National Business Review journalist Dita De Boni interviews ChildFund New Zealand CEO Mark Collins on the challenges that charities are facing post-covid, and the strategies that ChildFund is undertaking to remain viable.
The country's charitable sector is under the spotlight and soon to be subject to changes to the Charities Act aimed at making them more accountable and transparent.
Taking in some $21 billion a year, the non-profit sector is large and unwieldy, with more than 24,000 organisations registered as charities. The proposed law changes aim to ensure charities cannot secretly horde assets.
But the main charities dealing with privation here and overseas say they have skinnier coffers than ever, as need hits unprecedented levels thanks to drought and the Ukraine war, among other things. Meanwhile, cancelled fundraising efforts and spiking cost pressures are biting, as people start to revisit their charity spend.
It’s a mix of challenges that weighs heavily on the mind of Mark Collins – the newly appointed chief executive of ChildFund. Formerly CEO of Mike Pero Group, Liberty Financial and a variety of other mainly finance sector roles, Collins has stepped into ChildFund at an interesting time – having to deal with pressure on resources but also, he says, a fundamental change in the way people interact with the charity.
The secular, for-purpose organisation (Collins does not like the term 'non-profit') generates some $11 million a year from a mix of mechanisms including drives and individual child sponsorships, benefactors, government contracts, corporate giving and partnerships. Revenue at ChildFund, as at many others, has been on a downwards trajectory since the pandemic started.
The charity works through local partners in Kenya, Zambia, and Vietnam, works with those on the ground helping children displaced by the war in Ukraine, and has a substantial presence on the Pacific – Kiribati, PNG and the Solomons – which is a point of pride for Collins and something that attracted him over from the corporate sector.
He hopes ChildFund will eventually run programmes in New Zealand as well.But the new CEO faces a fundamental shift in how the charity needs to make money in the future, and corporates are a big part of the picture, which is perhaps why his background in corporate finance was adjudged suitable for the job helming ChildFund. The move to partner with corporates is more acute than ever as the donor population ages, he says.
Seniors as donors
“The average age of our sponsors is 65, and they have been doing it for years, some starting back when individual sponsorships were almost the only thing on offer,” Collins tells NBR. “We have people who have been sponsoring this way for 22 years in some cases, which is amazing, and it’s a great model from the perspective of longevity, but obviously over time children grow up, the sponsors get older, and then you add Covid – which has left people with more concerns around money, especially those heading into retirement.”
While a surplus of jobs helps mitigate some impact of the cost of living crisis at present, Collins is nervous about 2023, when living costs may become worse but so may the job market.
“Our programmes are 10-15 year programmes, which take two or three years to set up getting all stakeholders on board, building the project, proving the plan, making sure the money is going to the right place... we can’t just start a programme and then say, ‘sorry, there’s no money for it now’. We have to make sure it stacks up in the long term.”
ChildFund has noticed a trend away from individual sponsorship of children by a younger generation of givers. While individual sponsorship of children is still an important plank of giving, a new generation prefer to see communal projects undertaken, Collins says.
Across a number of charities there's been a trend to also funding ‘enrolled’ children as opposed to just those who are 'sponsored' to keep pace with this same trend (although gifts given to specific children by their sponsors through ChildFund are given directly and 100% in full, Collins says).
Overtime, direct sponsorship will decline as part of the ChildFund giving mix, and community-based sponsorship will increase. Other concerns of younger generations will also predominate.
“Climate change is very important topic for younger generations," Collins says. "My challenge is that we can work with partners to build schools and youth centres and so forth, but if there is a five-year drought because of climate change, then the children don’t get to eat and the water dries up. It's a really important issue for us to not only recognise in a new generation of donors but also in terms of the people we are helping.” NZ corporate giving low by international standards
Another key change Collins says is necessary is a more sophisticated approach to possible corporate sponsors and partners. ChildFund has had a long history of working with some of the country’s largest corporates – supplying dairy products into southeast Asia with Fonterra or working with Gallaghers to build elephant-proof fences in Zambia.
But there is a disconnect in the way the for-purpose sector approaches corporates for help – and may explain why giving from corporates sits at below 3% in New Zealand, which is extremely low by international standards.
Collins was himself approached by four charities when he was at Mike Pero, (which also has a charitable arm, the Mike Pero Foundation). But he found their approach sadly lacking and now understands why.
“The problem was they all pitched the same way: ‘My charity is best because here is what I do for this’… all of them very worthy causes, all of them were important but you would have option paralysis and end up going with none,” he says. “None of them said ‘here’s what we can do for you; how we can enhance your brand or your offering’. “That’s what I think the whole sector needs to do, and that is certainly been my approach to date – we’ve started, and we’ve got one [negotiation] underway…and that’s very much the language that got us that partnership.”
Article excerpt text is courtesy of National Business Review 30 June 2022.
To interview Mark or for media information contact ChildFund New Zealand engagement manager Carolyn Brooke on 0272859978 or email@example.com