NFP Survey 2017: People and engagement, skills and remuneration

By admin - October 9, 2017

As the NFP sector changes, there is an increasing need to operate in a more commercial and business-like manner. This is particularly highlighted by the transition to the National Disability Insurance Scheme and the competitive market for disability supports.

People and engagement

In this context, our research indicates that volunteer contributions are reducing. Traditionally, volunteers would also become members of the NFP. It is therefore not surprising to also see that the role of membership (excluding NFPs that are professional associations) continues to decline. 

At the same time, NFPs are committing substantial resources to communicating online and through social media. They are engaging with stakeholders in new and innovative ways, and reaching a broader audience than ever before. This expanded base of friends, supporters and clients is rapidly replacing the traditional “membership”.

We see NFPs needing to spend more time and effort attracting and retaining clients in a competitive market. This necessitates doing business with clients in a more friendly and accessible way, and being ultra-responsive to client needs to maintain competitive advantage.

What this means for you

  • Develop and review your NFPs strategy for engaging with clients and broader stakeholders
  • Review your communication channels to reach these people and see how effective they are
  • Understand and review the role (if any) your members and volunteers wish to play in the governance of your NFP

Skills

Boards of large NFPs are increasingly becoming the domain of professionals and highly skilled individuals. It has become essential for board members to skill up and for expert board members to be recruited, with any remaining skills gaps being supplemented by purchasing advice.

Traditionally, NFP boards were elected by and from the membership. With the increasing need for skills, we now regularly see one third of board positions being reserved for specialist skills regardless of whether the appointee is a member. Robust recruitment and selection processes are being put in place, to the exclusion of the accidental, well-intentioned volunteers lacking the requisite skills.

At the forefront of this trend are NFPs which are changing their board structures to require a majority of board positions to be filled based on the board member’s skills and experience.

The most common – and consistent from survey to survey – method of recruiting new board members was personal referrals. The next most common were public advertisements, external nominations and the Australian Institute of Company Directors referral service.

As boards are seeking greater diversity in their numbers, especially with the trends moving towards specialised and skills Board members, an evolution of the preferred recruitment methods will be interesting to watch in the coming surveys.

NFPs will need to think innovatively about how else they can draw from a broader pool of talent.

What this means for you

  • Determine the critical mix of skills your board needs
  • Consider whether these skills can be brought in some other way, e.g. purchasing services, advisory committees
  • Think about how you will communicate to members/ stakeholders that the right skills mix is in place • Review current and develop appropriate mechanisms for your NFP to identify and prepare potential future board members
  • For national NFPs, consider whether regional/sector/ consumer representation is essential at board level • For professional associations, consider whether you need skills from other professions to govern your NFP

Remuneration

As NFPs move to skills-based boards, it becomes increasingly difficult to attract and retain good quality board members. By their nature, highly skilled and motivated board members will be time poor and have competing professional and personal demands.

Our research shows the volunteer spirit remains alive and well at the board level, with almost 4 in 5 boards volunteering their time. However, NFP board remuneration is increasingly common, and our research indicates that remuneration levels are on the rise. Remuneration can encourage professionalism, but at the risk of fostering self-interest.

Many NFPs increasingly see remuneration as an essential tool for attracting more talented board members. With director pay controversies gaining extensive media coverage, it will be important to remunerate in a transparent way that is sympathetic to the NFP culture of fairness and giving.

What this means for you

  • Understand the views of your members and stakeholders on remuneration
  • Conduct competitive analysis as to whether similar organisations in your sector remunerate board members. Think about the data you will need to justify the proposed remuneration amount
  • Find out from prospective board members whether lack of remuneration is a barrier to becoming a board member

Access the full NFP Benchmark Survey Report 2017 here


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Rob Southwell

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Bryan Hughes

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Chairman


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Tom Verco

Adelaide

Managing Principal


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Ross Walker

Brisbane

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