The Treasurer’s ChallengeSocial Outcomes and Financial Responsibility

Glenn PooleExecutive in Residence

The Australian Centre for Philanthropy and Nonprofit Studies

7th Australasian Better Boards Conference – Melbourne5 July 2013

Advice to the first Governor of Queensland - 1859

“Let your thoughts never be distracted from the paramount object of finance.

All states thrive in proportion to the administration of revenue……”

Sir Edward LyttonBritish Secretary to the Colonies

The Treasurer’s ChallengeSocial Outcomes and Financial Responsibility

For reflection ……….. – Does a good treasurer need more

than good accounting and financial management skills? …. And..

– What value can a treasurer add to the organisation in achieving its mission, apart from a focus on the numbers?

An outline

• Identifying changes that have occurred in the operating environment for NGOs,

• Discussing the impacts of these changes particularly on the treasurer’s role,

• Suggesting new areas and activities where the treasurer can add value,

• Looking at emerging challenges that will change and shape the expectations of treasurers.

Changes to the NFP world

• 1980s – Government funded basic services– NFP identified service gaps

• 1990s– “Gaps” became mainstream – government

funding & reporting increases

• 2000s– Government outsourcing

– 2006-07 - $25.5bn in government funding to NFPs

Impact of change on NFPs & treasurers

• Interest from professional & community bodies• Academic research• Government agency advice• Increase in NFP organisations relying on a high

proportion of funding from government• Increased accountability expectations• Broader accountability expectations• Measurement & reporting of outcomes• Measurement & reporting of social impact

Impact of change on NFPs & treasurers

For-profit vs Nonprofit governance

– NFPs 'mission' driven, not 'profit' driven. No one way to measure achievement of mission.

– NFPs have multiple, critically important stakeholders with conflicting primary interests

– Many NFPs are small but face accountability standards drawn from large 'for profit' regimes

– NFP boards / committees are generally voluntary

– NFP boards / management committees are generally under-resourced.

Recent academic research on boards

Nonprofit Management & Leadership journal [2012]

– Intra-board dynamics

– Social capital

– Board members & networks

– Internal leadership dynamics

– Board performance

– Self-assessment diagnostic tool on team effectiveness

Developing Your Board - self-evaluation

Key diagnostic elements -

Membership Role clarity Composition

Feedback Expectations Support mechanisms

Peer support Processes Relationships

Personal Development

Other research

– Increased social capital a positive contributor to board performance

– Social capacity improves information sharing, reduces conflict, alienation & turnover

– Passion & engagement of NFP board members

– Treasurer’s relational skills critical in board team dynamics & performance

The emerging challenges for treasurers 

CSIRO – six mega-trends• More from less• Going, going ....... gone?• The silk highway• Forever young• Virtually here• Great expectations

Conclusion

• Today’s treasurer is more than a financial guru

• Community & government expectations for reporting on outcomes & social impact

• Treasurers can adapt skills in measurement & reporting concepts

• Application of relational abilities important in managing accountability demands

• More relationally aware treasurers = better boards = better organisational performance = improved social impact