SummaryDocumentforSNOW.docx

SummaryDocumentforSNOW.docx

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SummaryDocumentforSNOW

SMALLNONGOVERNMENTORGANISATIONSWORKINGTOGETHER（SNOW）

THEPROJECT

The‘SmallNon-governmentOrganisationsWorkingTogether’（SNOW）projectwasdevelopedaspartoftheMtDruittCommunitySolutionsandCrimePreventioninitiative.TheprojectwasoverseenbyaReferenceGroupdrawingrepresentationfromgovernmentagencies,localgovernmentandnongovernmentorganisations.TheMetroWestRegionoftheNSWDepartmentofCommunityServiceswasthebudgetholderfortheproject.

Theprojectwasdesignedtoexplorethestrengths,issuesandchallengesfacingsmallernongovernmentorganisations（NGOs）intheMountDruitt/BlacktownareaandtoworkwithsmallNGOsintheBlacktownareatoidentifyarangeofstrategiesthatwouldsupportsmallNGOs,andassistthemindevelopingandenhancingtheirpotential.

Theproject:

∙researchedtheresourceanddevelopmentneedsofsmallNGOs

∙researchedthefinancialviabilityofsmallNGOsandminimumincomelevelsfororganisationsandprojects

∙facilitateddebateanddiscussionbetweensmallNGOsandtheDepartmentofCommunityServices（theSNOW‘Dialogue’）

∙exploredwaysthatsmallNGOscanmakechangesorworkwithoneanother,toenhancetheirviabilityandcapacity

∙identifiedtoolsandresourcesthatcouldassisttheminthiswork

∙identifiedactionthatgovernmentcouldtaketosupportthediversityoftheserviceprovidersector

TheSNOWProjecthasresultedintworeports–themainProjectReport,andareportofthefindingsoftheViabilityResearchProject.TheExecutiveSummaryforeachReportisattached.

ThecontentoftheSNOWreportsandrelatedmaterialisdrawnfromresearch,datacollectionandconsultationsconductedaspartoftheSNOWProject,andrepresentsthefindingsoftheconsultants,BradfieldNylandGroupandtheworkoftheSNOWReferenceGroup.Theinformationprovidedinthesereportsisdesignedtoassistbothnongovernmentorganisationsandgovernmentagenciesintheirrespectiverolesinprovidingcommunityservices.ThecontentoftheSNOWreportsandrelatedmaterialshouldnotbeinterpretedasrepresentingapolicypositionofanygovernmentagency.

ExecutiveSummary

WAVINGNOTDROWNING:

STAYINGAFLOATASASMALLNGO

ReportoftheSNOWResearchProjectintoViability

TheViabilityResearchProjectwasconductedaspartoftheSmallNonGovernmentOrganisationsWorkingTogether（SNOW）Project,andwasdesignedtoexamineincomelevels,resourcemanagementandtheviabilityofsmallnon-governmentorganisations（NGOs）,samplingorganisationsintheBlacktownLocalGovernmentAreaascasestudies.

Inarangeofreportsandcommentariesoncommunitysectororganisations,areoccurringthemehasbeenaconcernfortheongoingfinancialviabilityofsmallNGOsinthefaceofanumberofchangesandpressuresintheirenvironment.ThefactorsthatareregularlycitedasaffectingthesustainabilityofsmallNGOsincludeinsufficientgovernmentfunding,risingcosts,increasedcomplianceandaccountabilitycosts,andtheimpactofgovernmentfundingpolicies,andinparticularthemovetoacontractingor‘purchaser/provider’frameworkforgovernmentfunding.

ThereisnoavailablecurrentresearchintotheactualcoststructuresofsmallNGOs,andthereforenogeneralagreementonviablefundingformulaeforprojectsandservices.Toaddressthis,theViabilitystudycollecteddetaileddatafromasampleof20smallorganisations,ranginginsizefromannualincomesof$80,000to$680,000,includingtwoorganisationsthatwereexperiencingrapidgrowth.Threelargerorganisations（annualincomesof$1.2–1.5million）werealsostudiedforcomparison.TheorganisationswerepredominantlyfundedthroughtheNSWDepartmentofCommunityServices,butoverhalfhadmorethanonesourceoffunding.

Financialviability

Intermsofthecurrentfinancialviabilityoftheorganisations,thestudyfoundthat:

∙Thefinancialsituationoftheorganisationsvaried:

-half（11）theorganisationsappeartobefinanciallysoundandsustainable

-justunderonequarter（4）appeartohaveadequateprovisionsbuthighongoingexpensesthatcouldthreatensustainabilityinthelongerterm

-justunderonequarter（4）appeartohavelimitedprovisionsandcouldthereforebevulnerabletoanysuddenincreaseinoperatingexpenses

-threeorganisationsappeartobestrugglingfinancially

∙Smallerorganisationstendedtobemorelikelytohavelimitedorinsufficientprovisionssetaside.

∙Verysmall（annualincome$100,000orless）organisations,andchildcareservices,werethemostfinanciallyvulnerable,withlimitedcapacitytoensureadequateprovisionsorcontingencyfunds.Inthecaseofchildcareservices,thisisparticularlyduetothelimitationsofgeneratingsufficientfeebasedincometocoverfixedcostsrelatedtostaffingandupkeepofpremises.

Corefunctionsandthe‘backoffice’

Thestudyexaminedthewayinwhichsmallorganisationsutilisedstaffformanagementandcoordination,theextenttowhichadministrationandbookkeepingwereprovidedbyspecialistpaidstaff,andtheprofileofthecurrentuseofinformationtechnologyequipment（IT）andITsupport.

Althoughmostorganisationswithmorethanonestaffpersonhadanidentifiedpaid‘manager’position,mostofthesepeoplealsohadservicedeliveryresponsibilities,andthemostcommonlyreportedconcern,alongwiththerecruitmentandretentionofboardsofmanagement,wastheprovisionofadequateformalsupervisionforstaff（includingthemanager/coordinator）.

Halfthesmallorganisationshadnopaidadministrationstaff,andonlytwohadfulltimeadministrationstaff.However,onlytwoorganisationsdidnothavepaidbookkeepingstaff,withmostoftheorganisationshavingbetween2and9hoursaweekofpaidbookkeeping.Justoverhalftheorganisationsindicatedthattheyneededmorepaidadministration,butonlyoneorganisationindicatedaneedformorebookkeepinghours.

Themajorityoforganisationsdidnothavenetworkedcomputersystems,andmosthadamajorityofmachinesovertwoyearsold,but16of18smallorganisationshadtheiraccountsandpayrollcomputerisedand12usedtheircomputersforclientorservicerelateddatabases.Twothirds（12）oftheorganisationsusedexternalITsupport,butthecostsvariedwidely.

Thesituationforsmallorganisationscontrastswiththatofthethreelargerorganisations,allofwhomhadfulltimepaidmanagers,fulltimeadministrationstaff,andatleastahalftimebookkeeper.Theseorganisationsalsohadcurrent,networkedcomputersystemsandsatisfactoryexternalITsupport.

Coststructuresandminimumincomelevels

Analysisoftheexpenditurepatternsofthesampleorganisations,andsomeadditionalresearchintolocalrentalaccommodation,providedthedataforthedevelopmentofa‘costingguide’forthecoreitemsofanyorganisationalbudget,andinparticularfortheestimationofauspicemanagement,coordinationandadministrationcostsforprojectsbysmallorganisations.

Thisanalysisindicatesthatthereisafixedlevelofmanagementandcoordinationrequiredtorunanorganisation（around12.5hoursperweek）,andthatthetimerequiredasaproportionoftotalstafftimenaturallyreducesastheorganisationincreasesinsize,uptothepointwhereafulltimemanager（withoutanyservicedeliveryresponsibilities）isrequired（around$350,000-500,000annualincome）.

Asorganisationsprogressbeyondthispoint,theproportionswillalteragainastheywillrequireadditionallevelsofmanagementandcoordination–atypicalorganisationwithanincomeof$1.5millionislikelytohave3-4staffprovidingmanagementandcoordination,overtwolevels（CEOandsectionmanagers）.

Thecostingguideprovidesestimatesforthefollowingareasofindirectcostsincurred,andoftenabsorbed,byorganisationsauspicingprojects:

∙Coordinationandmanagement:

8-11%ofstaffcostsor5-7%oftotalbudget

∙Administration:

15%ofstaffcostsor9%oftotalbudget

∙Bookkeeping:

5%ofstaffcostsor3%oftotalbudget

Intotal,thecostsofmanagingaproject,beyonditsdirectcosts,canbeestimatedataround18%ofthetotalbudget.

Theminimumincomelevelneededforthecorecostsofasmallsingleworkerorganisation（thatis,notincludingprogramcostsandtravel）islikelytobeabout$76,000（annual）.Locatingthesameservicewithinanexistingorganisation（asanauspicedproject）theoreticallyprovidessomesavings,andthetotalamountrequiredmaybeslightlyless,ataround$70,000.Theactualcostsofprovidingtheserviceorprogramstillneedtobeaddedtothisamount.

Sharingresources

Inthestudysampleorganisations,themostsuccessfulsharingoccurredwiththesharingofactivityspace（suchasameetingorgrouproom）,sharedofficespace,andsharingtherunningofactivities.However,organisationsalsoreporteddifficultiesandincreasedcostswithsomeresourcesharingarrangements.

Inconsideringcostsandbenefits,itshouldalsoberememberedthatthehighestproportionofcostsinmostNGObudgetsisstaffing（usually55–65%）,andthatspecificitemssuchasrent,insuranceandequipmentindividuallymayberelativelysmallcomponentsofthebudget.

Formanysmallorganisations,stafftimeisafarmorecriticalresource,andthemostusefulwaytomaximiseresourcesandenhanceviabilityistoalleviatepressuresonstafftimeandexpertise.

Intermsofsharedresourcesorservices,thefollowingarelikelytobeofbenefittosmallorganisations:

∙Sharingthecoordination,organisationorrunningofactivities,toreducestafftime

∙Sharingafixedcostitem,wherethecostperorganisationislessthanthecostforoneorganisationtopurchaseormaintainbyi