1. Project PINK SANDS Research Findings (PROOFREADING DRAFT PART 2 OF 2) March 23, 2005 Highly Confidential Ian Macdonald-Smith

2. Today’s discussion of research findings The context Stakeholder feedback - Quantitative Trends Stakeholder feedback - Qualitative Next steps

3. ‘Anglo Saxon’ comparators UK Canada US Bermuda Australia

4. Trends 1 Government retreat 2 Rising profile of the ‘Third Sector’ (exception Australia) 3 Convergence among sectors 4 Advocacy marginalized (exception Australia) 5 New funding regime 6 Greater emphasis on market models 7 Focus on accountability 8 Demand for donor designation 9 Changing donor and volunteer base

5. Trends 1 Government retreat Devolution of responsibility by the state to lower levels of government and non-governmental organizations Consequence of globalization with a focus on competitiveness and deficit reduction Increased focus on government efficiency and deficit reduction

6. Trends 2 Rising profile of the ‘Third Sector’ (exception Australia) Greater utilization by government bodies of both non profits (NPOs) and commercial organizations in implementing public policy and social programs Significant increase in the number and types of non- governmental organizations Inclusion of NPIs (non profit institutions) as a separate category in the System of National Accounts

7. Trends 3 Convergence among sectors An aggressive business sector and a wide array of nonprofit organizations are engaging in activities that increasingly blur the lines of private/public responsibility (e.g. competition for the provision of social services) New hybrid organizational forms such as universities that are owned by the state but draw funds from private sources and revenue from the sale of services to industry New forms of private/public partnerships

8. Trends 4 Advocacy marginalized (exception Australia) Nonprofits much more circumspect in their advocacy and public education work Fear of loss of funding

9. Trends 5 New funding regime Ongoing reductions in government funding Shift from a core funding model to a project-based funding model Greater competition for funding Increased targeting of funds Greater emphasis on partnering, collaboration Diversification of funding sources

10. While individual and corporate donations make up 40% of revenues for Bermudian charities, in other countries fees and charges account for the bulk of their revenues. Charities’ Total Revenue by Source by Country* (% of a total non-for-profit revenues) * Figures are based on most recently available data, 2005 for Bermuda, 1999 for Canada, and 1995 for US and Australia Sources: “Global Civil Society: Dimensions of the Nonprofit Sector,” 1999 John Hopkins Center for Civil Society Studies; “Satellite Account of Nonprofit Institutions and Volunteering, 1997-1999,” Ottawa: Statistics Canada ; Urban Institute Survey of Charities in Bermuda 2005; Maio&Co analysis.

11. Trends 6 Greater emphasis on market models Focus on efficiency at the expense of “community good” IT capabilities – prospect of a digital divide The ‘Myth of Volunteerism’ Nonprofits and for-profits in direct competition with each other User fees Increased emphasis on credentialization and professionalism Evaluation

12. $0 – $29,000 Size distribution of charities in Canada % Source:Michael Hall, (2003) “Cornerstones of the Community: Highlights of the National Survey of Nonprofit and Voluntary Organizations,” Statistics Canada. % of organizations % of total revenue Annual revenues, 2003 $30,000 – $99,000 $100,000 – $249,000 $250,000- $499,000 $500,000 – $999,000 $1 MM – $9.9 MM Over $10 MM

13. Trends 6 Greater emphasis on market models Focus on efficiency at the expense of “community good” IT capabilities – prospect of a digital divide The ‘Myth of Volunteerism’ Nonprofits and for-profits in direct competition with each other User fees Increased emphasis on credentialization and professionalism Evaluation

14. Trends 7 Focus on accountability Disproportionate emphasis on accountability to funders Onerous reporting requirements Code of Ethics development and implementation SOX and its impact on nonprofits Charities as vehicles for facilitating terrorism Fears about unscrupulous fundraising practices

15. Trends 8 Demand for donor designation Donor designation of charitable contributions Inception of commercial donor-advised funds Impact on allocation of charitable dollars

16. Trends 9 Changing donor and volunteer base Globalization = divided loyalties and community detachment Corporate giving driven by reputational issues rather than need Declining incidence of charitable contributions and volunteering by corporations and individuals

17. Changing nature of NPOs Government Private Non Profit Organizations From Government service To SubsidyPOS “Charity” Account- ability Full competition Business model Shrinking profile of government Rise of business “culture” Private artsPublic/NPO “Down Under”