The figure has reduced from 36% in 2015 to 29% in 2017, according to a report on the results of the survey conducted by Good Foundations.
The report suggests that lack of internal investment and capacity building may be driving this response, as only 14% of respondents believe that the sector invests adequately in itself. This is not unexpected, says the report, given the limited pool of funds and the focus supporters place on implementing projects or programs. The report also posits another factor – leaders who lack adequate business investment skills to determine the right level of internal investment for maximum return and outcomes.
The report suggests possible areas of internal investment as governance (76% said the key issue affecting effectiveness is poor board composition), collaboration (only 53% said they are collaborating with other in the sector), leadership, people (retaining good staff is an issue for 63% of respondents), and technology (the second most common area lacking adequate investment after people and infrastructure).
As in 2015, most funding comes from government (45% up from 41% in 2015) with only 4% from trusts and foundations (down from 8% in 2015) and 4% from major gifts (down from 7% in 2015). Donations from the public were also down, at 10% in 2017 compared to 16% in 2015.
“Charities must focus, improve effectiveness and become more strategic about other fundraising to manage this reliance on government funding. In relation to fundraising it is not just about large public appeals or events. It is about aligning the strategic aims of the charity with the key needs of the public or a specific donor,” commented Rosalie Wilkie, Social Impact partner at PwC in the report.
Impact may be the buzzword of the sector but only 44% of respondents said they regularly assess the impact of their programs and implement learnings from them, while 92% of survey respondents believe being well-run has a strong correlation with delivering more impact.
The report acknowledges that while it is difficult to establish a direct link between capacity building and increased social impact, it argues that as evidenced by for-profit organisations that use a return on investment (ROI) measure to select investments, improvements in frameworks for measurement will surface as more not-for-profits address making sound internal investments.
“The sector needs to start having the right conversations with supporters and the public to re-orientate their thinking to delivering results and outcomes rather than focus mainly on operational costs. Another dollar spent on another inefficient program is just another dollar wasted,” concludes the report.
2017 Well-Run Not-For-Profit survey is conducted by Good Foundations. According to the report on the results, The foundations of a well-run not-for-profit: Why internal investment is critical, 360 people from the not-for-profit sector, the majority in leadership roles, responded to the survey. To read the full report go here.