Media Release
 
October 13

Finance and fundraising haunt Not-for-Profit organisations

Not-for-Profit organisations are becoming increasingly concerned about finance and fundraising, according to a nationwide survey by international accounting firm Grant Thornton.
 
Financing the organisation was identified by 72% of survey respondents as one of the three most significant issues they faced during these challenging economic times, with 47% saying that fundraising was also a key area of concern.
 
Grant Thornton partner Brent Kennerley, a specialist in the Not-for-Profit sector, said that both these figures were up significantly from the last survey two years ago and the highest since the survey commenced in 2003.
 
“While these two aspects were the major concerns in 2007, it is the size of the increase that is the most revealing in 2009. Two years ago, 56% saw financing their organisations activities as a significant issue and only 30% viewed fundraising in the same way,” he said.
 
Other areas of significant concern are the role of the board in relation to governance, retaining and motivating staff and the managing and compliance costs of staff.
 
“It is fair to say that most Not-for-Profit organisations are responding to the economic downturn by taking a closer look at their cost base to ensure their spend is essential. They are also closely monitoring all financial statements with many taking steps to improve their understanding of the key risks to their businesses.
 
“However, the present economic situation is putting added pressure on these organisations,” he said.
 
Two areas where there has been noticeable change are in the role of community trusts and also individual donors.
 
“Many community trusts simply have no money to give due to the global financial meltdown. Partially filling this gap is the influence of individual donors who, from general discussion, appear to be giving more than ever before.”
 
A similar survey carried out by Grant Thornton in the United States in 2008 showed that in depressed economic times individual donors were likely to choose organisations with which they had a personal or professional connection
 
“With this in mind, New Zealand organisations should be looking at strengthening their relationships with their long-time donors,” he said.
 
Brent Kennerley said that the present depressed economic conditions were reflected in two other areas of Not-for-Profit organisations, budget forecasting and human resources.
 
“In these uncertain times organisations should be looking to set budgets to forecast 24 months to 36 months in advance, and we actually saw a small drop in the number doing this and a corresponding increase in those only looking 12 months ahead.
 
“The retention and motivation of staff, which had been the biggest mover in the 2007 survey, dropped back to 2005 levels, again a direct reflection of the tightening job market two years ago compared with what we have today,” he said.
 
The Grant Thornton Not-for-Profit survey was undertaken by 181 participants covering a wide cross section of Not-for-Profit organisations and geographic locations. Earlier surveys were completed in 2003, 2005 and 2007.
 
ends