Fulfilling your organisation’s passion and purpose or saving your organisation: Are they mutually exclusive? Presenter: Dr Joanne Redburn

Passion and Purpose advancing education run a school for disadvantaged youth Public benevolent institution Providing support to sight impaired children Peak body advocating for the dental industry Organisation Financial grant monies donations accumulated funds investments Operations leased premises accommodation employees volunteers advancing sport local hockey club

Purpose: support sick children Activity: accommodation services # of rooms/ facilities Board decision: Does the organisation extend its services to sick adults? maintenance Government funds tax compliance Scenario: The local hospital closes its pediatric oncology department. The organisation predicts a downturn in the number of children (and their families) requiring accommodation services. Operation: Financial: employees Government Contract Compliance

Purpose: support sick children Activity: accommodation services Does the board fulfill it purpose OR save the organisation: not mutually exclusive maintenance Government funds tax compliance Operation: Financial: employees Government Contract Compliance

What is Sustainability? The ability or capacity of a NFP to be maintained or to sustain itself. Utilising resources in a way that will not jeopardise fulfilling the organisation’s purpose. At its core, NFP sustainability means that the organisation will be able to service the need to the community and fulfill its commitments to stakeholders.

What is sustainability? Financial sustainability Operational sustainability

Do directors have duty to ensure the sustainability of the organisation? Duty to exercise care, skill and diligence Statutory and contractual obligations

NFP Sustainability Index Financial Operational Not sustainable sustainable

Scenario: The organisation has developed an innovative device that will reduce pollution. Board Decision: Whether it will approve the expenditure of accumulated funds to commercialise the device.

Issues for the board to consider Does the board have the power to use the funds on Commercialisation? Will the use of the funds affect the organisation’s tax exemption? Will the commercial activity risk the organisation’s registrations? Will the commercial activity pose a commercial risk to the organisation? Will the commercial activity pose a legal risk to the organisation?

Financial Operational Does the board have the power to use the funds on Commercialisation? Will the use of the funds affect the organisation’s tax exemption? Will the commercial activity risk the organisation’s registrations? Will the commercial activity pose a commercial risk to the organisation? Will the commercial activity pose a legal risk to the organisation? SUSTAINABLE

Scenario: The organisation has started negotiations with another organisation to merge. Board Decision: Whether it will approve the merger (subject to member approval).

Issues for the board to consider Does the board have the power to use the funds on the merger? Will the use of the funds affect the organisation’s tax exemption? Will the merger affect the organisation’s registrations? Will the merger pose a commercial or legal risk to the organisation? Will the merger impact on the organisation’s reputation?

Financial Operational Does the board have the power to use the funds on merger? Will the use of the funds affect the organisation’s tax exemption? Will the merger affect the organisation’s registrations? Will the merger pose a commercial or legal risk to the organisation? Will the merger impact on the organisation’s reputation? NOT SUSTAINABLE

Questions?