Financially, which way ought you go from here?

“Would you tell me please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the cat. “I don’t much care where…” Said Alice. “Then it doesn’t matter which way you go,” said the cat. – Lewis Carroll, Alice in Wonderland

Your organisation is in a current position. It has a certain level of revenue, a certain number of employees and makes a certain impact.

From a financial perspective you need to know where you ought to go from here. Asking this question allows the following:

  • It forces key stakeholders to consider the future of the organisation
  • Multiple parties can be brought into an overall vision, including board members and third-party stakeholders
  • Realistic operational and strategic goals can be set
  • Potential pitfalls can be identified before they happen
  • An actionable road map for the organisation can be developed

As we move into 2020, the question arises, financially, which way ought you go from here?

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Do you feel that you are paid fairly for your job?

The topic of salaries in not for profit organisations is a sensitive one. To a certain extent, we’ve shot ourselves in the foot with some of our messaging about ‘every cent you donate’ going to the cause, creating an expectation that employees in the not for profit sector should work for the love of it, rather than drawing a market wage.

The truth of it is that we are dealing with some of society’s most complex issues and it takes skill, experience, perseverance and long hours to lead and manage organisations that deliver social impact, meet stakeholder expectations and generate sufficient profit to keep your organisation afloat, and to invest in the necessities of new technologies and innovations. The move to consumer-directed care models in aged and disability services has pushed the sector further towards commercial business models, broadening the range of skills and experience needed to operate effectively.

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Higher NDIS prices for providers

In July 2019, the NDIA introduced the Temporary Transformation Payment (TTP) for providers of Assistance with Daily Living and Community Participation. The payment is only available to registered providers and is conditional to a set of obligations. The increase was welcomed by providers who continue to struggle financially with the administrative burden of the NDIS and the introduction of the Quality and Safeguard regulations and the associated compliance and audit requirements.

In a national survey among 381 disability service providers, 76% of organisations stated that they are worried that they won’t be able to provide NDIS services at current prices (NDS 2019). The TTP payment is set at 7.5% above the base price, however given the previous Temporary Support for Overheads of 2.5% was removed, it is merely a 5% incentive and this will reduce by 1.5% each year.

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Three financial ratios to instantly assess your organisation’s health

When analysing your organisation’s financials it can be easy to get caught up in an array of numbers and hard to know the financial health of your organisation. Key financial ratios can help you focus in on particular financial areas and highlight any potential risks that may be present.

The three ratios below highlight keys areas that all organisations should know and monitor. These three ratios and categories help indicate the financial status of an organisation and can be used to very quickly assess financial health.

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Rebranding? Know before you go

You might think about changing your brand name or logo for many reasons. Perhaps your logo is looking a little tired, or your organisation’s name no longer reflects the value you offer or the market you service.

Changing your brand is exciting – it’s also a lot of work! Executed poorly, a rebrand may have little effect or even worse, send your organisation backwards… Done well, and supported by a solid strategy, renewing or refreshing your brand can be just the trick to drive your mission forward.

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Ageism and our lack of respect

The Aged Care Royal Commission’s interim report makes for difficult reading. Its single word title “neglect” is, in itself, a smack in the face for anyone who cares about how we treat older people, which should be all of us.

The interim report outlines the following key issues:

  • Difficulties in navigating the system – once older people reach the stage of needing formal care (beyond support which can be provided by family and friends) they are thrust into a system of applications and assessments, which commoditise them into a care package and are largely conducted by phone and internet
  • Whilst home care is often the preferred option for older people, and can maintain their independence for longer, significant waiting times for home care packages are putting many people at risk and increasing the pressure on family and other informal carers
  • Substandard care is all too common in residential aged care, with ‘thoughtless acts’ that “when repeated day after day, become unkindness and often cruelty. This is how ‘care’ becomes ‘neglect’.”

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Strategy can’t be created in a vacuum

There have been radical changes to the way in which community services are funded in recent years. It’s not as simple as the money just coming from a different place, the changes have completely transformed the business model for many organisations, particularly in areas such as aged care and disability, where purchasing decisions are now made by consumers, not commissioners. This comes alongside other changes in the way that people engage with causes, organisations and work; and rapidly developing technologies and stakeholder expectations of how organisations use technology to engage and deliver services. All this means that, even if you haven’t had a major change in your business model, your organisation is still going to be impacted by a changing external context.

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Key person risk – Is your organisation vulnerable?

If your business depends on you, you don’t own a business – you have a job. And it’s the worst job in the world because you’re working for a lunatic!
– Michael E. Gerber

Organisations can live forever, but people cannot. In the UK, the oldest not for profit organisation is said to be King’s School, Cantebury which was established more than 1400 years ago in 597.

There are many factors that contribute to the longevity of an organisation and one of them is ensuring that key person risk is mitigated.

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The value of a logo

In previous issues of Foreword, we’ve looked at different aspects of marketing such as brand reputation, marketing strategies and social media marketing to name a few.

Whilst all of these things are important, how much thought have you given to your organisation’s logo? It’s one of the first things people notice when they’re looking for your organisation.

Next time you’re driving home or watching television, look at the logos you see in advertising. There’s many that you would instantly recognise; the famous golden arches of McDonald’s, the three diamonds of Mitsubishi and the colourful letters of Google. Your recall of the product or service they offer is almost instant. These are all good examples of a logo doing its job.

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NDIS update (from October 2019)

The NDIA announced a long list of changes and updates late last month. Here is an overview in case you have missed these:

New Price Guide and Support Catalogue valid from 1 October 2019


Disability-related health supports

The new NDIS Price Guide (version 1.2) introduces disability-related health supports as agreed by the COAG Disability Reform Council meeting in June. The NDIS will now fund health supports where the supports are a regular part of the participant’s daily life and result from the participant’s disability. Funded disability-related health supports include dysphagia supports, respiratory supports, nutrition supports, diabetic management supports, continence supports, wound and pressure care supports, podiatry and foot care supports and epilepsy supports. More information about these supports can be found in the Price Guide (page 20).

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