Profitable not for profits?

By Jane Arnott, General Manager, Consulting and Business Services

We recently held an ExecNet in Adelaide with the title of ‘Selling Without Selling Out’. The shift to fee for service funding – particularly in the NDIS and aged care environment – means that not for profits are having to engage with end consumers as the purchasing customer and to compete with each other for that customers’ dollar. The shift to a sales culture is hard for many as it is perceived to represent a departure from the core values of the sector. For staff working in not for profits, the reality of this change is evident all around them, but not for profit directors may have further to travel to get into a more commercial headspace.

The recently published AICD Not for Profit Governance and Performance Study: Raising the Bar revealed that many directors are still uncomfortable with the concept of their not for profit making a profit. Continue reading…

Fraud: How to reduce the risk for your NFP

Unfortunately, fraud occurs in not for profit organisations far too often. Many studies have demonstrated that fraud is real and devastating to those affected. Fraud can occur in any NFP organisation with the perpetrator being undetected for quite some time. Often the fraud is only detected following either a financial abnormality being identified, OR the perpetrator being careless through their own complacency.

Fraud can take many guises with the perpetrator often being the most innocuous person associated with the organisation. Yes, these are generalisations – but the point is that anyone could be committing a fraud within your organisation. Continue reading…

Social finance: Three things you need to be investment ready

By Jane Arnott, General Manager, Consulting and Business Services

At the recent Third Sector Expo, one of the speakers asked for a show of hands to demonstrate people’s level of understanding of social finance. Given that the delegates were all sector professionals, I’m not sure whether I should be surprised or not at their self-professed limited understanding of this space.

Social finance is the investment of funds to generate a social impact and a financial return. It’s the umbrella term for a range of approaches and models that have been developed in recent years as an alternative to traditional gift-based funding, where the intention is only to have a positive social impact. Paying back the original investment is the minimum, with varying levels of further return depending on the model and the investor. I think the gaps in knowledge in this space can be attributed to a number of factors: Continue reading…

Can your organisation pay its bills?

By Ron Yates, former Senior Financial Consultant

When reading reports, the key point for all organisations to be aware of is, are they trading legally or illegally, or in accounting terms, are they solvent or insolvent? Simply put, can your organisation pay its bills?

Recently I reviewed an organisation whose Board had not received a balance sheet for almost 9 months. The income statement appeared to demonstrate a positive position, one of improved performance and steady growth. What it did not show was what was happening in the “engine room”. Its cash had reduced to alarming levels and no one had bothered to advise the Board – it wasn’t their job, and to be fair, they did not know how to interpret reports, they simply produced them and distributed them. Continue reading…

Turning liabilities into assets

An asset is something you own and a liability is something you owe, so how can a liability ever be turned into a asset or profit?

Perhaps we should start by reviewing the following equations:

  • More assets than liabilities = profit
  • More liabilities than assets = loss
  • More income than expenses = profit
  • More expenses than income = loss

Continue reading…

Fresh eyes on funding – finding new income streams from previously uncharted waters

Funding changes across the sector are a constant concern and never more so than in an election year. While there is no quick fix to the bigger issues facing organisations, ample growth opportunities await those who dare to see things differently and act on this.

The four income streams available to NFPs come from donors, funders, purchasers and consumers. Going forward, the key questions that need to be asked are not just about which methods are suitable to your NFP, but how you approach each option to maximize funding. To assist in this process, we’ve identified five key areas for improving funding, along with some key questions to encourage solutions – by seeing things from a fresh perspective… Continue reading…

Innovative accounting – mission possible!

Accountants being innovative? When you stop laughing, keep reading…

In order to make a difference and put your added value to the end product, start thinking outside of the accounting square. Ask yourself, “What can I do to make this product better, more useful, friendlier?” In so many instances the answer is simple and at your fingertips, but somehow we just keep doing the same old routine. Why? Because that’s the way we have always done it.

This was the situation I encountered recently where the information being produced by a client organisation was just that – same old same old. Rather than grumbling about it (and listen to others grumble), I decided to be innovative and try something different. I began by revamping a large part of the process and methodology, and turned the “boring” old report into a useful tool that has now been adopted by management and their Board. Since doing so, further enhancements are flowing, not just in the admin area, but throughout the organisation, all the way from management to the floor operatives. Continue reading…

Accounting software – don’t throw out the baby with the bathwater

The dilemma

Accounting software produces reports and provides information to the management and Board of your organisation, delivering an understanding of where your finances sit and where they may be headed. It’s a necessity within the majority of Not for Profit organisations, but is it truly working for you?

The story we often hear is that you need the information and reports, but the software you are using just doesn’t cut the mustard. Reports just don’t appear as you want them to. What should you do? Throw it out and start again, upgrade the software or simply put up with it?

For many NFPs, a decision is made to change the software with a common belief that “all our problems will go away” once it is bedded down. The new system will produce exactly what we need and will solve all of our problems. True enough in some cases, but does it really fix the problem? Are we throwing out the baby with the bathwater? Continue reading…

Health checks for salary packaging

When was the last time you reviewed your salary packaging? Is it time that you reviewed it? With the end of FBT year upon us, many Not for Profit organisations will be reviewing their staff benefit programs. One such benefit is salary packaging.

Below we provide our checklist which will help you determine the ‘health’ of your salary packaging program, whether it is outsourced or administered internally. Continue reading…

Understanding financial reports

Within the Not for Profit (NFP) sector, significant differences exist in the form and content of financial reports (or financial statements) prepared by NFPs. These differences arise due to the wide range of activities NFPs are involved in, the needs of different stakeholders, the legal form of the NFP, and the different laws and regulations that apply to NFPs.

Financial reporting by NFPs provides information to members that demonstrates effective stewardship and accountability, and to assist in their decision-making.

As a dedicated Board Member, understanding Financial Reports can be challenging and frustrating. Often when reviewing results, you are asked for your opinion. Common thoughts and ideas are “What should you I look for?”, “What are they telling me?”, “I hope someone else understands them…” Continue reading…