Article:

Takeaways from the 2018 Not-For-Profit Financial Leadership Summit

20 December 2018

Recently I attended the Akolade Not-For-Profit (NFP) Financial Leadership Summit at Mercure hotel Sydney. This was BDO’s first time co-sponsoring and presenting at this event. The conference was comprehensive, and attended by a diverse and remarkable group of leaders from NFP organisation from across the country. The presenters provided some fascinating insights into their organisation and shared their experiences, challenges and opportunities in a sector that continues to grow and change.

What was covered?

The following key themes were covered over 2 days:

  • Balancing commerciality and organisation purpose
  • Embedding strong commercial models and operational excellence
  • Learnings from a merger of compatible organisations
  • Achieving sustainability by sharing resources and collaborating
  • Strategy to shift away from reliance on government funding
  • Creating and sustaining successful corporate partnerships
  • Measuring social impact  

We heard fascinating presentations and discussions from some of Australia’s highest profile charities such as CareFlight, Endeavour Foundation, Campbell Page and Ronald McDonald House. From these discussions I gained a deeper understanding of how these organisations have defined their purpose and developed their strategy to deliver on this purpose. They have all formed partnerships with their communities, corporates and governments to meet their objectives. Partnerships are a strong theme and a key tactic to drive increased value.

Innovation is key

A key takeaway was that NFP’s must look to innovate to be successful in a competitive environment. While technology is part of the solution, NFP’s still have to ensure they adhere to their core mission to be successful. One way to achieve this is through investing and focusing on people. The conference provided many examples of how NFP’s are coming together to collaborate and harness the skills that reside in their people.

NFP’s must understand what influences their workplace culture and how to embed change management into their organisation’s DNA. We heard that the value of Human Capital, lies in assessing culture and working on different programs to help organisations improve their ability to implement innovative solutions, to rapidly changing NFP regulations and market conditions.

Success in an NDIS environment

There was also discussion around the introduction of the National Disability Insurance Scheme (NDIS) and its impact on NFPs, as a once-in-a-generation change to the disability sector. The NDIS shifts purchasing power from the service provider, putting the money and decision-making capability in the hands of the consumer. The introduction of the NDIS to the sector has had an amazing impact on people’s lives, however it has not been without its risks and challenges to NFPs. Providers need to learn how to thrive and adapt in a more commercial landscape. While it will take several years for the scheme to be fully implemented, the faster organisations adapt to new processes and invest in the right technology – the more likely they will survive and thrive.

How will new accounting standards impact NFPs?

For the accountants in the room, we also had an interesting presentation by BDO’s IFRS Advisory leader Aletta Boshoff. Aletta discussed the first time adoption of AASB1058 Income of not-for-profit entities, AASB15 Revenue from contracts with customers and AASB 16 Leases and the potential business problems this creates for the NFP sector.

Key considerations are:

  • the impact on profit in the year of implementation and thereafter
  • effects on funding agreements, financial covenants and remuneration structures
  • changes in balance sheet position
  • the need to update budgets and forecasts for the timing of revenue. 

I look forward to continuing to discuss these trends with my NFP clients and seeing what further advances can be made in the coming year. If you have any questions about any of the above please feel free to email me at kieran.gould@BDO.com.au