15/01/2010 - 00:00

Glass-half-full outlook for NFPs

15/01/2010 - 00:00

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MANY local businesses struggled to manage last year’s downturn and the not-for-profit sector was not immune to the economic challenges.

MANY local businesses struggled to manage last year’s downturn and the not-for-profit sector was not immune to the economic challenges.

While the global economic crisis presented significant difficulties for charities, benevolent institutions and other non-profit groups, it also provided opportunities for these organisations to reposition themselves strategically, renew business partnerships and explore different ways of delivering their services.

The NFP sector also experienced a raft of legislative and operational changes during 2009, with other developments likely to occur this year.

Meanwhile, part two of the Managing in a Downturn survey is due for release in February, examining the impact of the downturn on NFPs and the anticipated future effects during the next year.

The survey of more than 260 charities was a collaborative effort between the Centre for Social Impact, PricewaterhouseCoopers and the Fundraising Institute Australia.

The first part of the survey (undertaken in April-May 2009) found that, as a direct result of the GFC, three-quarters of NFPs took action in light of the deteriorating economic climate, with about 30 per cent implementing cost reduction measures.

One-third of respondents experienced a 10 per cent drop in income.

In mid-2009, however, the Australian Centre for Philanthropy and Nonprofit Studies (CPNS) found that some larger NFPs recorded an 86 per cent increase in contributions in 2009.

But the data was not representative of all charities, with the WA Deaf Society, for example, reporting to WA Business News in early 2009 that donations were down 70 per cent.

There were many other changes over the course of 2009, particularly with taxation developments, including: the name change of Private Prescribed Funds to Private Ancillary Funds; and the August release of the Australian Taxation Office’s Compliance Program 2009-10, which encouraged an estimated 190,000 non-profit organisations registered with the ATO to have high levels of voluntary compliance.

WA Community Foundation chief executive Andrew Carter said while the NFP sector endured a lot in the past 12 months, he was positive about the year ahead with his organisation in “pretty good shape”.

Mr Carter said the GFC highlighted the importance of recognising fiscal constraints in delivering services, and understanding the overall costs and impact to the organisation.

“Not for profits may want to provide a service but they have to recognise there are business fundamentals that underpin it,” he said.

The Smith Family chief executive Elaine Henry said although the organisation’s Christmas appeal fell 10 per cent short of its $4.5 million target, she remained cautiously optimistic about 2010.

Ms Henry said The Smith Family seized the opportunity during the downturn to consolidate and enhance the results of its volunteering force, creating a volunteer coordination unit, with coordinators based in each capital city, to streamline the process of taking on and managing its 6,500 volunteers.

St Vincent de Paul Society WA spokesperson Lucinda Ardagh said while the GFC was a worrying time, the state’s mining and resources sector helped to keep its funds steady, with the charity falling just short of some appeal targets.

“The society has seen the ups and downs of the boom, the effects of the global financial crisis and the rental crisis, and is now responding to the problems faced by those struggling to pay for increased utility costs and interest rate rises,” she said.

“[It] is optimistic about 2010 and hopes to continue to provide support to the marginalised where needed.

“We will continue to encourage people to volunteer ... encourage business leaders to progress with social responsibility, and we will encourage workplace giving within organisations.”

 

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