Key Takeaways | NFP Boardroom Lunch 2025
25/01/2025
Piper Alderman’s C-suite 2025 NFP Boardroom Lunch brought together senior leaders in the not-for-profit/for-purpose sector for a candid exchange on challenges and opportunities, including business sustainability, regulation and innovation.
Executive summary
The event highlighted the persisting and emerging issues facing NFPs, including competition from for-profit operators, evolving regulatory compliance, and the need to reinvent revenue models.
Attendees shared their insights, practical experiences, and strategies, underscoring the importance of governance, workforce resilience, and collaboration. The discussion reaffirmed that while many challenges remain consistent year-on-year, the sector’s adaptability and commitment to purpose continue to drive positive change.
Speakers
- Simon Venus Partner, Corporate & Commercial
- Will Fennell Partner, Corporate (Tax)
- Emily Haar Partner, Employment & WHS
- Tom Griffith Partner, Dispute Resolution & Litigation
- Erin McCarthy Partner, Employment & WHS
- Travis Shueard Special Counsel, Intellectual Property, Commercial
- Liberty Privopoulos Senior Associate, Corporate & Commercial
Key Takeaways
- Sustainability: Sustainability continues to mean different things to different organisations, but financial sustainability remains both a challenge and an opportunity for NFPs. Competition from for-profit entities is increasing, prompting NFPs to rethink their models and impact.
- Regulation & Compliance: The regulatory burden is ever-present and growing, with increased ACNC and ATO scrutiny – especially around tax endorsements. Compliance requirements are broad and complex, including related party transactions, wage and long service leave, whistleblower protections, and conduct risk. AI presents potential benefits but also governance challenges, particularly for directors.
- Intellectual Property: In a competitive sector, NFPs should consider the benefits of registering trade marks and “ring fencing” their intellectual property and confidential information, to provide a competitive edge and value.
- Technology: Technology offers efficiency gains in pursuing NFP purpose, but also brings new threats, particularly around cybersecurity and data management. Getting good data and how to use its can present challenges. The benefits of AI depends on good data.
- Governance: Board composition and attracting/retaining the right members remain challenging. Boards are increasingly risk aware, sometimes risk averse, There is heightened activity around access and indemnity deeds, as well as efforts to address board culture, director conduct, and leadership support.
- Workforce: Workforce pressures, especially resourcing, are common to most NFPs. Care workers are particularly difficult to source and workers generally are prone to being poached by for-profit operators. Sustainable workforce practices are essential, with challenges arising from regulatory changes such as increased payroll and industrial relations compliance scrutiny from the Fair Work Ombudsman and employee organisations, the need to ensure a psychosocially safe workplace, and the imminent introduction of community sector portable long service leave in South Australia. Attracting and keeping volunteers is also a key concern.
- Diversification of Income: Diversifying income sources is vital to mitigate risks. Joint venturing and collaboration initiatives between providers are becoming more common in a constrained funding environment.
- Costs of Doing Business: The financial impact of rising basic costs is felt across the sector, squeezing margins as these increases cannot be passed on. This puts the focus on re working established revenue models – we need to do things smarter!
- Competing for Government Contracts & Data: NFPs face increasing competition for government contracts.
- Transactions (M&A): M&A transactions in the NFP sector are complex, often driven by funding challenges and soft balance sheets. Due diligence is key to ensure alignment and making “go/no go” decisions. Stakeholder engagement, transparency, and communication are fundamental – don’t fall in love with the deal; it must be the right fit.
- Operating Structure: Associations converting to companies limited by guarantee is a growing trend. These transactions require careful stakeholder engagement and getting the conversion mechanism and process right. There has also been a shift to board-only or limited membership models for NFPs.
- Privacy & Cyber Risks: The importance of privacy and compliance with regulatory frameworks is heightened by escalating risks of cyber incidents and bad actors. Again, AI presents challenges for initiatives like meeting transcription.
- Royal Commissions & Regulatory Enquiries: Preparation for responding to compliance changes as a result of Royal Commissions and government responses to recommendations – particularly in Disability and Aged Care – remain ongoing priorities. The new Aged Care Act in particular creates supplementary whistleblower protections to those already existing in the Corporations Act, and may be a signal of what may come for other regulated industries, such as disability support services.
- NDIS Issues: NDIS-related challenges, including compliance and funding, continue to be a significant focus for many NFPs. Many providers are asking: do we stay in the NDIS or not?
Final Word
In a rapidly evolving environment, not-for-profit/for purpose organisations must remain agile, collaborative, and innovative. By focusing on sustainability, technology, and workforce resilience, NFPs can better navigate regulatory complexity and financial pressures.
The insights shared at this year’s lunch reinforce the sector’s strength and adaptability. Piper Alderman’s experienced lawyers are available to assist your organisation in addressing these challenges and opportunities, to help you achieve your purpose and drive sustainable success.
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