Not-for-profits are not funded for their “true” costs, finds new research, with unfunded indirect costs stifling their operations and impact.

    The AICD is seeking expressions of interest from Aboriginal and Torres Strait Islander members to join its Reconciliation Action Plan Working Group, a critical part of AICD’s ongoing commitment to reconciliation.

    The working group is ultimately responsible for the development, implementation, and reporting phases of the RAP including:

    • To scope and reflect how AICD can contribute to reconciliation
    • To build an understanding of AICD’s Aboriginal and Torres Strait Islander stakeholders and sphere of influence
    • To provide guidance and support in development, implementation and evaluation of the RAP.

    Nine Australian NFPs opened up their books to analysis by Social Ventures Australia (SVA) and the Centre for Social Impact (CSI) to better understand which funding gaps are having the most significant impact on an NFP’s capacity for resilience and effectiveness. The research participants ranged in size from $100m to $100,000 in annual revenue, operating across arts, disability, and family services sectors.

    The new research seeks to understand whether a US phenomenon — the “non-profit starvation cycle” — applies to Australian NFPs and to investigate if there is an evidence base to support changing the practice of funders. The Paying what it takes: Funding indirect costs to create long-term impact report says a key driver of NFP vulnerability in the US is insufficient funding of “indirect costs” such as HR, IT and finance.

    The nine NFPs analysed had average indirect costs of 33 per cent of their total expenses, with a range of 26–47 per cent. SVA/ CSI say this could be severely underestimated as NFPs may seek to downplay their true indirect costs in order to appear more attractive to funders.

    “Every organisation spoken to said they had difficulty funding the true costs of what it takes to deliver impact. Most believed they were underinvesting in indirect costs, and several acknowledged they underreported their direct costs to funders in order to win funding. By contrast, funding agreements often only included indirect costs of between 10–20 per cent of overall costs. A significant proportion of NFPs stated they underreported their indirect costs to funders due to a pervasive belief that funders are unwilling to fund more than 20 per cent of indirect costs.” The shortfall is driven by funders’ “inaccurate expectations of how much overhead is needed to run a not-for-profit”. SVA/CSI found that as a result of US research, a long-running campaign is active to change perceptions of overheads by philanthropists and government. “This campaign has been taken up by a number of influential funders, and contemporary practice in US philanthropy is moving towards a more full-cost approach to funding.”

    In an interview, an anonymous small NFP told researchers: “Funders want good financial systems and governance, but aren’t willing to pay for it.”

    This disjunct occurs despite what researchers say are significantly lower indirect costs than businesses. “For-profit organisations are able to spend as much or as little on indirect costs as is deemed appropriate for their organisation. Companies under $1m in revenue, for example, spend on average 48 per cent indirect costs, not including research and development,” the report found, leveraging income statement data on macrotrends for the likes of Apple, Microsoft, Amazon, Facebook, Google, and Tesla.

    The report makes recommendations on how to harmonise definitions of indirect costs. The findings were based on: a review of Australian and international research, financial analysis, NFP case studies, interviews with NFP leaders, philanthropic funders and other sector participants.

    In a few weeks, almost 25 per cent of Ukraine’s population of 44 invasion. According to UN High Commissioner for Refugees, about four million refugees crossed borders into neighbouring countries, and some six million have been forced to move inside Ukraine. The inter-million has been uprooted, forced to flee in the face of the Russian agency Regional Refugee Response Plan combines UN, NGO and other partners to support host country governments in ensuring safe access for refugees and third-country nationals fleeing Ukraine.

    Australia Day Honours list 2022

    AICD congratulates these members who were recognised in the 2022 Australia Day Honours.

    Australian Capital Territory

    Kathryn Campbell AO CSC GAICD
    Major General Susan Coyle CSC DSM AM GAICD
    Justine Curnow PSM MAICD
    Gavin Duncan AM MAICD
    Martin Fisk OAM GAICD
    Rear Admiral Jaimie Hatcher AO MAICD
    Vanessa Holben PSM MAICD
    Grant McFarlane AM MAICD
    Peter McGrath AM FAICD
    James Murray CDS GAICD
    AVM Catherine Roberts CSC AO MAICD
    Dr Katherine Tindall CSC MAICD

    New South Wales

    Rachel Argaman OAM GAICD
    James Badgery AM MAICD
    Clinical Associate Prof Catherine Birman OAM GAICD
    Dr Deborah Cockrell AM GAICD
    Kate Cole OAM GAICD
    John Dobson OAM FAICD
    John Donnelly OAM MAICD
    Prof Dominic Dwyer PSM GAICD
    Christopher Field AM DSC GAICD
    Dr Matthew Gray OAM FAICD
    Rachel Grimes AM GAICD
    Kelly Haywood CSC AAICD
    Dr Geoffrey Herkes AM MAICD
    Roderic Holliday-Smith AM FAICD
    Jane Jose OAM FAICD
    Dr Alice Killen AM FAICD
    Stephen Loane OAM MAICD
    Stephen Macliver AM FAICD
    Col Eric Modderman CDS GAICD
    Paul Murnane AM FAICD
    Dr Helen Nugent AC FAICD
    Nicolas Parkhill AM AAICD
    Joseph Rizk AM MAICD
    Dominique Robinson OAM GAICD
    Prof Saxon Smith AM GAICD
    Jane Spalding AM CDS GAICD
    Jennifer Thompson OAM GAICD
    Braddon Wheeler AM GAICD

    Northern Territory

    Matthew Hollamby APM MAICD
    Annette Roberts AM GAICD


    Dylys Bertelsen OAM MAICD
    Jo-Anne Bragg OAM MAICD
    Helen Darch OAM MAICD
    Dr Margaret Kay AM GAICD
    Robert Millar OAM FAICD
    Prof Bradley Murphy OAM AAICD
    Mark Sheridan OAM MAICD
    Edward Smeaton DSM GAICD
    Patricia Thompson AM MAICD
    Dr Elizabeth Wilson AO FAICD

    South Australia

    Jane Doyle OAM GAICD
    Stephen Hains AM FAICD
    Prof William Heddle RFD AM GAICD
    Kathryn Presser AM FAICD
    John Schumann AM GAICD


    Ian Sauer OAM AFSM GAICD


    Dr Susan Barrell AO GAICD
    John Coppock OAM FAICD
    Mary Dawes OAM GAICD
    Michael Debinski OAM FAICD
    Anthony Dodemaide OAM GAICD
    David Gregory OAM MAICD
    David Haintz AM FAICD
    Allison Jenvey OAM GAICD
    Victoria Marles AM FAICD
    David Shepherd OAM MAICD
    George Stamas AM MAICD
    Mark Wootton AO MAICD
    Edmund Wunsch CSC GAICD

    Western Australia

    Dr Susan Boyd AM FAICD

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