Charity begins by looking at how you operate

Apr 20 2006 by Nic Paton Print This Article

Not-for-profit organisations could do well to adopt some of corporate world's basic business practices if they want to operate more efficiently, according to new U.S research.

The study by Accenture surveyed more than 230 senior executives involved with non-profit organisations in the U.S in an effort to address key barriers to achieving high performance.

"Despite the hundreds of billions of dollars raised by the approximately two million non-profit agencies in the United States each year, non-profits continue with the struggle to grow their organizational capacity," said Ed Fikse, chairman of Accenture's U.S. Geographic Council.

"With the backdrop of 2005 and the unprecedented pressure put on the sector by Hurricanes Katrina and Rita, it's particularly timely to explore the challenges and new opportunities facing non-profits," he added.

The research found an overwhelming percentage of non-profits in the United States were primarily focused on donors and fundraising, rather than basic operational improvements that could actually enhance their success.

In fact, three of the top five issues for those polled related to generating income.

Key challenges flagged up by those polled were: expanding the current donor base, recruiting high-impact board members, increasing donations from current donors, attracting and retaining skilled staff, increasing donor loyalty and retention, and cultivating a dynamic and effective culture among board members.

Other challenges included establishing a clear set of quality benchmarks for assessing services, using IT to reduce costs and create value, pursuing collaborative partnerships with public sector agencies (including government) and pursuing collaborative partnerships with the private sector.

What the sector therefore needed to do was embrace some of the basic operational tenets of the commercial sector, said Accenture.

This included making better use of technology and overcoming inherent limitations in headcount by more effectively organising and managing volunteers as an extension of paid staff.

Not-for-profit organisations could also do more to explore and adopt new collaborative business models with complementary organisations, said Accenture.

They could convince corporate and private-sector donors to fund general operations instead of "signature" or "vanity" programmes.

It could also be a good idea to adopt appropriate metrics that enable organisations to evaluate the success and impact of their delivery of services and programmes.

Alongside this it would be wise to engage board members to ensure quality governance structures were in place.

"This research illustrates how now Ė more than ever Ė non-profits do need to develop and adopt higher order business skills," said Stephen Jordan, vice president and executive director of the Business Civic Leadership Center of the U.S. Chamber of Commerce.

"We need to see an increased commitment to transferring expertise and people to non-profits so that they are better able to address the complex issues they face. The work these organisations perform is of the utmost importance to society. We can]t afford not to help them manage their affairs wisely," he added.