Despite the time and effort it takes to create a not-for-profit organisation, it takes even more time and effort to ensure that the NFP is not only functioning well but also profitable. While it is noble to start an NFP because of being passionate about a cause, it is important that the NFP is managed well to ensure that it makes a profit and can actually financially make a difference to the cause.

Many organisations are not making a profit. They are either purely maintaining the status quo or in some case, going backwards and losing money. For the organisation to be successful it needs to not only make a profit but remain profitable to attract new funding and supporters to build the organisation.

A recent article by Probono Australia, shares that the 2016 NFP Governance and Performance Study from the Australian Institute of Company Directors (AICD) found that just over half of the organisations studied, believe they will make a profit this financial year with the remaining organisations either breaking even or losing money.

AICD Managing Director and CEO John Brogden, said Not for Profits must aim to be financially strong. “It’s alarming that some directors are saying the capacity of their organisation to meet their purpose will, in real terms, shrink moving forward. Directors and boards need to seriously consider their roles and drive the cultural change necessary to support the long-term financial strength of their organisations.”

From the figures that have been reported in this study, it is apparent that something needs to change in many organisations and those changes need to be made from a management level to ensure the financial viability of the organisation as it moves forward.  If the organisation isn’t profitable, it will struggle to attract new financial input and partners, and therefore the overall success of the organisation will be impacted, possibly to the point of the organisation needing to fold.  That in itself is not a situation or position that many NFP founders would want to occur, so it is vital that they take action and put in place sustainable strategies to ensure the success of the organisation.