The Institute of Community Directors Australia recently published the results of their 2015 Not-for-Profit Finance Survey. This report provides an overview of the obstacles faced by Australia’s non-profit sector as it struggles to meet the service needs of their community.

Regardless of the size of the non-profit, board members and others are likely to find this report helpful as they begin to make plans for key activities, such as fund-raising, risk management, and compliance with financial regulations and guidelines.

Funding

Many of the report’s most significant findings relate to the sector’s ability to raise and secure funding to support their service goals. Key discoveries highlighted in the survey include the finding that 85% of survey respondents report that it’s become more difficult to obtain regular sources of funding.  Related to this discovery is the fact that 63% of the larger non-profits now report that they rely primarily on grants and government contracts for funding. In contrast, one and five also reported that their largest source of income comes from service provisions or income from trading activities.

In addition to these findings, one in five respondents also reported that this past year was their most difficult when it came to raising funds for their group. Despite this challenging fund-raising environment, a greater number of respondents also reported that they were still expanding services in their community. The desire to maintain service levels despite fundraising obstacles may be one of the reasons why 56% of the survey’s respondents also reported that they felt under pressure to control costs by cutting back on overhead expenses.

Risk Management

We often hear about incidents of fraud and cybercrime in the news when the victims are customers of large businesses.  Just because we don’t hear very many reports about nonprofit crimes, doesn’t mean that the sector is immune to this growing threat. The survey found that 6% of the respondents reported that their non-profit had been a victim of fraud in the past three years, and that 60% of this fraud went unreported. Survey results also indicate that a significant number of non-profits may be vulnerable to cybertheft, with 29% reporting that their non-profit was not doing enough to protect itself from cybercrime.

Financial Governance

Board members must have a thorough understanding of their organisation’s finances in order to ensure their organisations’s long term sustainability and survival. While many board members understand this crucial role and responsibility, and take steps to learn more about their non-profit’s financial standing and activities, a shocking 22% of the survey’s respondents reported that most of their board members don’t understand their non-profit’s finances.

A key action that boards take to stay on top of their finances and remain in compliance with the various updated governmental requirements is to appoint a treasurer. According to the survey, 53% of volunteer organisations reported that they have a hard time finding a volunteer treasurer, with 5% of small organisations and 11% of larger groups, having to resort to making the position a paying one in order to attract a suitable candidate.

Hopefully the results of the survey can help you identify important trends that have the potential to significantly impact your non-profit as you plan to meet its various obligations, challenges and goals in the coming year. What steps will you and other board members take to ensure that your non-profit can continue to obtain funds, withstand threats from traditional fraud and cybersecurity risks, and meet governance and regulatory requirements while fulfilling your service goals?