This month QCOSS releases the Rethinking Resources: Case Studies of Financial Resilience from Community Services report, in which community organisations from Queensland share how they are working to increase their financial sustainability. The strategies they employ include social enterprise, collaboration, merging, fundraising and reducing energy and other overhead costs. Their challenges and successes provide insights and learnings for community service organisations planning to increase their financial independence.
The time is now
There has never been a more important time for Queensland community service organisations to work on improving, and demonstrating, their financial resilience. Given the imminent implementation of the Queensland Government’s Social Services Reform Program, organisations will increasingly be asked to demonstrate the operation of efficient, accountable and sustainable services.
Proactive not reactive
Complacent organisations are not ready to meet the challenges of a changing government funding environment. Organisations that are already working to be less dependent on government are better prepared to adapt in the current and emerging landscape.
Investment (time and money)
In order to discover strategies which will increase financial resilience and yield good results, organisations need to invest. Financial resources are needed to purchase skills, expertise, training, staff time, equipment, tools…the list goes on. One of the biggest investments needs to be in time – staff time to implement and deliver new strategies, and time for strategies to develop and mature.
Leadership and professional development
The need for strong and visionary leadership is another consistent theme from across the case studies. Robust and capable leaders are cultivated through professional development. Valuing professional development means investing in it and creating the space that allows leaders to be devoted to continuous improvement.
Many of the case study organisations highlighted the need to build new relationships in order to attract new resources and take their organisations in new directions. This frequently means reaching out to sectors of the community which an organisation may not have had contact with before. It has been demonstrated in these case studies that there are great rewards to be had when not-for-profits are bold and step outside of their comfort zones.
Rethink, repurpose existing resources
Not-for-profits possess many different resources or assets, such as financial, physical, human, impact and intellectual assets. In planning to strengthen financial resilience, community organisations should audit their assets and capital and look for the opportunities to make them work for the organisation in new and different ways.
Most of the organisations interviewed for this report cited at least (and often more than) 95 per cent of their income came from government contracts. This would be common among many not-for-profit community service providers in Queensland. It is incredibly risky to be so reliant on one revenue stream, as some of these organisations have found. Not-for-profits need to spread the risk by diversifying their revenue streams. Organisations benefit from being proactive in reducing the risk of becoming insolvent if government funding were to be reduced or withdrawn.
Acknowledge the limitations of each strategy
As identified throughout the report, each strategy used by organisations in the case studies has its limitations. It is important to acknowledge that none of these is a silver bullet or miracle pill that cures funding woes. “Look at the realities…be realistic about the expectations you set. This might be one thing you do to help your organisation, but it won’t be a magic bullet,” says Holly Aston, Hinterland Community Development Association of Caloundra.
In many of the case studies, the implementation of the strategies represented a change of direction for the organisation and in some circumstances had a significant impact on staff. Anticipating and acknowledging the realities of change and being prepared to manage the expectations and anxieties of all stakeholders is vital.
Read the Rethinking Resources report for great examples of organisations working to build their financial resilience.