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Are the next generation of leaders ready?

26 Mar 19

How will Australia’s tidal wave of generational change will affect leadership in the nation’s charity sector, writes Community Sector Banking CEO Andrew Cairns. 

Generational change and its potentially negative effect on not-for-profits is a hot topic. Many worry the ageing of Australia’s traditional donor base will drastically shrink donations, a key source of income for the nation’s more than 52,000 charities.

However, there is a bigger question that needs urgent discussion. How will Australia’s tidal wave of generational change affect leadership in the nation’s $129 billion charity sector?

Have our not-for-profits adequately developed the next group of leaders who will step up once baby boomers retire?

Given not-for-profits employ one-in-10 Australians and provide vital services from the city to the remote outback it’s a pressing question.

We know good leadership works. It is essential to driving strategy, retaining employees, responding nimbly to changing environments and ensuring the all-important trust of donors, governments and clients remains high.

Excellent leadership nurtures efficient yet thriving organisations – crucial in the not-for-profit sector where how every cent is invested matters.  

Research from a US study found that 86 per cent of companies with strategic leadership development programs were able to respond rapidly to unpredictable business environments – much more than the 52 per cent of companies with less mature leadership programs (source: Centre for Creative Leadership).

With Australian not-for-profits facing changed patterns of giving from donors and shifting dedication to volunteering from the general public, they certainly are heading into an unpredictable environment.

The time for government, not for profits and funders to step in and ensure the next generation of leaders in the charitable sector are not just ready to lead but ready to excel at leading is now.

Funding leadership development will reap huge benefits for all Australians.

The sector accepts donations totalling more than $12.5 billion a year (based on 2015-16 figures). Four out of five Australian adults donate to charity and therefore arguably have a financial interest in seeing not-for-profits flourish.

For those not giving cash to charities, they are more often than not providing their time – contributing to the 328 million unpaid volunteering hours performed in Australia each year that have a commercial value of about $12.8 billion (if wages were paid for time given).

The size of the sector is often underappreciated. Collectively, it is roughly the size of the Australian retail industry, the education and training economy or the public administration and safety sector, according to Deloitte Economics’ report: Economic Contribution of the Australian Charity Sector.

One way we’re investing in the future of not-for-profit leadership is through the well-known Churchill Fellowship program, which has been helping to strengthen the Australian community since 1965.

Every year about 100 Australians from all walks of life are awarded a fellowship. The generous funding supports them to travel overseas for four to six weeks to investigate a topic and observe inspiring practice in a wide field of endeavours.

Applications for the next round of fellowships open in February and close in mid-April.

Community Sector Banking will be supporting two fellowships to further explore leadership in the not-for-profit sector; one to identify successful approaches to developing leadership, people and culture that position the not-for-profit sector for future challenges, and a second for Aboriginal and Torres Strait Islander people to investigate ways in which relationships between Indigenous peoples and communities and the not-for-profit sector can be mutually beneficial. 

These fellowships are a fantastic opportunity for not for profits to investigate how changing demographics and donor patterns could impact their organisations while providing leadership opportunities through study. They’re also a chance to examine how similar countries are addressing these issues, and how we can draw on relationships and lived experience to strengthen our organisations.

I encourage staff of not-for-profits to apply. As we watch the changing of the guard of managers in not-for-profits, we need to ensure the next generation of leaders is ready.

 

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