Summary, Organisation B

Organisation B’s strong relationship with its funding Ministry has provided the organisation with a growing income and provided, until more recent years, a flexible programming environment in which the organisation could pursue purposes which were closely aligned with, and sometimes in advance of

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during the research period with specialised staff and a more strategic and

reflective approach to programme work. The organisation’s membership has been falling and branch activity declining, There has been a separation in the

governance and management of the organisation and governance has shifted from a model that was representative of branches and also, for a period, of identity, towards one which seeks to draw on the skills of individual members and others external to the organisation. This has created some confusion about the role of branches. In recent years, funding changes have exposed the organisation’s lack of independent funding, forcing the closure of significant programmes and major changes in the way others are run. Government continues to support the organisation but misgivings about direction have spurred the organisation to invest in finding new programme avenues and new funding sources for the future.

8.3 Organisation C

The smallest organisation, newly formed at the beginning of the 1980s, began with a period of founder-led growth which entailed blurred lines between governance and management. This relationship has become more formal over time. The organisation has developed a funding mix which draws on a range of government or government funded institutions, philanthropic trusts, donations and earned income. The number and mix of funders has placed some strain on the

organisation, spurring the growth of administration and professional management. The organisation has attracted staff with a passion for the outdoors and for

working with disadvantaged and troubled youth. It has worked hard to maintain its programme focus over the past twenty five years, particularly against

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has, in recent years, broadened the purpose set out in its constitution to

accommodate a more income-oriented approach. The nature and variability of funding has been a challenge for this organisation.

8.3.1 Management

A number of members of the governing committee formed by the founder of

Organisation C were also the organisation’s first staff. The organisation’s early days were marked by a lack of clarity of purpose as a range of ideas were tested and the general shape of the organisation began to emerge. As funding was acquired and dedicated programme staff were appointed, the founder and board members gradually withdrew from their role. The staff of the organisation were drawn from people with a strong commitment to aspects of its work, particularly its outdoor focus and its social ideals. Some staff have been willing to work for less than they would in other occupations. When contracting became established, staff members became overwhelmed and in the 1990s one staff member negotiated with the Board for paid time to deal with administrative matters. Since then a management hierarchy has developed but the philosophy of the organisation, and its size, have limited this development. By 2010 the organisation had a General Manager, a full time office administrator, programme managers and a marketing manager. Many of the successive general managers have had no experience in the organisation’s work. Many of the staff are part-time, some through choice, but many because of the fixed-term nature of the programmes, and funding restraint. The high-risk nature of aspects of the organisation’s work as well as contract requirements require that staff be skilled professionals.

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8.3.2 Governance

The mixed governance and management roles which existed in the organisation at the beginning gradually gave way to a more formal separation of board and

management. The founder remained a member of the Board, manager of the organisation and a key programme leader for many years and staff were welcome to attend and contribute to Board meetings. Over time the founder withdrew and the board focused more on overseeing staff and policy. The Board has suffered from a shortage of willing volunteers but it has also been careful to choose new board members on the basis of compatibility with the Board values, aims and objectives. It has used external help to develop a more strategic approach over time. There have been concerns about Board skills in more recent years, although selections to the Board continue to be based on values as much as skill. Values play a core part in the life of the organisation with a special committee of the Board dedicated to ensuring that the values are upheld at all levels.

At least one Board member and some staff have promoted a business oriented social enterprise model as a route for the organisation but this direction has been resisted by the founder and other Board members. Some respondents regard the current operation as a social enterprise, however one business oriented former board member identified a range of issues such as lack of organisational flexibility, poor knowledge of the business sector and the primary social purpose of the organisation which are perceived as limiting the organisation’s ability to develop in this direction.

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8.3.3 Funding

Funding was grant-based initially and its flexibility provided the organisation with a great deal of resource during its development period. A range of contract

relationships with government funded organisations developed in the 1990s and, in the 2000s, a partnership with an educational institution provided the

organisation with stable funding for a number of years but it brought with it a range of compliance requirements, including the need for New Zealand

Qualifications Authority (NZQA) accreditation. The cost and stress involved in obtaining and maintaining the qualification was a major issue for the organisation, as was the subsequent loss of funding when the relationship ended. Funding has been an ongoing issue for the organisation as government policies toward young people have changed. Both programmes and purpose have been adjusted to address this situation.

Between 2002 and 2009 the organisation received funding at some point from 17 different government, local government and government funded bodies and 11 different philanthropic trusts of which only one provided more than $30,000. From many of these organisations funding has only been received intermittently. The investment of time and effort, particularly in the relationship building involved in the pursuit of funding, is a major issue for the General Manager. Business funding has been negligible. Figure 8.7 (see also Appendix 11) shows that the total income for Organisation C increased by 282 percent in real terms or 163 percent when adjusted for inflation between 2002 and 2010.

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Figure 8.7. Organisation C: Total income 1996-2010

Source: Organisation C Annual Reports 2002-2010

By the first decade of the current century the organisation had developed a mix of small grants, government contracts and income generating activities to support its work. In Figure 8.8 funding sources have been consolidated into, government derived funding, philanthropic trusts, earned income, and donations to show the general mix of income the organisation receives.

Government funding, assisted by a contract with a local tertiary education provider, has risen by 751percent over 8 years, however the contract finished in 2010. Earned income, which has fallen by 52 percent due to a significant decrease in course fees, has been increased in more recent times by the interest from the Tertiary Education Commission (TEC) contract. This single contract has, in recent years had a strong impact on the organisation. Figure 8.9 shows that the decision to develop this relationship changed the situation in which course fees had formed the greater part of the organisation’s income.

0 100000 200000 300000 400000 500000 600000 700000 800000 900000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Income 2010 value

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Figure 8.8. Organisation C: Income by source 2002-2009

Source: Organisation C Annual Reports 2002-2010

Figure 8.9. Organisation C: Source of funding as percentage of total income

Source: Organisation C Annual reports 2002-2010

8.3.4. Programmes

Organisation C has been frustrated by the limits contracts have placed on its ability to pursue its own philosophical approach to its work. The Board has struggled to maintain a balance between generating income and providing programmes for its target group. It has seriously examined becoming more focused on its outdoor activities and developing this as a business but Board values have maintained the

0 50000 100000 150000 200000 250000 300000 350000 400000 450000 500000 Total Donations Total Earned Income Total Government related funding Total Philanthropic Funding 0 10 20 30 40 50 60 70 80 90 2002 2003 2004 2005 2006 2007 2008 2009 Donations Earned Income Government related funding Philanthropic Funding

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organisation’s focus. However in more recent times the contract process has increased the risk for organisations working with disadvantaged young people because failed outcomes are penalised by funding claw-backs. The organisation has responded by broadening its mission to enable it to focus on preventative programmes with school groups, among whom are children the organisation can help if identified early. The challenge for Organisation C is to balance its work between mission and income and maintain solvency.