Pride in no profit

By VIKKI BLAND

Imagine telling Telecom chief executive Theresa Gattung or Air New Zealand's Ralph Norris to "go forth and perform as CEOs, but get the public to donate money to run the business, and don't make a profit in any circumstances".

Department of Inland Revenue records show that more than 1000 not-for-profit (NFP) organisations are doing just this.

While the labels "CEO" and "not-for-profit" may seem incongruous, several such organisations employ hundreds of staff, raise and spend millions each year, and need a chief executive, marketing, communications, IT and finance staff, as well as a board of trustees and governance.

But if the infrastructure and management challenges of NFP and commercial CEOs can be similar, their pay is not.

Ian Dally, chief executive of the New Zealand sector of Christian Blind Mission International - a worldwide organisation that raises $130 million a year for cataract operations and blindness prevention and rehabilitation - is paid $52,000 a year.

In contrast, Gattung is paid about $54,000 a week. Her annual salary of $2.82 million is $1 million more than the mission's New Zealand branch wants to raise over the next 12 months.

Admittedly, Gattung's salary is extraordinarily high and Dally's is on the low side, even for the not-for-profit sector. However, high-profile Bob Kerridge, chief executive of the SPCA, is paid less than $100,000, and Jim Barclay, CEO for the Child Cancer Foundation, gets less than $150,000.

So why do they do it? Surely the warm fuzzies can't entirely compensate for lack of commercial remuneration, swish offices, travel, company shares and other perks which are standard in the commercial sector?

It seems that they do compensate. "If I was a CEO in a commercial organisation, I would probably be earning double," Kerridge says, "but if it's about money, the heart is not in the right place."

Dally says he felt led by God to give up a "great job" in the education sector to pursue NFP work.

"There is a verse in the Bible that tells Christians they can't just be saying nice words to people in need - we have to try to meet those needs," Dally says.

Barclay, whose mother died of cancer, spent 36 years in the RNZAF. He was an Air Commodore when he left the Air Force. At 56, he took on the job as chief executive for the Child Cancer Foundation.

"I wanted to make sure that the training I had at taxpayer expense would be put to good use.

"I also wanted something that would be more than just another job between now and retirement," Barclay says.

Although only Kerridge has commercial management experience, all three CEOs say they are well aware of the differences between the sectors, particularly in the areas of remuneration and staff management.

After all, how does a not-for-profit CEO manage a too-independent volunteer? How can key employees be pressed for better performance when they usually work for less than they could get in a commercial environment?

Barclay says it is a big challenge to respond to the needs of the Child Cancer Foundation's large number of volunteers.

"We need them to help to support the 150 or so new families each year who receive the devastating news that they have a child with cancer.

"At the same time, we have to run professionally to keep the confidence of donors. It takes little in the way of negative press to move a donor on to another charity."

Kerridge thinks the best way to manage volunteers is to expect the same professionalism from them as from paid staff.

"Our reliance on volunteers is so important - they are really a second wave of staff. We expect them to toe the line and be professional. After that, my strategy is simple: I believe in my staff and let them get on with it."

The CEOs agree that the biggest challenge they face is trying to generate adequate funding from New Zealand's small but generous population.

This problem is common to most not-for-profit organisations and results in CEOs brimming with great ideas but being frustrated by financial restrictions.

"I'm torn. I need more staff to drive new initiatives. But for [a short time] that means fewer people overseas can be helped," Dally says.

Barclay says many Child Cancer Foundation employees haven't received a pay rise in years. "Fortunately, people are not here because of the money," he says.

Nor are they there for career progression - many fully employed not-for-profit organisation workers make a living but do the same job for years. "You can only move sideways," Dally says.

No career progression, poor pay and funding and management challenges - the life of a chief executive doesn't sound like a good deal. But Kerridge says it's all worth it when the SPCA wins a battle.

"Running a charity is running a business with heart. People are beginning to realise the beneficial effects that animals can have on their lives and, as people treat animals well, they begin to treat each other well," Kerridge says.

Dally is committed to the mission's work and enthused by the results.

"There are 45 million blind people internationally. If half can have their sight restored by a cataract operation - and we do about 500,000 cataract operations a year - then that's pretty satisfying.

"It means people can work again. Some of them have been blind for years."

Barclay says New Zealand does well for its children with cancer. "One hundred per cent see a doctor and 80 per cent survive, whereas internationally only about 20 per cent see a doctor.

"Our challenge is to be satisfied that we are now meeting the needs of those living with cancer and the newly diagnosed."


Grant Thornton Services


Do you have what it takes?


* Multi-tasking: if the organisation is small, the CEO can be required to do anything from carrying out the rubbish to deciding where the money goes.

* Top people skills: not-for-profit CEOs have to find ways to value and encourage staff, volunteers, donors, sponsors and suppliers and engage them in a mutually satisfying partnerships to build loyalty for the cause.

* Administrative and organisational skills: IRD compliance; donor information; PR and communications; fundraising, sponsorship and marketing initiatives - and finance.

* Project management skills.

* Strategy and planning skills: ability to work with professionals such as solicitors, planners, local government officials, boards and trustees.

* Knowledge, interest and passion for the organisation: its culture, aims and history.

* Flexibility: a Grant Thornton survey carried out last year of not-for-profit organisations revealed that 36 per cent did not have a formal health and safety programme.

* Self-promotion and marketing skills: a high CEO profile is important.

* Training: many tertiary organisations offer qualifications in not-for-profit leadership, management and marketing.

* Motivation: this is not a well-paid sector. Enter if you want to make a difference, not if you want to make money.