Australian Institute of Company Directors (AICD): What is the biggest challenge facing the not-for-profit (NFP) sector?
Dr Justin Koonin (JK): Financial sustainability is a major issue and we've talked about it in the past, but it doesn't go away. A lot of not-for-profits are operating under very tight financial circumstances and don't have certainty in their funding. Longer term funding arrangements would make a huge difference to improving the financial sustainability of organisations in the not-for-profit sector.
AICD: How should organisations approach developing and strengthening their culture?
JK: I think culture's not static. Sometimes an organisation's culture needs to change, and that includes the culture of the organisations that I have worked in and do work in. It's important to have policies and documents and codes of ethics and all of that because you can fall back on them, but that's just the start. I think it's important from the board level to set an example of the sort of culture the organisation needs to take, but I also think it's important for cultural change to happen from the ground up, for individual volunteers or staff members of an organisation to feel empowered to be part of that cultural change and I think when you get this impetus, both from the top down, as it were, and from the bottom up, that's when an organisation's culture can change.
AICD: What role does risk play in the work NFPs do?
JK: I think if we didn't take on risks, we couldn't achieve the organisational objectives that we seek too. ACON was formerly known as the Aids Council of New South Wales and one of our key goals is to end HIV transmission among gay and homosexually-active men in New South Wales. In order to do that, you need to talk in the language, which affected communities will understand and relate to. So we talk about sex, we talk about drugs, we talk about alcohol and whatever we do, there are going to be people who don't like what we do.
We know that we're going to find ourselves on the front page of the newspaper, but we couldn't achieve what we wanted to unless we took those organisation and reputational risks. So I think it's important to see risk not as something bad that has to be avoided at all costs, but rather as a currency, something you need to trade in order to reach your goals.
To read more on culture, risk management and financial sustainability in the NFP sector, download the AICD’s 2017 NFP Governance and Performance Study.