Australian not-for-profits must continue to work hard to adapt to a world facing endemic covid-19, a never-ending financial squeeze, rapid technological, environmental and workplace changes, and a more promising political situation.
That’s the view of the many not-for-profit leaders and experts featured in this special report on the biggest trends in the sector in 2023.
According to a snap poll of our followers on the Not-for-profit Happy Hour Facebook page, the issues of most concern to NFP leaders are:
- Funding pressures
- A difficult environment for fundraising and donations
- Rising costs, interest rates and inflation
- Growing demand for services
- Lack of volunteers
- Workforce issues, including recruitment challenges
- Inadequate governance
The two dozen experts we spoke to said community-based organisations should focus on harnessing emerging opportunities to thrive in the face of the challenges of the coming year.
The political and social environment
The members of ICDA’s advisory arm, the Community Directors Council (CDC), are among the closest watchers of sector trends in Australia, and they say organisations face a mix of continued challenges and new ones.
Council chair Susan Pascoe, whose credentials include a five-year stint as the inaugural chief of the Australian Charities and Not-for-profits Commission (ACNC), predicted that “2023 will be the year when we learn to live with the endemic covid.”
She believed the new response would involve “cementing some of the positive benefits, such as partial working from home for those whose jobs allow it, and greater use of online meeting tools to reduce our travel and environmental footprint.”
Ms Pascoe also believed the nation’s leadership would “reorient itself to a disposition of listening and neighbourliness with our Pacific and near Asian neighbours and will take a more humanitarian approach to aid and development”.
“My hope is that all Australians will be able to accept the invitation from First Nations people through the Uluru Statement from the Heart to walk with them in their journey of reconciliation and engage in constructive dialogue on the proposal for a Voice to Parliament.”
Fellow CDC members agreed the Voice to Parliament would be a central issue in 2023.
As an Indigenous enterprise leader, Jahna Cedar said groups should consider the referendum a priority, alongside “the role we play as champions and allies for Aboriginal and Torres Strait Islander people”.
She suggested sympathetic groups should “walk shoulder to shoulder with our First Nations people, without trying to lead the conversation. It needs to be an inclusive dialogue.”
Sheena Boughen, a cultural strategist who led Our Community’s transition to a four-day week, was optimistic Australians would say “yes”, and urged groups to influence the vote.
Prof Cynthia Mitchell believed that amid a rise in “basic humanity, respect and human decency” there would be a “groundswell of support” for the Voice to Parliament, and suggested groups “be ready to support it in ways that are meaningful to your charter”.
The assistant minister in charge of charities, Andrew Leigh, sporting an Uluru Statement from the Heart T-shirt in a hook-up with community leaders recently, predicted the Voice would be a “huge focus for many of us” in 2023.
“There’ll be the referendum, but I think that will kick off a broader conversation about the inclusion of Indigenous people within a whole lot of organisations and within Australian life. When we have a referendum it’s not just about changing a particular provision in the constitution, it should be about changing the national conversation.”
Dr Leigh also reinforced the more cooperative approach the Albanese Labor government would be taking when it came to working with the sector, having telegraphed those intentions in hosting a series of “town hall” community forums across the nation last year.
The appointment of long-time sector advocate Sue Woodward as the new ACNC Commissioner was another indicator of those intentions, he said.
“It has troubled me when people have treated the portfolio as a charities regulation portfolio. It misses an opportunity to paint on a bigger canvas. The challenges of declining volunteering, joining and participation that we’ve seen over the past generation to me mirror that rise in inequality and create a great opportunity for a government that is keen to boost civic engagement.”
Ms Woodward this month told charities that she was looking forward to meeting key players in the sector.
“I am eager to continue the work of the ACNC to cement its place as a world-class regulator that is respected by the sector and the public alike – and contributes to inspiring trust in the charities that enhance the social fabric of our society,” she said.
But not-for-profit legal expert and Community Directors Council member Professor Myles McGregor-Lowndes warned that the regulatory environment would not be smooth sailing, with tax and fundraising issues looming.
“Well may the Assistant Minister for Charities proclaim that the ‘war on charities’ is over, but a hidden trap left by the last government is set to spring on community organisations that are not charities in 2023,” Prof McGregor-Lowndes said.
Prof McGregor-Lowndes explained the changes in a detailed study, which warns that thousands of not-for-profits could lose their tax exemption status or be forced to do an annual self-assessment of their tax status for 2023–24.
He said the move was a “distortion” of earlier suggested ACNC reforms, but he expected the government to begin consultation soon, with the Australian Taxation Office to then “nudge” not-for-profit boards into making the assessments. Here’s an ATO flowchart explaining the changes.
Amid those changes, Prof McGregor-Lowndes recommended that registered charities (which are automatically tax exempt) should conduct a self-assessment of their tax status.
A parallel regulatory issue for NFPs is the ongoing battle for simpler fundraising regulations, which remain a dog’s breakfast of different rules for different jurisdictions, despite Dr Leigh’s promise to “harmonise” them.
A national framework was expected to be revealed in December 2022 by the Council on Federal Financial Relations (CFFR) but that was now expected this year, Prof McGregor-Lowndes said.
“Navigating the abstruse fundraising rules arising from very different fundraising legislation in each state and territory to conduct national appeals is challenging for most lawyers, let alone harassed volunteer board members, or overwhelmed CEOs and CFOs,” he said.
“It will be critical that the proposed reforms make life easier for community organisations rather than adding another layer of regulation to the chaotic mishmash of laws and inconsistent enforcement.”
There remains some hope that the ACNC’s new leader, Ms Woodward, who was known as a leader in the sector-wide “fix fundraising” campaign, will continue that reform work within government ranks.
Dr Leigh is one of many sector leaders foreshadowing rising demands on not-for-profits.
“Economic inequality has risen, with billionaire wealth accelerating while wages for regular workers stagnate. That will increase demand for the services of many not-for-profits and make the advocacy work of the sector that much more important.”
His recognition is a further sign that the doors to government might be open wider than in the past, but the level of financial support for charities and not-for-profits remains unclear.
An Australian Council of Social Service (ACOSS) study of the impact of cost-of-living increases on the demand for services showed that just 3% of social services were able to meet the demand for their main service, while two-thirds said demand had increased in the past year, and a third of services had been forced to turn people away. The study found that the pressures were a result of “prolonged underinvestment” in communities.
This year, ACOSS will be pushing the Federal Government to:
- fully fund service delivery
- fairly index all grants and contracts
- undertake a comprehensive service needs analysis.
On the ground, sector leaders say demands for services are at an all-time high amid the rocketing costs of living. High demand areas include food, fuel, finances, housing, and family violence.
Infoxchange CEO David Spriggs said his organisation’s support-linking website Ask Izzy had seen requests for “hardship services” double compared to the same period last year.
Food rescue charity Oz Harvest’s chief Ronni Kahn shared his concerns, citing a 75% hike in demand for food relief in the leadup to the festive season, and “a cohort of people who have never needed food relief before”.
Volunteering Australia’s Mark Pearce said that amid rising demand for services, formal volunteering had slumped, but he stressed there was “a real cause of optimism in 2023”. The organisation is set to release a 10-year volunteering strategy in February which will offer groups new ways to tap into the potential of unpaid work.
Community Council for Australia CEO David Crosbie predicted that the issues facing the sector would persist for five years: growing community needs, higher numbers of people at risk, staff and volunteer shortages, and a struggle to cover rising costs.
Charities and NFPs needed to respond by developing their own “organisational capacity” and by building the “collective strength” of the sector by joining the CCA and taking part in positive national campaigns, he said.
The effectiveness of that approach was highlighted during the pandemic, in which the combined efforts of the sector, through the Charities Crisis Cabinet (which included Our Community as a member), had a significant impact on sector support, and more than 20 letters and submissions influenced government decisions.
And while Mr Crosbie acknowledged the new federal Labor government was more receptive to the third sector, it was yet to allocate funds for reforms, he said, whether to fundraising, or for high-level advisory groups to enable the sector to drive its own agenda.
As a result, Mr Crosbie said, many of the CCA’s goals remained unrealised, so the organisation planned to campaign on the value of charities and to unveil a sector “blueprint” for the future.
“This year needs to be the one in which government, philanthropy, community and the sector itself realises the need and the urgency of investing in the capacity of charities and community groups,” Mr Crosbie said.
“Not only do we want community groups and charities bringing us together to play, give, connect, create, share, support and seek the change we want to see in our lives, neighbourhoods and world – we want them to survive even in hard times, improve the way they do things, understand their impact and achieve more for their cause and with their community.”
“In 2023 we will need to invest more in ourselves and to promote our value boldly and unapologetically, both as individual community organisations and collectively for our sector. I know CCA and Our Community are up for the challenge – I hope many more will join us.”
Several members of the Community Directors Council (CDC) nominated urgent action on climate change as an imperative that not-for-profits could no longer afford to ignore.
Chair Susan Pascoe’s experience as a Victorian Bushfires royal commissioner and her memories of the lessons of the devastating 2009 fires are still fresh more than a decade on.
Amid all the demands on NFPs, Ms Pascoe said, the Earth was “the most precious thing we have” and it was the responsibility of every organisation to defend it.
CDC member Gemma Purcell, founder of the Grong Grong Earth Park near Wagga Wagga, argued, “the time for timid government and community is long gone, there is no fat in the system, and we are the adults in the room.”
She believed community organisations were well placed to act, especially in small towns.
“I do some work in community energy and can see the potential of distributed community-owned energy and storage in towns and communities.”
She said community control of energy would “stabilise and strengthen the grid and underpin a massive shift in wealth, re-gearing it back to that community instead of the one-way haemorrhage of money that leaves small towns to pay for power to big energy companies”.
Sheena Boughen predicted 2023 would be a tipping point for renewable energy and expected “radical leaps in the uptake of renewable energy and away from fossil fuels”.
The Charities minister Dr Andrew Leigh agreed with CDC members, saying climate action would be among the top three issues facing NFPs.
“The rising frequency of extreme weather events is increasing the number of Australians who need disaster relief and serves as a reminder of the urgency of acting on climate change,” he said.
Good governance essential for riding out shocks
If the past few years have taught us anything, it’s to be ready for the unexpected.
No matter the physical, political, financial, or social climate, leaders must be vigilant about practising good governance to keep their organisations functioning well.
ICDA general manager Adele Stowe-Linder said good governance was the bedrock of any organisation, and no matter what happened in 2023, good leadership would help groups ride out any shocks. Understanding what issues might present themselves was homework worth doing.
“Staying ahead of the game is one of the things that defines leadership,” Ms Stowe-Linder said in a recent commentary.
She said leaders should regularly return to their organisation’s strategy to remind themselves of their main mission.
Ms Stowe-Linder said the most popular of ICDA’s resources dealt with the basics, such as running AGMs, understanding the roles of various office holders, the board’s relations with the CEO and staff, legal responsibilities, handling conflict, and planning.
In 2023, she said, those basics would also need to include the ESG (environmental, social and governance) “triple bottom line”, with boards increasingly using ESG measures to prove they are making the right decisions.
“Whether organisations have to merge or restructure, invest in new assets, discard an aspect of the operation, or change the mission, you’ve got to be able to provide sound evidence and ethical reasons.”
ICDA training lead Nina Laitala said that since joining the enterprise, she had been “encouraged by the amount of support and resources that are out there for not-for-profit boards and executive staff”.
“Even though boards have responsibilities that can feel overwhelming and confusing to executive staff, with a little planning, they are all very manageable.”
She recommended that boards spend a day each year to establish simple strategies, such as creating shared calendars and meeting report templates, to ensure the right information is being shared each time.
They should also audit their practices to ensure their activities are essential and “in step with the changing world”.
This early planning and review would give boards more time to focus on the organisation's mission and vision, she said.
Our Community legal partners Maddocks said “organisational resilience” would be very important for not-for-profits leaders this year.
Using natural disasters as an example, senior associate Tamie Duncan-Bible said organisations would benefit from reviewing their governance strengths.
Organisational resilience was “how well an organisation understands and prepares for risk, especially non-routine risk like covid-19, floods or fires”.
Building resilience meant organisations should examine “business as usual effectiveness” and strengths and weaknesses, and shift from being “reactive” to more “prepared” and ”adaptive”’.
She suggested answering these questions to buttress your governance.
“When was the last time your major policies and procedures were reviewed, or staff participated in training on implementing and complying with policies? Are your governance documents and delegations current?” she asked.
Finances, funding, fundraising: Money is tight, so what’s new and what can you do?
Julienne Price, the Commonwealth Bank’s executive manager for education, not-for-profit, professional services and women in focus, expects that managing rising costs will be a challenge for organisations in 2023.
Ms Price said that as fixed rates on home loans start to expire, more borrowers will start to feel the pinch. This could affect not-for-profits with loans, but it will also generate more demand for services by affected consumers as well as crimping donations.
On the flip side of that equation, she said, there were opportunities for not-for-profits with deposits to seek a better return.
“I'd be encouraging treasurers to shop around for the best term-deposit rates. For groups with investment funds, now is the time to make sure you're getting the best return and not just letting term deposits roll over without having a good look at the market.”
Prudent treasurers and boards should also consider reviewing their budgets, to trim costs.
“Just as some individuals at the beginning of the year ask themselves, ‘Do I really need all of these streaming channels?’, not-for-profits can also look at unnecessary costs. It’s really a matter of streamlining operations to operate as efficiently as possible, and getting the most out of your resources.”
“Even though it's time consuming going through the details of expenses, it's worth it because there's always opportunities to tighten things up or refresh how the organisation is doing things,” she said.
Aon’s Derek Turner said that insurance charges were set to rise as a result of changes to interest rates, reinsurance costs and a spate of natural disasters. NFPs should expect changes to coverage terms and deductibles, and reduced protection. In some risk categories, insurers had dropped out of the market. He said it was worth checking in with your broker.
Ms Price said the past winners of the Not-for-profit Treasurers’ Awards, sponsored each year by the Commonwealth Bank, were an inspiration to organisations wanting to run a tighter ship, and highlighted simple but powerful suggestions such as “ask for help”.
“We’ve got bankers and experts who are ready to help, including with economic updates that we invite groups to, and during Not-for-profit Finance Week, which we support to provide free webinars and resources to thousands of leaders. Not-for-profits will also often find that there are friendly local accountants and legal firms prepared to volunteer their expertise.”
One past award winner, for example, had helped oversee a merger of her organisation with another like-minded group to save funds. Recently, Ms Price spoke to a Queensland Indigenous organisation that merged three organisations into one, with one CEO and one board.
“That’s actually working really well to combine the back office, simplify operations and reduce costs.”
Ms Price stressed that one of the biggest and most enduring assets for not-for-profits was their values, and these would be as important in 2023 as ever.
Accounting rules for medium to large not-for-profits look set for a shake-up aimed at boosting funding, reducing costs and slashing red tape.
The changes have been proposed by the Australian Accounting Standards Board, and Our Community contributed to the consultation process along with more than 1000 community finance leaders who took part in a series of webinars late last year hosted by not-for-profit finance expert Professor David Gilchrist.
Prof Gilchrist said the input from the sector would help keep a lid on rising costs, help groups make better decisions by understanding true costs, and increase the financial viability of groups.
Community Directors Council member Catherine Brooks is also a fundraising strategist, and recently spoke about funding trends in ICDA’s quarterly lecture series, Rethinking the Community Sector.
She told participants there were many untapped funding sources for organisations, but groups should focus their efforts.
“We really need to be thinking about how we best use our precious resources, our time, and our energy to invest in those market segments that are actually going to give us the best return on investment when it comes to funding for our organisation,” she said.
Ms Brooks believed not-for-profits in 2023 should:
- focus on building relationships with key funders, including trusts, foundations and major donors
- keep an eye on corporate giving, which could soon overtake mass market giving as a funding source
- consider how groups will attract the billions of dollars set to be gifted in wills in the coming decade.
She said groups should prepare an organisational case for support, create business plans for their priority projects, identify “best chance” funders through platforms such as the Funding Centre, and continue to closely engage and thank supporters.
Cathy Truong, executive director of Our Community’s donations platform, GiveNow, said not-for-profits in 2023 would need to move with the times.
She said donations dropped as much as 12% on the platform during 2022, with the fall consistent across small to medium-sized organisations. This meant that in 2023, organisations would need to think differently.
Her first tip was to “think like your supporters when it comes to managing finances”. She said that in the current climate of rising costs and tighter budgets, not-for-profits should avoid seeking large donations from people who couldn’t afford it.
“Seek smaller-value, but regular donations,” she suggested.
“This gives donors a better sense of control. And it also fits into the ‘subscription’ model of expenditure that we are all so used to these days.”
She said lower-value monthly donations were often more rewarding in the longer term and helped create more financial certainty for organisations.
Regular giving worked well to engage younger donors who were more comfortable with “subscription” models.
“More and more younger people consider themselves donors, a trend that has been building for more than ten years. Don’t forget them, and build ways of connecting that fosters these relationships,” Ms Truong said.
Nominating the right donation amount was also an important consideration.
“Donors take their cues from you, and how much you ask for really matters. For example, if you don’t ask, supporters will assume you have all the money you need. On the other hand, if you ask for just a little, they might think your group has a relatively small program or operational need.
Donors looked to the highest donation value and “calibrated” that down usually to the second lowest or “middle” donation value, she said. Simplifying donations by using tools such as GiveNow’s “embed” feature also smoothed the way for more giving.
Funding Centre grants database manager Stefanie Ball said that 2023 grant rounds would soon open, and not-for-profits wanting to understand where the money was likely to flow should look to the federal, state and territory budgets.
Our Community’s summary of the 2022–23 federal budget shows that the Albanese government will prioritise spending across the NDIS, aged care, local government, First Nations activities, CALD activities, rural and regional support, sports, community development, climate action and schools.
Ms Ball said the first and third quarters of the year would be the busiest times for grant rounds opening, and applicants should be ready for peak times for new grants in March, April and October.
Canny groups would already have a sense of likely funding opportunities in their sub-sectors, but should prepare their grants strategy early to be ready to take advantage.
Top funded areas were, in order, project and program costs, capacity building, equipment/vehicle costs, network building and collaboration. The least-funded areas were legal costs, fundraising costs, advocacy, and monitoring and evaluation.
Ms Ball said successful grantseekers shared several important habits, not the least of which was applying for more grants and ensuring their application information was up to date.
The low-cost Funding Centre database provides tools for groups wanting to track and manage their grants, and a new SmartyFile system being rolled out this month will serve as a central repository where applicants can store contact information, files and other data.
Our Community executive director Kathy Richardson said the SmartyFile platform was designed to make applying for grants and other file management tasks “a whole lot easier” for grantseekers.
Will your not-for-profit workplace keep pace with change?
Community Directors Council member Catherine Brooks predicted covid-19, and its aftermath, would continue to affect organisations throughout 2023.
“In 2023, we are going to see the hangover of burnout and fatigue in the not-for-profit sector as a result of the pandemic, partly as a result of the ‘catch up’ mentality of 2022,” Ms Brooks said.
“We can’t assume that everyone got time off over the end of year holiday period. As leaders, we need to be cautious about unnecessarily adding to our people’s workload.
“From the CEO to the front of house staff, there are a myriad of issues facing individuals and families alike – from the rise in the cost of living, to our young people struggling with interpersonal skills thanks to social media, and an increase in workplace pressures too as we navigate the never-ending cycle of seeking government and philanthropic funds.”
Ms Brooks recommended that organisations:
- offer employee assistance programs, including support for mental health
- narrow organisational focus to “what is necessary and important”
- encourage staff to “leave loudly” at the end of the day to acknowledge the value of a work/life balance
- consider adopting a four-day work week.
She said Our Community’s experience of instituting a four-day week had been even more successful than expected, with greater productivity and a 36% reduction in sick leave.
Fellow Council member Sheena Boughen, who led the four-day-week transition, said the change had not only sparked new ways of working and increased focus, but had “affected the DNA of everything staff see about their life”.
Even if a four-day week wasn’t something every organisation could consider, boards and chairs should “decrease the burden on their teams”.
“We must lighten the load and be confident to articulate what matters most, and not get wrapped up in trying to anticipate all the challenges.”
She said a “realistic, optimistic and imaginative” way forward was for boards to work with employees to “ease the regulation burden”, “say no to inefficiencies” and “improve our processes”.
Several experts nominated hybrid work as part of the managing the workload, with most Australian workers expected to work from home on average once a week. An Infoxchange study shows 83% of NFPs now allow staff to work from home.
Institute of Community Directors Australia (ICDA) legal partners Maddocks - and workplace legal specialists – say organisations interested in hybrid work must have a good understanding of productivity, levels of supervision and trust, employees’ commitment to the job, and communication and workplace scheduling.
Maddocks partner Lindy Richardson said in a recent webinar that any hybrid mix must reflect your workplace’s type, clients, stakeholders, culture, and management style.
Maddocks partner Catherine Dunlop said not-for-profit managers keen to protect staff should be able to understand and address “psychosocial risk”.
“Psychosocial hazards comprise anything that could cause high levels of work-related stress with consequent mental or physical harm, such as bullying, sexual harassment, high job demands, or exposure to trauma or violence.
“These have always been around, but 2023 will be the year that many jurisdictions will legislate to embed obligations on NFPs.”
She said NFPs should undertake comprehensive risk assessments, and check Safe Work Australia’s guidance to eliminate or minimise those risks.
The need to protect and cultivate good staff, particularly amid the continuing squeeze on good talent, emerged as a strong theme among the experts we spoke to.
Community Directors Council member Jahna Cedar said attracting and retaining employees in the context of the labour market shortage and increasing salary packages in the private sector could test some organisations.
Another Council member, Anne Cross, said that NFPs should keep watch on reforms affecting the security of work in the sector.
“Funding and purchasing policies and practices of governments have for decades resulted in short-term funding contracts, which in turn has driven great insecurity for many workers in the funded NFP sector, and of course poor outcomes for those who rely on us for services.”
Ms Cross said the Secure Jobs, Better Pay legislation would limit the use of fixed-term contracts.
“Given the government’s desire and commitment to improving security for workers, it seems that this opens up avenues for disputing the use of short-term funding contracts by government and thus reducing insecurity, especially in the social services sectors.”
Personnel at Our Community legal partner Maddocks have also turned their attention to the Secure Jobs, Better Pay changes to the Fair Work Act 2009.
Partner Lindy Richardson said a key challenge for NFPs would be complying with the provisions limiting fixed-term contracts, which would be introduced in a “transitional way”.
She said other changes in the same bill include a ban on pay secrecy, a greater right for employees to request flexible work, and new rules for enterprise bargaining in not-for-profits – including more industry-wide bargaining, which would be subject to a “better off overall test”. Maddocks has produced a handy summary of the changes here.
Technology an opportunity and a threat
You may have already heard of the artificial intelligence, ChatGPT, which has commentators and experts buzzing about currently free system’s capabilities, with a newer and more powerful version of the system to be released in 2023. Big investor Microsoft is expected to integrate the tool into its software suite.
We asked ChatGPT this: “What are the most pressing issues facing Australian not-for-profits in 2023?” Here is its response.
My training data only goes up to 2021, and I am not aware of the specific issues that may be facing Australian not-for-profits in 2023. However, in general, not-for-profits often face challenges such as:
Funding: Securing stable and adequate funding is a constant challenge for many not-for-profits, as they rely on donations and grants to support their work.
Competition: With many organisations vying for limited funding and resources, competition for grants and donations can be intense.
Demonstrating impact: Not-for-profits are often under pressure to demonstrate the impact of their work and justify their funding, which can be challenging.
Meeting the needs of their community: Not-for-profits may face challenges in identifying and addressing the needs of the communities they serve, and in adapting to changes in those needs over time.
Keeping up with regulations: Not-for-profits must comply with a wide range of laws and regulations, and may face challenges in staying up to date with changes in these requirements.
Staffing and volunteers: Finding and retaining skilled staff and volunteers can be a challenge for many not-for-profits, which can impact their ability to deliver services.
As you can see, the tech has its limitations, but the possibilities are mind-boggling. We also asked ChatGPT for three reasons why NFPs might use the platform, and it suggested the following:
Cost-effective: ChatGPT can handle a wide range of tasks, including customer service and data entry, which can help reduce the need for human staff and lower costs.
Time-saving: ChatGPT can quickly process large amounts of data and respond to customer inquiries, allowing organisations to focus on other important tasks.
Personalisation: ChatGPT can be trained to understand the specific needs and preferences of a particular organisation, allowing for more personalized interactions with customers and stakeholders.
Other uses we’ve found include:
- improved communication for those with a disability or low literacy
- writing and refining grant applications or reports
- answering basic questions, such as FAQs
- simulating conversations and dialogue
- analysing texts
- translations into more than 50 languages.
Read more about the ethical and practical considerations of the new AI tool on The Conversation.
At a broader level, NFPs wanting to consider the future of digital society would be well served reading the latest predictions of philanthropy “wonk” Lucy Bernholz, whose Philanthropy and Digital Civil Society: Blueprint 2023 is out now.
The 50-page publication covers the many issues and trends affecting digital civil society and the important role of community organisations. Among many prescient observations about AI, data and outcomes measurement, and bold predictions such as the death of Twitter, Dr Bernholz nominates some tricky questions organisations should ask themselves, such as these:
- How well do you understand the digital trail you generate every day?
- How well does your organisation understand the data it collects and stores?
- How well does your not-for-profit negotiate trade-offs between safety, privacy and other goals?
- How well does your organisation understand the digital ramifications of your work?
Infoxchange CEO David Spriggs believes building the sector’s digital capability will be crucial in 2023.
His organisation’s report Digital Technology in the Not-for-Profit Sector, released in late 2022, revealed covid-19 had spurred on many new priorities for NFPs, led by moves to build digital skills, adopt collaboration tools, improve video conferencing, enhance data protection and file storage, and improve online service delivery.
Many NFPs were playing catch up, with just 44% of study respondents reporting staff were confident about using the tech and IT needed for their roles.
“There has been significant under-investment in digital skills across our economy in recent years. This is especially reflected in the not-for-profit sector, which has historically struggled to fund the building of digital capability of staff and volunteers,” Mr Spriggs said.
According to the latest edition of Salesforce’s annual global Nonprofits Trends Report, 41% of Australian organisations believed digital transformation was a “must have”, even though nearly 79% of groups were at a “medium” level of digital maturity. The study also showed that organisations with a high level of digital maturity were far more likely to have a positive work culture and reduced burnout.
A growing technology issue for many groups is the threat of data breaches, with the not-for-profit sector particularly vulnerable to human error.
A report by the Office of the Australian Information Commissioner (OAIC) last year found human error was behind nearly 50% of charity breaches. The remaining half were caused by malicious or criminal hacks.
At the same time, Infoxchange’s latest study found 54% of staff didn’t have training in cybersecurity, while 45% didn’t have a response plan in case of breaches. This seems likely to change with increased awareness.
Infoxchange CEO David Spriggs said the sector should make data protection a top priority, while Commissioner Angelene Falk of the OAIC urged all groups to review personal information handling and risks.
“Organisations in the not-for-profit sector can reduce the risk of human error by promoting staff awareness about secure information handling practices,” she said.
Community Council for Australia CEO David Crosbie said funding for cybersecurity was essential.
“We only need look at recent cyber-security failures in some of Australia’s largest companies to understand the urgency of investing in the organisational capacity of our charities and community groups. Creating strong and resilient organisations is not an optional extra.
“Cybersecurity is a clear demonstration of why effective systems and good ‘administration’ are not money wasted or a diversion from cause. We need to invest more in our staff recruitment and development, our measurement and evaluation, our data systems, our governance and accountability, engagement and communication with the communities we serve.”
Aon’s Derek Turner warned that cybercrime was the “fastest growing crime in the world” and that too many NFPs believed they were “too small to be a target”.
“In fact, those groups can be seen as easy targets as a result of a lower level of IT security.”
Insurers now required groups to use multifactor authentication “as a minimum” to protect their systems, he said.
Whether your board members are enthusiastic, baffled or bemused about crypto, your organisation needs to keep up.
Many organisations desperate for funds are considering accepting donations of bitcoin and other cryptocurrencies, but perhaps one of the best arguments against the practice is the legacy of former billionaire Sam Bankman-Fried, who faces fraud charges following the collapse of his crypto exchange FTX.
That said, there are still many who believe crypto-donations and fundraising have a future.
In a comment piece published last year, Our Community managing director Denis Moriarty wrote, “I would be the last person to say that cryptocurrency doesn’t have its uses. Those uses are, unfortunately, the facilitation of crime and the avoidance of regulation, neither of which is a core function of most good causes.”
The ACNC’s information sheet about crypto assets is less direct than that, but NFPs should still read between the lines, which include the following points:
“Charities must understand that crypto-assets are generally considered a high-risk investment. High risk investments are typically not appropriate for charities.
“In this context, charities and their responsible people should think carefully before either accepting donations of crypto-assets or investing in these assets to ensure it is the right decision for their charity. This includes understanding the opportunities and risks associated with these assets.”
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