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NFPs place in Society & Economy Better Boards Conference 2012 Melbourne

NFPs place in Society & Economy Better Boards Conference 2012 Melbourne. Les Hems Director of Research Centre for Social Impact . The Centre for Social Impact. An independent research centre & “do-tank” Collaborative DNA – 4 university partnership

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NFPs place in Society & Economy Better Boards Conference 2012 Melbourne

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  1. NFPs place in Society & EconomyBetter Boards Conference 2012Melbourne Les Hems Director of Research Centre for Social Impact

  2. The Centre for Social Impact • An independent research centre & “do-tank” • Collaborative DNA – 4 university partnership • Operates at the intersection of the 3 sectors. • Strategic engagement with: • Wide range of not-for-profit organisations & social enterprises • Commonwealth, state and local governments • Corporates including Macquarie Group Foundation, PwC, NAB, Stockland, JBWere, Corrs Chambers Westgarth • Focus on social innovation / entrepreneurship / enterprise / finance / impact • Focus on evidence & measurement.

  3. The question (and assumptions) How can NFP boards, CEOs & senior managers develop & deliver their mandated mission? • NFPs contribute significantly to society & the economy. • NFPs are not fulfilling their potential. • Many NFPs can be described as “permanently failing organisations” – complex /unachievable missions - where there is market & government failures. • Many NFPs operate at the intersections with government and corporates to address these failures. • NFPs are “interdependent”: • NFPs are an integral part of Government strategies – ‘Third Way’, ‘Big Society’ • NFPs increasingly part of corporate journey of ‘Creating Shared Value’ – economic and social value.

  4. Context: Seven transformations • Not-for-profit organisations: From grant dependence to long term sustainability through social enterprise (core / ancillary) • Government: From short term activity/output driven procurement to long term outcome based commissioning – “payment by results / for success” • Government & NFPs: shift in focus to early intervention and breaking the cycle.

  5. Context: Seven transformations cont’d • Individuals: From philanthropy to social impact investing • Private and institutional investors: from single purpose economic return to blended return. • Corporates: shift from short term shareholder value to long term creation of shared value. • Financial Innovation: Financial mechanisms that blend commercial & social returns e.g. Microfinance & social impact bonds .

  6. To answer the question • Systematic re-focusing NFPs on delivering social impact: • Delivering long term social outcomes • Finding out what works • Investing in what works • Organisational mission sits within broader concept of social impact • This requires a shift away from the focus on inputs & activities – securing funding & operational fire-fighting.

  7. What is the role of the board? • The stereotypical board focuses on compliance and probity, holding management accountable. • Increase time spent on ‘strategy’ • Are our activities the right ones to achieve social impact? • Is this organisation best placed to achieve social impact? • Strategic management expertise (AICD/CSI Study 2011) - but directors want to spend more time and say their boards need more strategic managementexpertise. • Need to work more closely with CEO and senior management on strategy - board needs to own strategy.

  8. The barriers • Time - board time (exec & non-exec boards - pay trustees?) and CEO time (organisation structure, manager education & training). • ‘Confidence’ to shift effort & resources from short term to mid & long term – recognition of the value of investing in strategy (& R&D). • Access to expertise - strategic analysis - corporate and NFP specific expertise. Board members & the role of consultants / research centres. Directors are the first line of regulation. Will new NFP regulation increase amount of board time spent on compliance?

  9. What do we need? • Intelligence - strategic analysis requires intelligence, knowledge, information and data. • Tools, templates and frameworks: • Theory of change – understand current “theory” and how to maximize social impact. • Expert board members and consultants are part of the solution but the solution really needs to be ‘open source’ • Systemic solution e.g. UK ‘Third Sector Foresight’ initiative http://www.3s4.org.uk/ . • An ‘education’ role of ACNC?

  10. Les Hems Director of Research Centre for Social Impact l.hems@unsw.edu.au www.csi.edu.au Twitter @leshems @CSIsocialimpact

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