During the pandemic, one sector that has suffered dramatically has been not-for-profit. Those organisations that relied on events or fundraising activities that simply do not work with social distancing have had to pivot and look at innovative ways to keep moving forward. This has been a global challenge for the sector. So, what should advisors be thinking about when talking to their clients?
I recently had a virtual meeting with expert advisor to the sector and Sage Finance Futurist, Nunzio Giunta. Based in Brisbane, he is the Founder and Principal of Giuntabell Pty Ltd with more than 25 years of CFO experience focused on making not-for-profit organisations successful.
With degrees in economics and accounting, Nunzio has an extensive track record of implementing robust financial systems, building effective risk management frameworks, and stimulating strategic thinking to assist the C-suite and Boards with making well-informed decisions. We talked about the challenges facing the not-for-profit sector in Australia, what organisations should be focussing on and how to build a sustainable practice within the sector.
The Impact of the Pandemic
Whilst Australia and Brisbane in particular have not suffered the same extensive lockdowns as elsewhere in the world, the not-for-profit sector has definitely faced similar challenges. Nunzio describes a 2 Speed effect; those that had strong financial reserves and those that are struggling. Whilst Government stimulus has been very helpful, as this starts to taper off, Australian organisations will have to look at their strategies now and into the future.
As Chair of the Australian CPA not-for-profit committee, he has been working not only with his clients but advising more widely on how to implement sustainable strategies.
For those that have strong financial reserves, it is about looking for the opportunities that will inevitably come, consolidating their position and also looking to help struggling charities that may need additional support.
For those struggling, he suggests that now is the time to look for strategic partnerships or transferring services to stronger organisations.
It is all about understanding the financial and strategic position and putting together a sustainable plan that can either drive growth or ensure survival.
Creating a value proposition when operating in the not-for-profit sector
One of the key challenges in advising the sector is pricing. Many firms have historically avoided working with charities as they could not build a credible and appropriate pricing model. Nunzio explains that he has used Value Based Pricing. What is the value to the organisation, what difference can you make and how quickly?
When working in the sector, it is vital to recognise that many of the trustees or volunteers may have little if no financial experience. He suggests that advisors must provide information in a format that is easily understood by non-accountants and is useful in the decision-making process, both operationally and strategically.
He also moved his business away from hourly rates with none of his team tracking time, something that would scare many a partner in an accounting practice. Every aspect of a client relationship is then focussed on how to add value to a client and fees are based on this.
Building sustainable relationships
Whatever sector you’re operating in, the key is to marry experience with innovation. By doing this you can work with clients in a way that adds value to their businesses and the ongoing relationship.
Nunzio has decades of experience in the not-for-profit sector, and it is clear that there will be little if any areas that he has not faced over the years. He goes further suggesting that he often knows the challenges an organisation is dealing with before he even speaks to them based on his network of contacts.
This network and his work for the Australian Tax Office and Accounting Standards Board give him both the technical and commercial skills to support organisations in the sector.
From talking to Nunzio and discussing his business model, it is clear that a finance futurist does not have to be an app-toting, jean wearing techie, but can also be someone with a wealth of experience who understands the need to develop sustainable and value added client relationships.