The not-for-profit sector is in dire need of a shake-up to restore the trust lost after sexual misconduct allegations against humanitarian aid workers, according to the director of a social enterprise and a former Australian Financial Review woman of influence.
Kate Sutton, director of the all-female Humanitarian Advisory Group who has worked for Oxfam and World Vision, said Australia continued to be a philanthropic nation but a loss of trust in the sector had led to decreased funding.
"I think the big linking piece for me is all the things that have been happening in our sector recently around sexual exploitation and abuse. And that understanding that ... if you have more diversity, including more women in senior leadership positions, then your risk decreases because people are more likely to call out [bad behaviour]," said Ms Sutton, who was recognised in the Women of Influence awards in 2015 in the social enterprise and not-for-profit category.
Women dominate the not-for-profit sector at entry level and a Women in Humanitarian Leadership paper prepared by Deakin University found that in the United States, women account for 75 per cent of the non-profit workforce. But the numbers drop significantly at management and executive level.
Ms Sutton said the private sector had done a stellar job of bringing attention to the lack of diversity, and articulating the positive impact of diversity with data about profit and turnover, but the not-for-profit sector had lagged behind.
"Really, we just haven't thought of that in our sector at all," she said.
Social enterprise and not-for profit is one of the categories in The Australian Financial Review 100 Women of Influence Awards, presented by Qantas. The list of 100 Women of Influence will be unveiled next month and the 10 category winners, and one overall winner, will be named in October.
Gender pay gaps
Karen Mahlab, the founder and CEO of Pro Bono Australia who was recognised in the Women of Influence awards in the social enterprise category in 2012, said the Edelman Trust Barometer showed trust in a range of sectors, including not-for-profits, had fallen in recent years.
"As a society we need to restore trust in institutions," she said.
Pro Bono Australia produces Australia's largest salary survey for the not-for-profit sector and Ms Mahlab said it showed its gender pay gap matched other sectors. CEO pay data highlights that women leading not-for-profit organisations earn 87¢ for every dollar that men in similar positions earn. In not-for-profit organisations with operating budgets of $500,000 to $2 million and $2 million to $10 million, it found the median total salary package for men was higher than for women.
However, for organisations below and above these ranges, female CEOs earned more than their male counterparts based on median salaries, suggesting the gender pay gap varied by organisation size.
Ms Mahlab said that, anecdotally, the number of women on boards in the not-for-profit sector was not as high as it should be.
Where households used to sponsor a child through a charity, Kate Sutton says many people now prefer to give on their terms, often through crowd-funding platforms such as GoFundMe.
"While it's higher than the general corporate sector it still has work to do," she said.
But Gillian Triggs, former president of the Australian Human Rights Commission and recognised in the 2016 Women of Influence awards in the public policy category, said that while getting more women in executive positions was important, the sector needed to also nurture women at the lowest echelons of business.
"It's all very well to talk about women on boards, which is important, but the harsh reality is that on a daily level, the not-for-profit sector is really picking up the work that the government ought to be dealing with," said Ms Triggs, now the chairwoman of Justice Connect in Sydney and Melbourne.
Justice Connect links 900 pro bono lawyers with the community to ensure all people, including the homeless and those suffering elder abuse, family violence and financial exploitation, have access to justice.
"There are thousands of women who are working in the not-for-profit sector all pro bono, incredible men and women on the streets, literally providing backup and assistance and I think we need to talk more about that: these women at the bottom of the pyramid, workers in canteens and shopping centres and on the trams and in the cafes. They are not in long-term sustainable work and they really struggle."
Changes in how people give
A big challenge across the sector is access to funding. Ms Sutton said the sector needed fresh thinking. "It's struggling to recreate itself in a way that is going to make it sustainable," she said. "It needs to be more creative and innovative in the way that it's responding. If we continue just working with our old and traditional teams without considering that diversity, I don't think we're going to be stepping up to the challenges that are facing our sector right now."
Whereas 10 years ago many households would sponsor a child through a charity such as World Vision or have a monthly donation plan, people today – particularly younger people – preferred to give on their terms, often through crowd-funding platforms such as GoFundMe.
"They don't necessarily have to go through headquarters based in Australia in order to get that funding to the field," Ms Sutton said. "They can go directly and give their funding to whoever they want, wherever they want."
Ms Mahlab agreed there was a challenge in engaging Millennials who "want to be active more than activists" by volunteering time and networking with other volunteers. "They want to be involved rather than just give money at arm's length." A push away from government funding and towards philanthropy – similar to the US model of giving – was also a cause for concern, as philanthropy contributed only about $1.4 billion in Australia, a tiny percentage of what the government spent, Ms Mahlab said.
But she was optimistic about the future and said the trend towards impact investing, where people invest their money for financial return as well as social impact, would have a positive impact on the sector.
- The 100 Women of Influence will be announced on September 4. The 10 category winners and the overall winner will be announced at a gala event on October 17.