L2R: Professor David Gilchrist from Curtin University’s School of Accounting and Elizabeth Carr, chairman of the Macular Degeneration Foundation and board member of the Kokoda Track Foundation, at the media briefing about the release of the Directors Social Impact Study 2012.
By Yasmin Noone
Board directors want to dump the tag line ‘not-for-profit’ (NFP) from descriptive organisational terminology in a bid to escape the negative connotations associated with the phrase, according to a new report.
The Directors Social Impact Study 2012, released by the Australian Institute of Company Directors yesterday, claims that a number of experienced directors involved in focus group sessions for the study said – without prompting – they want the NFP term to go.
They believe the tag, used to describe organisations whose primary objective is something other than the generation of profit, promotes what they are ‘not’ rather than what they are.
“They were very keen to communicate that they believe the term is inaccurate, misleading and diminishes the sector’s reputation,” the report states.
“Their view is that all organisations – NFP and FP – must make a profit and/or a return on investment/assets and that this term simply makes people focus on the wrong element.”
The study, conducted by Curtin University on behalf of the institute, was based upon an online survey of over 2,050 NFP and FP directors and a series of five, two-hour follow-up focus groups.
The report cites comments from focus group participants who said: the term, NFP “affects recruitment as people think we are not as professional or something”; “Making a profit is crucial for not-for-profits”; and “It doesn’t describe us or what we do”.
Professor David Gilchrist from Curtin University’s School of Accounting also expressed his dissatisfaction with the phrase, NFP.
He said the NFP tag was a “misrepresentation of the sector” that makes the sector “appear second best and gives the impression of a sector that is not as professional as it is”.
“What they [the directors] were saying was that the NFP tag carries too much baggage,” Prof Gilchrist said.
“We’ve got to get rid of this tag because it’s not a homogenous sector …and [the term] carries so much meaning.
“It has been used for so long – it is time to change it.”
A new name, a new perception
The directors interviewed said they want a new term to replace ‘NFP’ in the modern vocabulary that is positive and clearly defines what mission-based organisations do.
New tag options proposed by the focus group include ‘for-community-purpose’ or ‘community-purpose-organisations’.
“I’ve heard the sector referred to as a number of things, including some people calling it the third sector,” Ms Wills said.
“I’m not a particularly big fan of [that term] either. But the one thing I hear people use and in the most positive way is ‘for community’, rather than ‘not for something’…
“But then it just depends on how you define your community.”
Commenting on alternative names, Prof Gilchrist added that any new title should depict the unity and sense of purpose that mission-based organisations express.
It should also emphasise the important role the sector and its volunteers play in the overall community, from sport to health to education and beyond.
“From my perspective… it needs to reflect the positive attributes of the sector instead of describing it something it’s not. I think it needs to describe what the sector is and what contribution it makes.”
Prof Gilchrist said further research is needed into community perceptions about the NFP tag and greater collaborative efforts between sector peak bodies, industry groups and volunteers about what a new tag should represent.