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Real Business : Issue 2 2009
INDUSTRY PROFILE CAREFACTOR WRITER: MIKE HANLEY PHOTOGRAPHY: CARLA COULSON, EAMON GALLAGHER P eople wishing to make a diff erence in the world often look outside their job to fi nd the answer. But for those working in the not-for-profi t sector, making a diff erence is, in fact, part of the job. Th e increased search for more meaningful work is good news for the not-for-profi t sector, especially at a time when they are feeling the pinch on revenue. Th e sector, which relies on people’s willingness to put their hands in their pockets, is linked to the performance of the economy as a whole. When business slows, people stop donating faster than you can say “recession”. It’s a diffi cult balancing act because although not-for-profi ts are just that, they are also meant to be “not for loss”. Th ose trying to balance the books have to fi nd innovative ways of cutting costs. It’s little surprise that CPAs are in demand. “Th e not-for-profi t sector holds very good opportunities for CPAs,” says Sue Madden, fi nance manager of Cancer Council Victoria, Australia. “People need to feel confi dent about where their money is going and not-for-profi ts need to show that they are accountable.” Th e signs of parsimony are everywhere: donations, gifts, bequests and investments – from individuals, businesses or philanthropic foundations – are falling. funded from individual sources over the next few years. But, says Prashant Sharma, “We look at the crisis from a holistic point of view. The fi nancial crisis is just one in a number of interrelated crises the world has been undergoing over the past decade. The fi rst is the climate crisis. The second is the energy price crisis. The third is the food and hunger crisis. And now, the fi nancial crisis. “Although there is a lot of noise about the fourth crisis, because it affects the rich countries a great deal, crisis is no stranger to the work we do.” In response, Prashant says UNESCO is integrating its three streams of activity – education, science and culture – to work together to deliver integrated projects and increase effi ciency. “On the one hand, this series of crises means we have to deliver more,” he says. “On the other, funding is drying up.” Management innovation is a large part of the solution. “We need to provide programs more cheaply, effectively and better targeted,” he says. Prashant was originally educated in India, achieving an undergraduate degree in marketing. Moving to Australia, he studied accounting, receiving an MBA from the University of Technology, Sydney. Offered a temporary, three-month job at UNESCO, Prashant jumped at the chance. Now, three years later, he has moved into a permanent role at UNESCO’s headquarters in Paris and undertaken CPA Program at the same time. CPA Program is extremely valuable, he says, in performing the fundamental role of internal audit. “CPA Program gave me a huge amount of knowledge and really made me a better professional, both technically and ethically,” he says. RESPONSIBILITIES, BUT ACCOUNTING IN THE NOT-FOR-PROFIT SECTOR CAN ALSO MAKE A IT MIGHT BIG BE A BALANCING ACT WITH What’s more, the value of existing bequests and endowments has fallen in line with the plummeting value of property and other assets. Fundraising, too, has become signifi cantly harder. REWARDING CAREER. Ticket prices to one of Sydney’s top annual balls, the Gold Dinner for the Sydney Children’s Hospital, Randwick, have been slashed from $2500 to $1000, and the 2009 event is unlikely to raise anything like the A$4 million it attracted in 2007. Meanwhile Australian Red Cross has announced that it is to axe up to 20 jobs. In Asia too, the not-for-profi t community has been dealing with a funding drop-off . In Malaysia, online portal Charity Malaysia reports that the fi nancial crisis has resulted in some not-for-profi ts losing up to 60 per cent of their contributions. According to Professor Peter Shergold , CEO of the Centre for Social Impact at University of New South Wales, Australia, which brings together not-for-profi t, philanthropic, business and government sectors in an eff ort to help build high performing and sustainable social ventures, there are four main strategies that not-for-profi ts should implement during times of economic challenge: 1. Communication. Organisations should keep in touch with their donors, even as the relationship seems to wither. Keeping existing relationships is much easier than making new ones. 2. Partnership. Th e more donors feel they have a stake in the outcomes of projects, the more willing they are to continue with them, even when other things must be cut. 3. Capacity. Companies shouldn’t cut in areas that will signifi cantly curtail their ability to fulfi l their mandate and should keep an eye on the prize no matter what the short-term pressures are. 4. Strategy. It’s important for not-for-profi ts to have a long-term vision of where they want to be, regardless of short-term fi nancial volatility. When cuts must be made, they should be made with this vision in mind. Sue Madden says that such strategies are always important for not-for-profi ts. “We’re always juggling the need to raise funds and the needs to raise awareness.” Th e issues confronting CPAs in the not-for-profi t sector are as varied as the organisations they work for and the skills, training and infrastructure that CPA Australia provides them with are an invaluable resource. 21 20-22_NotForProfitv4_RB907.indd 21 20-22_NotForProfitv4_RB907.indd 21 OK WITH CORRECTIONS DESIGN EDITORIAL PUBLISHER CLIENT By signing your initials in the space provided you are either approving this layout or authorising the listed changes. CORRECTIONS TO MAKE DATE OK DESIGN EDITORIAL PUBLISHER CLIENT ADVERTISING 9/07/2009 5:33:09 PM 9/07/2009 5:33:09 PM
Issue 1 2009
Issue 1 2010