Now, more than ever, Australians are looking at how they can contribute to the Australian charity sector, which is a great outcome in such challenging times. We have had conversations during this time with those seeking to find their own purpose – their ‘why’.
They are also keen to understand more about the sector – what does ‘for-purpose’ mean and who are beneficiaries, among other questions.
To support your own Personal Impact Journey, we have developed this tool to guide you to on how best to network or engage with the for-purpose sector.
The Australian for-purpose sector is diverse and larger than some may think, with over 57,000 registered with the Australian Charities and Not-for-profits Commission (ACNC), and some 500,000 others that are not registered for deductible gift recipient (DGR) status. Organisations range from small family charities to large international humanitarian agencies and address a wide variety of needs in our society, including health, education and protecting the natural environment.
1. It is about impact, not activity
Often reports in the media describing how successful organisations are reflect measures from profit to shareholder return to and many other activity-focussed outputs. In the for-purpose sector we prefer to measure our success through the lens of social impact, i.e. families housed, education outcomes achieved – in essence, what improvement has this organisation made to their beneficiaries/ community/ partners? Look at a theory of change model, also known as program logic, from a charity you admire. These models provide a framework for defining the problem, the resources and activities required, to achieve an output, but most importantly, the outcomes they desire. Every for-purpose organisation should have a theory of change as it tells their story.
2. Beneficiary centricity
The complexity of stakeholders in the sector needs to be understood. The focus of any charitable organisation must be beneficiary centric, so their activities benefit the needs of those they exist to serve. All for- purpose organisations exist to solve a social or environmental problem and the beneficiary MUST remain at the centre. An interesting thing to note is that often this is not who pays for the activity. E.g.: the survivor of domestic violence does not pay for accommodation, perhaps the cost is shared between government and individual donors, but it is the survivor whose needs must be met.
3. The importance of language
Language is one of the most powerful communication tools we have, and the way we use it can have a profound effect on how we connect with the for-purpose sector. Stakeholders and beneficiaries, not shareholders. Impact, not profit. Income, not revenue. Familiarise yourself with the language used by the organisation you are looking to contribute to, so you can demonstrate you align with them and understand the impact they want to deliver.
4. The importance of language
The purpose of charities is to benefit the public, and their contribution to our society is vital, and as a result the sector has its own unique regulatory environment. Whilst the organisations in the sector are subject to the same governance expectations as the corporate sector, the ACNC is the national regulator of charities. There are also a variety of tax concessions, investment structures and funding models specific to the sector. For more information on the regulatory environment please visit: www.acnc.gov.au
5. Funding and investment need to be understood
As the for-purpose sector is not able to access capital in the traditional ways that corporations can, they raise funds in a variety of ways, including fundraising, fee-for-service work, membership fees, grants, corporate sponsorships, or partnerships, running opportunity shops or selling items. There are constantly evolving, and more modern approaches being developed all the time. These include social investment or social impact investing including bonds, crowdsourcing and micro-financing, and campaigns through social media and digital tools. As these approaches mature and are understood more widely, they can be leveraged to bring investment and capital to the sector to drive greater impact, whilst providing return to investors.
To retain their not-for-profit status, charities need to ensure they their fundraising goes towards furthering their charitable purpose, particularly if there is a commercial element involved.
6. Understanding the themes and trends
As the environment changes around the globe, so too must the sector and the way it operates. Whilst in the past there have been some, well meaning, competitive influences that have meant there are many smaller charities existing in what may seem a similar field, in the future, especially post covid, we will likely see stronger collaboration across industries, and the sector more broadly. We may also see mergers happen more frequently, as they become increasingly relevant, and this tendency towards cross sector collaboration will enable efficiencies and drive greater social outcomes.
