By NFP Resource Editor (acknowledging search assistance from Perplexity AI)
As we enter 2025, charities and non-profit organisations in New Zealand are facing a number of significant challenges. These are little changed from problems we discussed in May 2023 but we thought that at the start of a new year we would take a fresh look at the subject using the research capabilities of AI to delve a little deeper than a standard web search. A detailed look at the subject has been undertaken by Neil Lynch, Senior Product Marketing Manager, Oracle NetSuite.
The major challenges can be summarised thus:
Funding Constraints
The financial landscape for charities in New Zealand is increasingly difficult. Many organisations are experiencing:
- Reduced funding from traditional sources, including government grants and contracts[1][6]
- Increased demand for services, particularly in areas like food assistance[1]
- Competition for limited resources due to the growing number of non-profit organisations[8]
These funding issues are compounded by the ongoing cost of living crisis, making it harder for individuals to donate.
Competition
With over 28,000 registered charities in New Zealand, plus a number of other non-profits, there is inevitable overlap and duplication along with competition for resources such as limited funding and recruiting skilled personnel to the workforce or board. NFPs can find themselves competing with other organisations providing similar services or working in similar areas. There is an inherent reluctance to engage in partnerships, mergers, or joint ventures.
Staffing and Volunteer Challenges
Non-profits are struggling with:
- Recruiting and retaining skilled professionals due to limited financial resources
- Attracting and motivating qualified and experienced board members
- Difficulty in competing with private sector salaries and benefits
- High turnover rates among staff and volunteers
There’s a growing recognition that relying solely on passion for the cause (“aroha”) is insufficient to sustain the workforce.
Technological Limitations
Many charities are grappling with:
- Outdated software and technology infrastructure
- Lack of resources to invest in new digital tools and platforms
- Difficulties in measuring and demonstrating impact due to inadequate data management systems
Operational Challenges
Charities are also facing:
- Increased administrative burdens, including annual reapplications for grants and contracts
- Adapting to remote service delivery in the post-pandemic era
- Navigating complex regulatory environments and governance requirements
Proposed Solutions
To address these challenges, several initiatives and recommendations have been put forward:
- Exploring wider salary sacrifice schemes to improve staff retention and attract talent
- Diversifying funding sources, including partnerships with businesses and sustainable fundraising strategies
- Investing in cloud-based platforms and mobile-friendly technologies to improve efficiency and donor engagement
- Collaborating with other organisations to share resources and access larger funding opportunities
As the charitable sector in New Zealand navigates these challenges, it’s clear that innovative approaches and systemic changes will be necessary to ensure the sustainability and effectiveness of these vital organisations in 2025 and beyond.
Other References:
- It’s Time to Support the Charities That Support You – Digital Future Aotearoa
- The Law and Practice of Charities in New Zealand – Author(s) : K Lord , Susan Barker , M Gousmett
- Media Release: We need more than aroha to sustain our not-for-profits – Community Governance
- Not-for-profit boards – Institute of Directors New Zealand
- Governance Issues affecting Charities in Financial Year 2025 – Convene
- New Zealand’s Charity Sector Needs a Good Shake-Up. Here’s Why – Eric Chuah (Linkedin)