Preparing for the Future – Do or Die for Non-Profit Boards

| April 5, 2016

The world of not-for-profit organisations is changing dramatically. Head of Philanthropy and Social Capital at Koda Capital, David Knowles, shares his insights on what non-profits need to do to meet the challenges ahead and survive.

I am predicting many charities risk extinction if they fail to compete with new challengers and rising performance expectations.

Life for non-profits is changing rapidly, and in many ways dramatically. Non-profit boards face a future that looks nothing like the past – one in which they must deal with changes in government policy, increased regulation and accountability, rising costs, higher funder expectations, the need to prove impact, systemic change, tougher competition and the impact of digital disruption.

Non-profits increasingly have to contend with stronger for-profit competitors in sectors such as health, ageing and disability – so their performance is increasingly being measured against traditional ‘business’ deliverables. These organisations also risk being overtaken by agile start-up charities and social enterprises using technology and savvy marketing to engage donors with greater speed and efficiency. Now, more than ever, charities must be able to show their transparency, their strategy and the impact they are having.

Boards often spend too much time on internal issues and operational concerns. The future simply does not support the idea that non-profit board members can act as passive overseers.

In an increasingly competitive world, with government funding in decline and philanthropy unable to fill the gap, boards must step up and lead like never before. Standing still is not an option.

The most important task of a non-profit board is to prepare its organisation for the future. Non-profit directors must embrace coming change and alter the way they work, in order to ensure their organisation is ready to meet the challenge ahead. Broadly speaking, this involves:

  1. Forward thinking – spending more time looking at the world outside the organisation to understand what the organisation needs to do to remain relevant and achieve its mission.
  2. Aligning people and practices – ensuring the organisation is ready and able to deal with a very different set of challenges and opportunities.
  3. Creating a platform for engagement – building the organisation’s ability to effectively engage with funders and stakeholders in an increasingly connected world.

The recent questions around the operation of the Shane Warne Foundation were an example of the new governance standards expected from Australian charities. Non-profits must be transparent and able to respond quickly and effectively to public scrutiny. The Shane Warne Foundation shows us that even strong brands can be destroyed overnight when they fail to meet expectations.

Non-profit leaders also need to be more forward-thinking and active in preparing their organisations for a future in which they will need to be highly competitive, transparent and better equipped to effectively engage would-be supporters.

In the digital era, it is possible for organisations to come out of nowhere and quickly compete for donations and supporters as they have lower costs and the latest digital engagement strategies. These nimble start-ups can eclipse more established non-profits and disrupt the entire sector.

Technology is perhaps the primary agent of change. Digitising non-profits so that they are able to take advantage of the seemingly limitless applications offered by technology is a very high priority, and one upon which a non-profit’s future ability to effectively engage with supporters may well rest.

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