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Nonprofit sustainability is the responsibility of leadership
Money in the bank does not mean that your organisation will be sustainable. A strong sense of being mission-driven, measuring impact and sharing results is what leaders of nonprofits should strive to embed into the consciousness of everyone in the organisation:
This is how an organisation can shift the status quo from fretting over money to creating future plans.
Using the seven dimensions for nonprofit sustainability as a guideline, leaders can embrace these characteristics for determining board competencies and delegation of duties for oversight, good governance and quality performance that will ensure continuity.
The seven dimensions encompass the following: Legal good standing and compliance; organisational capacity and expertise to do the work; financial viability of the organisation; advocacy for the work undertaken that will make a difference; quality and professionalism of service provision; stable infrastructure and building a positive image brand.
Nearly 122 000 entities are registered with the Nonprofit Organisations (NPO) Directorate. More than 80 000 NPOs are non-compliant with only 19% of NPOs yearly financial statements and narrative reports verified*.
Does this indicate that a majority of elected or appointed board members of NPOs are blissfully unaware of their fiduciary duties and other responsibilities? Few board members work closely with fundraisers yet financial sustainability is unquestionably the responsibility of the board.
Human resource policies need to be interrogated by the board to ensure recruitment of employees remains equitable, fair and open. So-called operational matters such as these are often left to the executive and put on auto-pilot.
It is often stated by board members that projects are driven by experts: “We leave that work to the professionals and don’t interfere” – abdicating responsibilities and assuming everything is hunky-dory does not lead to sustainability. What are the Seven Dimensions for NPO Sustainability?
Legal good standing and compliance
This includes not only signing off audited financial statements but making sure that all fiduciary reporting deadlines are met, that all taxes are paid to SARS, that issuance of Section18A receipts to donors is done correctly, that amendments and changes to constitutions, trust deeds and memorandums of incorporations are done in accordance with statutory bodies.
Organisational capacity and expertise to do the work
This includes ensuring that a clearly defined vision, mission and set goals and targets have been defined in a medium to short-term strategy, and that the programmes and projects being undertaken by employees are professional and that adequate resources are in place. Dedicated staff and committed volunteers including board members have written ‘contracts’ with duties (job descriptions). Technological know-how and access to broadband is a must.
Financial viability of the organisation and its programmes
A revenue plan with financial projections for a least two to three years should be in place and approved by the board. Such a plan will include diverse income sources and avoid reliance on a single or few streams – the plan needs to be balanced using a variety of fundraising techniques appropriate to programmes and the mission. Philanthropic gifts should be sought from individuals, trusts, foundations as well as tapping into corporate social investment as well as efforts to work with government departments.
Advocacy for the work undertaken to change the world
It is vital to interact with national and local government on policy making and to become a part of issue-based coalitions. Nonprofits should participate energetically in advocacy campaigns in order to lobby and reform social justice, or influence legislation that might affect the sector – such as B-BBEE score cards, public benefit taxation laws that enable or disable the work of the non-profit and to encourage ethical dealings.
Quality and professionalism of service provision
Focus on the greatest needs in your community and don’t proffer projects that are not necessarily going to change the status quo – you need to measure the impact being achieved and the effectiveness of services to beneficiaries, which will not be cut-back if there’s a funding crunch. Ideally other NPOs and government departments recognise your work and beneficiaries are even prepared to pay fees for your services. You confidently demonstrate a social return on investment.
Stable infrastructure and ownership of assets
Ensure that there’s adequate space and facilities with long-term investments such as endowment funds or a steady flow of membership fees to keep the organisation glued together. Form alliances; build strong relationships with local business and government, encourage co-optiveness and share lessons learned with other organisations and work with many to make a difference in communities or in the country. Make sure that your team members receive opportunities for upgrading their skills by attending training courses and can tap into new technology.
Building the brand and public image
Issue positive and regular media messages about your work, self- promote at forums, do public speaking stints and monitor public perceptions – if things don’t look positive then jump into action. It is always a good idea to have a communication strategy in place for both internal and external communication. Create solid relationships with the public, local newspapers, radio stations, social networks, schools, hospitals and the police and have a dynamic website that publishes news and uplifting results.
Leadership and the board have to pull this together if they want the organisation to really make a difference, change the world, eradicate poverty and demonstrate a social shift from good to great and sustainable whilst remaining true to their Mission.
*Source: DSD/NPO Directorate presentation at the NPO Collaboration and Dialogue Forum – 30 May 2014.