We recently asked some of our NFP colleagues about the challenges facing non-profits at the moment. In this blog post, we will explore some of the key challenges faced by charities and NFPs in New Zealand and discuss potential solutions to support them in overcoming these obstacles, though frankly, little will be a surprise to those of the sector!
We are preaching to the converted when we suggest that charities and other not-for-profit organizations (NFPs) play a vital role in New Zealand society, providing a wide range of services to those in need. However, there are numerous challenges that can hinder their ability to fulfill their missions effectively.
- Funding
The various sources of funding, – government grants, donations, and fundraising activities and the like – can be unpredictable and difficult to secure, making it challenging to plan for the future and deliver consistent services. Being a registered charity or incorporated charitable trust does not open the funding floodgates!
To address the funding challenge, NFPs can, and indeed must, diversify their funding sources. They can perhaps explore partnerships with businesses, apply for grants from foundations or trusts (being a registered charity or incorporated charitable trust does not open the funding floodgates and applications take time and dedicated effort) and develop sustainable fundraising strategies such as recurring donations or crowdfunding campaigns. Building relationships with individual donors and creating a strong case for support can also help attract consistent funding. Additionally, collaborating with other organizations or forming consortiums may enable NFPs to access larger funding opportunities and share resources.
- Volunteer Recruitment and Retention
NFPs – especially smaller ones – heavily rely on volunteers to deliver their services, but recruiting and retaining volunteers can be challenging due to time constraints, lack of skills and experience, low pay or no pay, and a lack of recognition.
a. Volunteer Engagement: Develop comprehensive volunteer recruitment and management programs that include clear job descriptions, flexible scheduling options, and opportunities for skill development and training. Creating a positive and inclusive volunteer culture that recognizes and appreciates their contributions can help increase volunteer retention.
b. Partnerships: Collaborate with local businesses, schools, and universities to establish volunteer programs and engage potential volunteers from these institutions. Building strategic partnerships can create a pipeline of volunteers and provide access to specific skill sets.
c. Recognition and Rewards: Implement recognition programs to acknowledge the efforts of volunteers, such as volunteer appreciation events, certificates, or awards. Recognizing volunteers publicly through social media or newsletters can also increase their sense of belonging and motivation.
- Governance
NFPs must comply with governance requirements, including having a board of trustees, management committee or directors (depending on the constitution, rules, or deed), holding annual general meetings, maintaining financial records, and complying with charity registration requirements and other legislation. Meeting these obligations can be time-consuming and expensive and can appear to detract from the principal purpose for which the organization has been founded. However, neglect of the principles of good governance will probably greatly hinder the NFP’s work.
Recruiting board members with the appropriate knowledge, aptitude and skills is an important factor in meeting appropriate levels of governance. Many join boards with a genuine desire to help, but lack the necessary skills.
To address governance challenges, NFPs can consider the following:
a. Board Development: Ensure board members have the necessary skills and expertise to fulfill their roles effectively. Provide ongoing training and support to enhance their governance knowledge and capabilities. There are many good websites with resources that can help and various training opportunities by seminars, workshops and on-line webinars. Many are inexpensive or free. Check opportunities on this webpage.
b. Streamlined Processes: Invest in technology solutions or software that automate administrative tasks such as record-keeping, financial reporting, and compliance tracking. This can reduce the time and effort required for governance-related activities.
c. Collaboration: Share best practices and resources with other NFPs, fostering a collaborative environment to learn from each other’s experiences. This can help streamline governance processes and reduce individual organizational burdens. Unfortunately, since the advent of Covid, opportunities for face to face workshops and networking are reduced but organizations such as AuSAE and FINZ still run them for members, and often non-members can attend.
- Technology
NFPs need to effectively utilize technology to operate efficiently, but access to, and implementation of, technology can be challenging due to limited resources and technical expertise.
Some outline strategies to address technology challenges:
a. Technology Planning: Develop a technology plan that aligns with the organization’s goals and objectives. Prioritize technology investments based on their potential impact and return on investment. VEGA offer a comprehensive software package. BoardPro can streamline board management. Many software applications offer free or greatly reduced prices for small NFPs (eg ZOHO) although implementation can be a little difficult and a consultant such as OnionCRM can assist.
b. Training and Support: Provide staff and volunteers with training and support to enhance their technological skills. Partnering with technology professionals or organizations that offer pro bono services can also help bridge the knowledge gap. TECHSOUP, for example, offers software, hardware and training at greatly reduced costs to qualified NFPs.
c. Collaboration and Knowledge Sharing: Participate in networks or associations specific to the NFP sector that provide opportunities for sharing technology insights and best practices. This collaboration can help NFPs stay informed about emerging technologies and leverage shared resources.
Conclusion
Charities and not-for-profit organizations face significant challenges in New Zealand. Despite these obstacles, these organizations are indispensable to society, providing essential services and support to those in need. By implementing solutions such as diversifying funding sources, developing comprehensive volunteer recruitment and management programs, streamlining governance processes, and adopting appropriate technology solutions, we can empower charities and NFPs to overcome these challenges and continue their vital contributions to the well-being of communities and individuals throughout New Zealand.
This article was originally published in May 2023