Why would you work for a not-for-profit or charity? How does it compare with for-profit organisations? Three CPA Australia members share their insights.
The desire to make a difference is a major work-life trend globally, as even careerists become disillusioned with the idea of existing simply to earn and consume.
Millennials, in particular, don’t just want a good job, they want to work for a good organisation. The Deloitte Millennial Survey 2017 found that millennials feel a personal connection to big issues such as social injustice and climate change.
As a CPA, there is a way to combine changing the world and earning a salary, and that is by working for a not-for-profit (NFP) or charity organisation.
Since 2016, millennial and CPA Angie Tse has worked for Youngcare, which helps young people with high care needs. Youngcare is committed to creating a future where every young person has freedom, dignity and choice.
“It’s a freedom we all deserve,” the NFP’s website says, and Youngcare is realising this mission through services such as its At Home Care Grants, which provide one-off funding to help young people with high care needs. There is also Youngcare Connect – a free national phone and email information support line – and various housing projects across states.
“I enjoy working for a charity that focuses on choice and freedom, and I find my job meaningful because I know every single effort is making a difference to the community,” Tse says.
“That gives me a sense of satisfaction, knowing we make a positive impact.”
As well as her position as management accountant, Tse relishes the opportunity to assist with fundraising, including selling raffle tickets and merchandise and assisting with public relations at events.
Managing a multimillion dollar concern
There are approximately 600,000 NFPs in Australia, 56,000 of which are charities registered with the Australian Charities and Not-for-profits Commission (ACNC). According to the ACNC, their combined income is over A$142.82 billion, and they employ 10.6 per cent of the workforce in Australia.
Managing that money – especially in the changing landscape of funding and reporting for NFPs and charities – takes savvy finance professionals. One of ACNC’s objectives is to promote the reduction of unnecessary regulatory obligations on the sector. It works within the Australian Government’s regulatory performance framework to reduce the cost of unnecessary or inefficient regulation.
Mel Yates FCPA, director – reporting, red tape reduction and ACNC corporate services, says accountants who work for NFPs and charities often have to report to more stakeholders than those in the corporate world.
"I enjoy working for a charity that focuses on choice and freedom, and I find my job meaningful because I know every single effort is making a difference to the community." Angie Tse CPA
“There is also the changing nature of grant funding to consider in parts of the charity sector, which is moving more toward fee-for-service,” Yates says.
“Traditionally, charities were receiving blocks of money. Now, the organisation may receive dollars based on services provided to each beneficiary, so cash flow modelling, for example, must produce an accurate reflection of the cost of providing those services. Grant and donor management can also require specialised reporting on how funds are being used.”
From January 2019, changes to accounting standards give rise to additional challenges. For example, new accounting standards AASB 15 Revenue from Contracts with Customers and AASB 1058 Income of Not-forprofit Entities change revenue recognition from the “transfer of risks and rewards” model to a “transfer of control” model.
“Like any sector, there are unique regulatory obligations and for charities, governance standards apply to ACNC-registered entities, so CPAs should become familiar with them,” Yates says.
“There are also complex fundraising requirements at a state and territory level that continue to be a challenge for CPAs in this area.”
In short, Yates believes joining a NFP or charity after working in another sector could feel like driving on the “wrong” side of the road overseas.
“It may feel unfamiliar at times, even though you understand the concept of road rules and how to drive a vehicle. You need to be looking in a different direction sometimes.”
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A passion for social justice
One person who likes that direction is generation Xer Alecia Rathbone FCPA, general manager housing matching for the Summer Foundation, an organisation that aims to create sustainable changes that stop young people from being forced into nursing homes because there is nowhere else for them.
“I am passionate about social justice and how we can all play an active role in shaping and contributing to the communities in which we live,” Rathbone says.
“I feel privileged to work [in] the for-purpose sector, contributing to improving outcomes for people across our community every day.”
Raised in Melbourne, Rathbone worked full-time in administration and accounts after finishing high school. At age 21, she enrolled part-time in a bachelor of commerce degree at Deakin University.
“I went on to work for a listed company as an assistant accountant, putting in 50 to 60 hours a week,” she says. “While it was great experience, it didn’t have enough depth of meaning for me.”
Rathbone had long been involved in voluntary work with the Girl Guides – she was a member of the board at the age of just 25 and COO from 2008 until 2012.
“I learned how good that felt,” she declares.
Before accepting a role with Summer Foundation, she worked with the Foundation for Young Australians as CFO and company secretary, COO and deputy CEO.
“Sometimes it is about rolling up your sleeves and getting in there yourself because of limited resources,” Rathbone says of her NFP roles.
“It’s also the case that you often don’t have a built-in revenue stream and, as the finance professional, you often have to talk to project leaders about how to maximise cost efficiency and bring business principles into the way we work. What is rewarding is when you set the strategic direction and see it coming to life in incremental steps. Plus, I am always really connected to the mission and that’s what drives me.”
As well as her role with Summer Foundation, Rathbone is on the board of YWCA Australia and inTouch Multicultural Centre Against Family Violence. She and her husband also do volunteer work for St Vincent de Paul Society.
In addition, Rathbone serves on CPA Australia’s Victorian public sector and not-for-profit committee.
Along with some CPA Australia colleagues, Rathbone started an NFP CPA discussion group in Melbourne because, she says, it is important to have a network to keep your knowledge up to date to work in the sector.
Working for NFPs: more than financial rewards
Tse acknowledges that there is a complex set of financial rules working for NFPs and charities and says finance professionals need to be careful their reporting is transparent.
“It is also about high expectations within a tight budget,” she adds.
At the same time, there are rewards for employees whose salary may not be competitive with corporate peers. Some could be described as spiritual or emotional.
“I was invited to sit in an At Home Care Grants panel last year to understand better how we distribute [a] grant,” Tse says.
“A mother wrote to us in a respite application, regarding how desperate she was providing 24-hour care for her high care needs daughter and neglecting the other healthy young child in the family. She felt that she was falling apart. It brought me to tears and I realised how lucky I am. The grants we provide are not just about satisfying physical needs, but also giving hope to the families, of which I feel very proud.”
"There is also the changing nature of grant funding to consider in parts of the charity sector, which is moving more toward fee-for-service." Mel Yates FCPA
As for concrete benefits, Australian taxation laws provide generous concessions for NFPs and some charities. These include fringe benefits tax (FBT) exemptions, where an employer is able to pass on to employees a proportion of their wages as reimbursement of personal expenses with no income tax liability. Employees may choose to package items such as mortgage, rent, private health insurance or even a personal loan repayment, up to A$15,900 each FBT year.
While Rathbone says there is a chance CPAs will have to take a salary cut moving from corporates to NFPs, in her opinion the sense of satisfaction and fulfilment more than compensates for it. For those looking to make the change, she advises they research the organisation and how it fits with their personal values.
“Articulate why you are passionate about the cause – your cover letter is a great place to outline this,” she says. “It’s also [advisable] to show why you would be a great fit for the organisation. Listing volunteering and the community work you do will show your commitment.
“Of course, for-purpose organisations are looking for skilled applicants, so [demonstrate] this like [you would for] any other role and tailor your CV [accordingly].”
5 skills you need to work in a charity or not-for-profit
- Business acumen and willingness to stay up to date with reporting challenges and changes in the sector.
- Ability to manage grants and donors – funds may not just come in automatically.
- Determination to generate a surplus to ensure the entity is sustainable.
- Ability to provide timely information to a series of stakeholders.
- Understanding of limited resources and capacity to help teams work together to manage funds.
Health, housing, family support: accounting and not-for-profits