Profit or not, community sector pulls its weight

TasCOSS CEO Kym Goodes said a new study into the governance and performance of not-for-profits shows that the sector delivers positive outcomes through well governed organisations.

The Australian Institute of Company Directors (AICD) report1 states the NFP sector is well governed, achieves outstanding results, and has continued to evolve in its 200 year history.

“These organisations are often highly sophisticated, efficient and well-governed organisations—they not only achieve mission success and financial strength but often do so in complex environments,” said Ms Goodes.

However, the AICD study also highlighted that over a quarter of directors believe their NFP should make a profit of three per cent or less—which in real terms means no growth at all.

“Some directors surveyed were concerned that being seen to be ‘too successful’ would result in reductions to funding or donations,” said Ms Goodes.

“Many of our members see a considerable cash flow throughout the financial year – the only difference between the financial position of our members and corporate companies is that our members are reinvesting in the services that continue to help the lives of their stakeholders.

“The community sector is the back bone of our society and despite the overwhelmingly positive outcomes, we do need the government to assist our organisations in reaching their potential.”

AICD Not-for-Profit Sector Leader Phil Butler said the report showed how good governance, government support and financial strength can shape not-for-profit organisations for the better.

“If not-for-profits are only breaking even, it actually means their ability to deliver crucial services that benefit Tasmanians will shrink moving forward,” said Mr Butler.

“The report also highlights the need for a conversation with government about removing archaic fundraising practices that restrict their ability to deliver for Australians and achieve good governance.”

A coalition of peak bodies, including the AICD and ACOSS, has also called for a nationally consistent fundraising regime to be introduced, in place of competing and outdated state and territory regimes. A nationally consistent fundraising regime would deliver more than $15 million in savings every year for charities alone.

TasCOSS is the peak body for the community sector in Tasmania.
Kym Goodes, CEO, TasCOSS