We know it’s time to rethink the business of charity, but here’s what’s holding us back

Mr Ronalds issued the challenge to leaders to think more clearly about their future in the first instalment of an exclusive quarterly lecture series for members of the Institute of Community Directors Australia, Rethinking the Community Sector.

(ICDA members can listen to the lecture and read the transcript here.)

In his presentation, “Mission over reputation: The case for a merger in times of crisis”, Mr Ronalds said some organisations had struggled to react to the pandemic and were now spending more to keep up. The result was cash-strapped organisations now competing harder for a shrinking funding pool in an already crowded charity and not-for-profit arena.

He said the situation was unsustainable, forcing many organisations into the choice of seeking mergers with competitors or simply dying out.

In the following brief extract from his presentation, he outlines six key reasons why organisations fail to bite the bullet when it comes to making the decision to “transform, die well, or die badly”.

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I am the first to acknowledge that transformation is hard, for many reasons.

First, boards and executive teams have not focused enough on long-term strategic trends.

Second, despite the rhetoric about mission, most boards and management teams in practice prioritise the organisation over their mission.

This often happens because they lack the data and evidence they need to make better-informed decisions.

There has been too little investment in the evidence of impact.

Budgets for monitoring and evaluation are often significantly below what is required to produce reliable analysis.

When program evaluations do occur, they often focus on process, inputs or outputs, rather than outcomes.

These evaluations too often begin at the end of a program, rather than being planned during program design and integrated into the program logic and intended outcomes.

Evaluations are often of poor quality – because of a lack of independence, transparency and dissemination of results.

Third, there are insufficient incentives to make changes before value is destroyed.

Fourth, donors have starved charities of the capital they need. Donors want as much money as possible to be spent on direct program costs and see investments in organisational capacity as mere administration, to be minimised. This thinking is often encouraged by charities themselves.

Fifth, charities have systemically underinvested in IT for decades.

And sixth, they generally fail to create a continuous learning culture or invest in the professional development of their people.

If transformation is hard, dying well is too often seen as failure rather than success.

In the private sector, selling your business to a larger competitor is celebrated.

And it's often a great way for larger organisations to take great innovation to scale and rejuvenate their talent.

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Our Community group managing director Denis Moriarty said Mr Ronald’s address set the tone for a provocative series featuring top thinkers across a wide range of important topics.

He revealed the next speaker in the series would be dynamic young leader, speaker, author and commentator Holly Ransom.

“Each speaker is here to bring novel, ambitious and challenging ideas aimed at improving and expanding the way you perceive your role as a community leader,” Mr Moriarty said.

To gain access to Mr Ronald’s full presentation and other future presentations, including some great questions from top Australian not-for-profit directors and Our Community executive director Kathy Richardson, become an ICDA member now for just $65 per year.