Key considerations for NFPs coming into the new year

Mark Harrison
Mark Harrison, partner/executive director at national accounting and business advisory firm Pitcher Partners

In this guest post, Mark Harrison, partner at accounting and business advisory firm Pitcher Partners provides some helpful advice for NFP organisations preparing their business strategy for the year ahead. This post originally appeared on the Pitcher Partners website here.

As we approach a well-deserved holiday break, purpose-driven organisations will be looking forward to the new year with many wondering ‘what does the coming year hold?’ While we may not hold a crystal ball, there are some common considerations that appear to be holding centre stage for not-for-profit organisations as they look to 2023.

As a sector, there is a focus on renewal and replenishment. Having survived the two years of significant pandemic disruption and continually pivoting and responding to the changing world, organisations have then had to overcome the challenges of operating in the ‘COVID-normal’ landscape. There are a number of considerations for NFPs as we look to the new year.

An opportunity to refresh and realign strategies

For many purpose-driven organisations, their boards and executives have done monumental work over the last few years to support their people and stakeholders through the challenges posed by the pandemic. The ongoing challenge now is how to continue this growth and strategic energy. With board burnout a real possibility, for many organisations the answers lie in renewing and refreshing their leadership at the board and executive level. Organisations should be evaluating if their teams have the capacity to meet the potentially challenging times of a slower economy and to evolve business models as competition and demand grow. Looking forward, an organisation should evaluate the internal skillsets and consider if they are appropriate for the next phase of the business journey. What’s more, do the current leaders want to take on the organisational change work that may be required? If not, it may be time to refresh your leadership team.

The struggle to engage great talent

It’s no secret how challenging the current Australian labour market is. Pitcher Partners Radar report respondents said they had challenges with attracting the right staff (49%) and/or retaining good staff (48%). It is critical that employers ensure that they offer an enticing Employee Value Proposition (EVP). The people within an organisation are its most important asset, and reducing the motivation for staff to leave, and maximising engaging the best new talent is critical to service delivery. Engaging and retaining staff through flexible working, good organisational culture, competitive remuneration and a wide range of employee benefits will put organisations on the front foot moving into the new year. Those that are willing to evolve their EVP to match the flexibility of the modern workforce will provide an edge over their competitors.

Improving data security

Trust is a key facet of a good brand reputation, particularly in the NFP sector. Recent cyberattacks and data breaches have seen significant damage done to some high-profile brands. The information within many NFPs such as donors’ or clients’ personal details, would be attractive to many cybercriminals. Ensuring that this information is only held if absolutely necessary, and is protected with the upmost technical capability should be a critical part of business processes. To combat exposure, organisations should regularly communicate with staff regarding the implications of the increased risk, what to be watchful of, and how to report a cyber incident. In addition, a staff training program that is easily accessible, for example through video tutorials, will provide the necessary learning to empower staff to avoid falling victim to cyber-criminal activity.

The importance of ESG

According to Radar Report respondents, just 18% of Australia’s mid-market businesses have implemented and are reporting on their Environmental, Social and Governance (ESG) practices. As community concern grows around these issues, alongside an increase in federal and state regulations, it is not a matter of if, but when mid-market businesses need to take action. To meet the expectations of prospective employees as well as society more broadly, organisations need formal and transparent policies and strategies that demonstrate commitment to change in each of these areas. Further, it is critical that the change or impact is measurable, and that the organisation is able to showcase that they are able to ‘walk the walk’, aligning tangible project outcomes with organisational policies and values.

A time to focus

With the Australian economy expected to continue to tighten in the second half of 2023, organisations should plan for the ‘service demand exceeding supply’ trend to continue. For most, unnecessary costs were driven by COVID uncertainty, is this cost consciousness still prevalent? Moving into 2023, planning must be strategic and driven by an organisation’s core needs to preserve its capability. Instead of trying to be something to everyone, focus on delivering key services in a sustainable way. An organisation cannot operate in economic uncertainty trying to over-deliver; instead, they should focus on building future-proofing strategies that align with the organisational cause and the needs of their people within the wider NFP landscape.


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