decision making. Embedding this approach requires not only a change in thinking but will lead to a change in culture, leadership is required to drive this impact-led change.
  • The revolution in business-community partnering –  disappearing are the days when corporate partners will provide you with a small philanthropic donation or some unskilled volunteering time, now the focus of business is on using their skills, resources and technical expertise to work with community organisations to drive change at scale, this was the message from the Australian Red Cross. Backed by a host of examples including drones, blockchain, volunteering platforms and new approaches to giving they painted a vision of the future of business-community partnerships that was based on broader and deeper shared value. NFPS need to think more deeply about their partnerships with business based on developing share value.
  • Impact Investing is here to stay  – whilst not the holy grail of NFP sustainability it was evident that impact investing is now here to stay. The approach which blends financial and social return from the investment made is gathering pace with a raft of new investment vehicles and options emerging. The potential for impact investing includes and goes far beyond Social Impact Bonds which are now being piloted in most states and territories. Such is the interest from investors that new approaches are being developed regularly. The key takeaway was the need to upskill the NFP sector to take advantage of this new investment opportunity.
  • The future is more integrated reporting – another area identified where upskilling would be required is around integrated reporting. Proposed changes to current accounting standards/practice are critical first steps in introducing more transparency in NFP accounts and leading the way towards more integrated reporting that captures not only financial performance but social impact.

The key conclusion was that NFPs – CEOs, senior executives and Boards – needed a far more sophisticatd approach to strategic planning that assists in preparing organisations for the future they will face.

Kevin Robbie is a Director at Think Impact with over 25 years’ experience working in the for-purpose sector. He was previously Executive Director at Social Ventures Australia and CEO of United Way Australia. Think impact works with partners across business, government, philanthropy and the for-purpose sector to understand, communicate, and transform the social and environmental impact of their work. They provide strategic advice, consultancy and training services to support organisations from all sectors to improve their future readiness, solve complex problems and develop new solutions. For more information see www.thinkimpact.com.au