How the traditional skillsets for NFPs is changing
Not-for-profits will need to adopt a new skillset and expertise in order to compete in a highly complex and rapidly changing sector
Not-for-profits are increasingly needing to address rapid changes to the sector with investments in new skillsets and expertise becoming critical to sustainability.
As the market becomes significantly saturated with competing NFP bodies, and as government reforms and digital advancements bring huge variations to the sector, organisations will need to ‘future-proof’ their techniques to survive.
Third Sector spoke to Doxa CEO, Steve Clifford, who said that due to the complexity of the NFP sector, boards will need a variety of skills to address the changes.
“It’s important that you have a broad range of skills on an NFP board because of its complexity, and that means people who have corporate and finance and so on skills,” Clifford said. “Hopefully they’ve also got a strong sense of justice and a big heart.”
Clifford himself transitioned from the corporate world of international commercial law firm, Allens, to the NFP sector five years ago. He has since worked as Head of Australian Operations at Save the Children and Chief Operating Officer at Whitelion.
Clifford said his passion for working with disadvantaged children was the motivation behind the switch. Using corporate skills, he currently runs a successful cadetship and mentorship program aimed at supporting youths through their education.
“The corporate sector is very outcomes driven, it’s completely outcomes driven. The main outcome being profitability and revenue so I’m taking that drive towards outcomes, but it’s more sophisticated and a different sort of outcome.
“It’s not just dollars like you’re seeking to maximise profits in the corporate world, it’s not just satisfying the owners or shareholders of an organisation, it’s maximising the outcomes generally and also satisfying the NFP variety of stakeholders.”
According to the Australian Institute of Company Directors, directors do not need to be experts in financial reporting but should be applying appropriate expertise and ensuring due process is sound and all elements have been tested.
Directors of a board should have the financial literacy across the sector for effective use of limited resources. Ideally, this means staff are familiar across a number of fast emerging skills, such as data, communication, funding and law.
Clifford said there are skills from the for-profit sector – including corporate and legal – that can be transferred over and used to operate a successful NFP.
“Personally, I think the sorts of skills that I’m talking about are to be commercial and pragmatic, to be driven by outcomes, bringing the best out of people, communication and advocacy, thinking outside the square and energy.”
He adds that these skills are useful when focusing on the financial aspects of running an NFP. Strengthening the financial components of running an NFP is a key skill that organisations can use to ensure a long-term future.
“I’m not saying the sector doesn’t have a lot of strengths in that area but I think there is an increasing focus as the years tick by in order to achieve the outcomes and satisfy the funders,” Clifford said. “This means that there is an increasing scope for those kinds of corporate skills to bring to the sector.”
Liska Turner, Executive Consultant at Beaumont People – a recruitment specialist used by NFPs – said that with the move to a market style economy, NFPs cannot deliver the proper services if their staff aren’t adequately trained.
“An NFP CEO needs to understand that they are a business delivering on business outcomes,” Turner told Third Sector. “That’s not new, but I think there’s a little bit more finesse around how that is done.
“Then there’s that balance between growth for growth’s sake and understanding what you’re actually asking people to deliver.”
Clifford said that due to the complexity of the NFP sector, it’s important that NFPs have a board with a variety of skills than a corporate board.
“You need to have someone who understands, in our case, the education sectors importance, strategy importance, funding importance, the regulatory regime is important and the NFP sector,” Clifford said. “You basically need to have directors who are carrying all these areas.”
Infoxchange CEO, David Spriggs, told Third Sector about the importance of digital skills in an NFP, particularly from its board and executives, as “technology is no longer an option for not-for-profits” and “it’s more critical than ever.”
“One of the recommendations we often make is that not-for-profits get someone with technology experience onto their board,” Spriggs said.
“That’s not to get in the operation side of how to roll out technology solutions but it’s so you’ve got someone on your board who can ask the difficult questions about the use of technology and why it’s not being used if that’s the case.”
On top of adjusting to emerging skills, NFP leaders should also be prepared to invest in the mission of the organisation. Clifford said you need a “big heart” to lead.
“If you’re passionate about what you’re doing, it doesn’t matter that we’re perhaps not as well paid as the corporate world. But you need that passion.”