The Strengthening Sector Resilience is a project to support Victorian disability organisations to be user-led and well-positioned for the future.
Through the project, the Victorian Council of Social Service worked with organisations providing disability information and advocacy services and supported them to build their capacity for the transition to the NDIS ILC and other funding sources.
A key part of the project was working with organisations to understand and explore user leadership in their boards and governance committees.
New capacity building resources – free webinar series
In 2019, VCOSS convened a series of workshops and events for disability information services and advocacy organisations.
The goal was to share knowledge and increase understanding of topics that organisations identified as important to them at a time of significant, ongoing change.
VCOSS has now produced a free webinar series to reinforce, embed and extend areas of knowledge and skill that are important for organisations in the NDIS environment.
Please watch at your leisure – we hope you find the webinars helpful and informative.
Welcome everybody to our financial literacy workshop. This workshop has the goal of helping you to understand the financial reports that you’ll see in your organisation. Together with VCOSS, Non Profit Training would like to acknowledge Aboriginal and Torres Strait Islanders as our nation’s First people. We acknowledge the Traditional Custodians of the Land we’re presenting upon today, the Wurundjeri people. And we pay our respects to the Elders past, present and their emerging leaders. VCOSS made this possible today, VCOSS is the peak body for the Victorian social and community sector. VCOSS creates a better and fairer and more just Victoria. I’m Jenny Holliday. I’m a director of Non Profit Training. At Non Profit Training, we work together with charities and not-for-profits across the country to help groups and their communities to understand more about the organisation that they’re running. Some of the challenging parts, such as the financials like we’re doing today, risk management and governance, and how to write grants and many other courses as well.
And I’m Nadia Mattiazzo. I am the acting Chief Executive Officer of Women with Disabilities Victoria. Women with Disabilities Victoria is an organisation run by women with disabilities, for women with disabilities. Our vision is a world where all women are respected and can fully experience life. We do this by empowering women with disabilities to be leaders and influencers. We influence the policies of government and community organisations, and we influence the way government and other organisations provide services to women with disabilities. Our funding comes from a number of sources, State and Commonwealth departments and philanthropic organisations, which are organisations that are private and who sometimes use their donated money to provide social and useful services. Within any project that we get funding for, we have to report back on how well the project worked, how successful the project was, and of course, how, and for what we spent the money on. This means that all of our projects have to have budgets. They may be a small budget for only a small amount of money, or a big budget for hundreds and thousands of dollars. We are, for example, currently working on a project that looks at how we support women who want to make submissions into the Disability Royal Commission. This project has a very small budget so we need to make sure the work we do supports as many women as possible. And now just recently, we’ve received three year funding for a three year project, which is worth about $1.8 million, where we’ll be running some leadership programs for women with disabilities and also growing our local leadership hub network. As you can imagine, putting together a budget for this big project has taken a lot of time and it is possible that what we think we will do and what we think we will spend the money on and what we actually do and spend the money on may change over the three years.
Thanks for telling us about those projects, Nadia. It’s wonderful for you to join us today and have someone with your level of experience in talking us through the financials as well, and bringing some life to the financials. Because of course, the financials tell us a bit of a story about the project. If you have your financial reports available, it would be good to have a copy of those as you watch this with us so you can relate what we’re talking about to what you’re seeing in front of you. But of course, it’s OK if you don’t have them. But just covering off what we’re going to go over and today’s workshop, is the profit and loss report. This is the key report that you’ll see at your organisation. Remember that as we go through this, sometimes having lots of information in front of you can be very confusing. So, we’re going to go through the profit and loss report line by line and column by column. And likewise, as Nadia was talking about before, the budget. It’s very important that you have a look at the numbers in conjunction with the budget. And for those who haven’t done a budget before, or have never seen a budget, that’s OK, we’ll be talking through that. And we’ll also be talking about how the numbers tell you whether you’re on track with the project or not.
One of the things that is always difficult with the financials is the words that are used. They are often hard words or different from what we use normally. Along the way, we will talk about the words that most of us don’t use every day and explain them. Some of them, we only hear when we talk about the finance reports.
That’s right, Nadia. To make it a bit harder, different people use different words for the same reports or parts of the reports. So, we’ll talk about these along the way. We have supplied a list of words for you and what they mean that we’re using throughout the course of the session today. And these will be available on the website. You can also find a copy of this presentation on the website, and you’ll be able to print them off and write notes on them if you haven’t already done this. So now, let’s have a look at the profit and loss report. This is also called the income expenditure report. Think about what yours is called. The most common things that you’ll see on this report are that it tells you about your income. That’s the money that’s come in, the money that you have earned and what has come into the bank account for your project or your organisation. It also says your expenses. That’s the money that has gone out, the money that you have used to pay for things that you’ve used in your project or your organisation. If more money came in than you spent, it’s a profit. It could also be called a surplus. If you spent more money than what came in, it’s a loss and it can also be called a deficit. Have a look on the bottom line of your report and see whether it uses the term profit or surplus.
The same project we are looking at today is being run by WoopWoop Inc. We have received some ILC funding, ILC stands for information linkages and capacity building. WoopWoop ILC project is a lunch event for the local businesses to grow confidence of employers, to report people with a disability. The lunch will be in May and people will come and have a lunch and mix with WoopWoop team. Then there will be some presentations about ways of their businesses to become more confident to employ people with disabilities. They will also be people who are living with disability, talking about their work experience.
So thanks for that Nadia and talking about the project that we’re looking at today with WoopWoop organisation. The chart of accounts. When we look at an organisation’s report, Nadia and I both like to break it down into the sections and the chart of accounts is the list of items, per income and expenditure. To start with we will just talk about the income items. We can see there on the WoopWoop incorporated profit and loss report is the ILC project grant. So that’s the money we’re receiving from the government to be able to run our project. And likewise, we have events sales. Events sales are selling tickets to the luncheon that Nadia talked about before. Grant income is the money that you received to run a project or a program, and often it is from the government. For your organisation, other income items might be other grants from funders, merchandise, for example, if you sell things such as wristbands so that people know about your project, it might be interest, Interest is income from the bank. When you put your money in the bank, they sometimes give you a bit of money to hold it there. Donations is another source of income. Donations are from people organisation who think that you do great work as Nadia described before that they get at Women with Disabilities Victoria, and they want you to do more of that great work. Have a look at your report and see what other income options are listed there. If you don’t have those income items that we’ve just talked about, that’s OK, all organisations are different because every organisation does different things. They’ll have different income items as well.
For Women with Disabilities Victoria we have some extra things in our profit and loss reports. Under grants we have things called state recurrent and state non recurrent grants. So that’s money that the recurrent grants obviously means that they happen maybe each year. Non-recurrent maybe is that they only happen once off for the project. We also have grants other, we have fundraising and that could be contribution by members or donations from other sources received. We have under other income, we have interest unrestricted and sundry income.
Great, so you can say that there are lots of different items depending on your organisation. So make sure that you understand each of the items that is on your report. Now we’re going to look at just the income item. So the second column is about the money that came in. You’ll say the word there, actuals, Nadia, can you tell us what actuals mean to you?
Actuals column is not the money that came in for the project and the money that was spent. It’s called actuals because this is often different amounts to what we guessed we will get when we first planned the project.
That’s right. What this column is now telling us. If we just look at the income section, is that we’re received $2,450 in March? 2000 of that came from the project grant and $450 from the event sales for people who have come to the event we are holding in May. So this is March and we’ve still got a couple of months until we hold the event.
And now we’re looking at the expenses. The expenses for the WoopWoop ILC project, our administration costs. So that might be things such as the telephone and the electricity and other things that help to run the organisation that you use quite often in order to run the project. We have interpreters there because that’s very important for us to run our project, but actually we haven’t spent any money on interpreters as yet. So that’s a blank item in March.
The event costs. So we’ve started already to spend money to get the event ready. It might’ve been that we had to put a deposit on the venue, for example. So we’ve spent $350 in March. The salaries and wages is the next item. So we can see there. That’s how much money we spent on that item in March only for the staff that are running the project. And of course we have some travel there that has been reimbursed too. Again, if you don’t have these expenses listed on your report, don’t worry. It’s because you do different activities.
In now profit and loss, we have other expenses by them, such as accounting fees as it purchased, board and governance expenses, telephone charges, consultancy fees, evaluation costs, conference attendance.
Yes, so you do very different things Nadia then I will do at WoopWoop ILC project. So now we’ve uncovered all of the second column. So the first column was our chart of accounts, the list of items in our income and expense report or our profit and loss. And now we have the second column, which is the actuals. This is what happened in March. And we can see that in March, we’ve made a profit, right down the bottom, of $481. Sometimes this is called a surplus in organisation. It means that we receive more money than what we spent by $481. Alright, so now we have uncovered the third column, which is the actuals year to date. So what does that mean? Year to date. We haven’t heard that term before. It’s another finance term. What it actually means is that we’re looking at the financial year for an organisation. For WoopWoop, its financial year started on the 1st of July, 2019, and it’ll go through to the 30th of June, 2020. So, make sure that you know what your financial year is, because that will help you to calculate what that column means. So, in the case of WoopWoop, it means, because we started on the 1st of July, 2019, it does mean that this column reflects nine months’ worth of actuals, so nine months’ worth of income and expenses. So, that’s what we’re looking at here. So, it keeps you up to date with the total money that has come in and the total money that has gone out so far for the year, and that there are three months also left to go. Nadia, do you know what financial year Women with Disabilities Victoria has?
Yes, it’s the same as Woop Woop’s. 1 July to 30 June. It would be good for you all to check your financial year for your organisation. However, sometimes we receive funding for projects that go within the calendar year, that is 1 January to 31 December. This makes things confusing because you need to remember which project runs for which time and when your budget starts and when your budget ends. And trust me, this has confused me a lot of times.
(LAUGHS) Thanks Nadia. Yes, that does get a little confusing, doesn’t it? When we need to be clear about those things. So, now we’ve just expanded on this third column. So, this is the year to date. So, it’s the nine months’ worth. And now we’ve brought in the expenses so you can have a look at those. So, you can see that the administration costs are starting to add up. There’s $1,364 of those, and we’ve already spent a little bit of money on an interpreter to make sure that our project is running well. So, like in March, WoopWoop has made a profit for the year to date, the nine months’ worth of the project. The profit is 2,955. So, how are we going? Is the project going well, or is it not? It actually looks OK because we’re making a profit, but we really need to think about where we thought we might be at this stage of the project. And we do this by checking what has happened in terms of the actuals, the column we’re looking at the moment, compared to what we plan to happen, and that’s the budget.
So, what we’ve done is bring in a fourth column for you. And this is the budget column. The budget is a finance plan that was put together before the project started. It’s the best guess at what money will come in, the income, and what money will go out, the expenses. When budgeting, some things we know the exact cost of, and they’re things such as staff and our grants, and others we guess at a little bit more. The same goes for our income. For example, we know exactly how much is coming in for our grant, so it’s easy for us to know that part of the income. But in the event sales, we want to make sure that we’re getting enough money in our event sales to make sure that we’ve got enough people coming to make the project worthwhile. For Woop Woop’s ILC project, we know that we have a grant to help the project, and we want to be selling tickets. You can see there that line item in event sales, that we’ve actually sold more tickets than what we thought. The year to date actuals are $1,200. And what we thought we would have at this time is $800, so we’ve actually sold more tickets than what we thought.
So, we’re going really well. Sold 24 tickets, knowing that they’re $50 each, and we thought we’d have only sold 16 by now, so our project’s going well in that respect. But the project is the cost of the plan, and it’s good to know as much as about what you’re going to do in your project as you can, and then think about what is needed to make the project a success. It includes what costs money and where the money might come from. An example of the budget expenses we know is the interpreters. They’ve given us a quote for how much they’re going to charge us, so we do know how much that will cost. This is the same for wages and staff. We know how much we’ll pay the staff and how many hours we’re expecting that they’re going to work on the project. This is different to administration costs, where we do our best to guess at this. And administration costs include the cost of lights and phones and pens and paper, photocopying, and those everyday expenses. It’s good to talk to your manager about how the project is going and compare the actuals to where the budget is. You can see here that we’ve actually spent less than what we thought we would spend at this time. So, that means that we’re going pretty well and tracking quite well to budget. So Nadia, in your experience, what can make a budget or the project go off track?
So, in terms of this project, obviously if you don’t sell enough tickets or make the income you’re expected, delays in hiring staff, so the project falls behind, things don’t get done. For instance, we sometimes have trouble getting people that we want to apply for a job that have enough experience, and we might have to re advertise. Some things can cost more than we thought. Something like what’s happening with the coronavirus situation at the moment where we’re having face to face meetings are needing to be cancelled and staff are working from home, and that changes the different parts of the project and how they are delivered. Also, the resources that are needed to support staff to work from home. Again, for us, the staff members that we may hire may need a bit more support than we had planned for to ensure they’re able to do the job well. So, that can cause a delay. We can guess how long a project might take to organise, but things might pop up like the venue we’re booking might go broke, or they might have to close down and we need to find somewhere else. Finally, some of the costs we might think about to make the meeting accessible might actually cost more than what we had planned.
Thanks, Nadia. Remember that as Nadia has explained, lots of things can go differently to what you expected, and it’s not super important that the numbers are exactly as you expected them to be. Remember, the budget is the best guess that you had at the start of the project. So, for us, at WoopWoop, that was actually done more than nine months ago. So, things have changed a little bit, but as you can see, our budget year to date versus our actuals is a great measure to see how we’re tracking. As we mentioned, we’ve sold more tickets than what we thought at this point in time, so we don’t have as many people that we need to make sure that we get in the door and participate in our program at this point. So, hopefully those sales will be fulfilled, and maybe we’ll even make some extra funds through more ticket sales than what we thought. And likewise, down the bottom, we haven’t spent quite as much, but sometimes that can just be a matter of timing. Sometimes in a project, especially like an event, lots of big expenses come really close to when we’re delivering the event. So, we just need to be tracking those really well. Alright. Now our screen is starting to become a bit full with numbers, and this is where it can start to be confusing. So, again, as Nadia and I have talked about, take the time to just think, What is this column telling us? Just this one column of numbers. We’ve now got four columns that we can see on our screen.
The last one is the full year budget. Your report may not show this, but Woop’s does. What this tells us is how much we expected to receive and how much we expected to spend for the entire project. So, it helps us to understand where we’ve got money left, which becomes really useful when we’re looking to manage our budget right at the end. This helps us to control our spending on things that we don’t need and keep our costs down. It encourage us ways to try to find to sell more tickets, for example, other ways to get money in for your project. You can see that we’ve still got $1,800 of tickets to sell. That means 36 tickets. So, even though we’re ahead of budget at the moment, we’re still got a little bit of work to do. When we make a budget for a grant project, what you can see is that we’ve still got $1,000 left on interpreters, so we need to ask ourselves, Well, are we going to spend all of that money or not?” The project manager knows a lot about what’s going on, so it’s really good for them to help to feed the information to the manager who then reports maybe to the CEO or even to the committee or the board, because they don’t necessarily know exactly what’s going on. So, we have $1,000 left to spend on interpreters. Interestingly, right down the bottom, you can see that it’s coming up as a zero profit. So, in our funded projects, when we get funded by a grant, we actually don’t aim to make a profit or a loss. We try to use all of the money as we planned.
Now we have four columns worth of information for you to look at, financial information for you to look at, and hopefully you’re becoming a bit clear about what each of those columns mean. But let’s think about some tips to reading the financial reports. These are useful when you’re first starting out reading a report if you’re new to the financials or you’ve never understood them before. So, the first tip is to start with the chart of accounts. That’s the list of income and expense items that you’ll see in the first column, and make sure you understand what each item means. Take the time to clarify that with maybe the finance person or your manager to make sure you understand it, because you may not have been responsible for putting this budget together. The second one is look at the first column of numbers just by themselves and work out if you’ve made a profit and loss for that month, or of the period of time that the column is talking about. So, look at those columns individually rather than looking at the whole report. Look at the year to date and work out if you’ve made a profit or not. What is that telling you about what has happened so far?
Then of course, as we’ve mentioned, check if you’re close to the budget or not. If you’re not close to the budget, work out why that is. Is it about things just aren’t going to plan in terms of the timing, and we’re still gonna spend the same amount as we expected. Or you said, they were really trying – finding it hard to sell tickets. Like is the example with the WoopWoop project. We might need to get some extra support. So remember that some reports might have other columns, or it might have less for columns. Make sure someone at your work explains any columns that we haven’t spoken about today, so you’re very clear. Nadia, I’m sure that you’ve got some other tips for us to read in the reports.
Yes, Jenny. As a blind person, I find it difficult to scan a whole spreadsheets. So I find it difficult to see all columns at the same time. Particularly when the reports are large. So I often catch up with finance person to get some help finding out what’s going on. So I might ask what a particular column means. I might ask for a summary over what’s happened. I might be able to spend some time myself looking at figures. And I might ask question about is it – am I reading this correctly? So, is this showing that we have spent this money, or that we still have some to spend. Tips really are don’t be afraid to say you don’t understand.
That’s a great tip, Nadia. Isn’t it? Talk to your manager about the differences, and ask them if you have any questions. And as Nadia’s explained, also make sure you’re using finance staff if you have them to help to explain those things that you might need clarification on, or…
..just some of those words. What could go wrong with the financials? There’s many things. And as Nadia has explained, in relation to the budget, there’s many things that could interrupt some of the things that you’re doing in your project. You could spend too much money on one particular item. Sometimes you might not have a really clear picture, you don’t receive the information all of the time. And by the time you received the next report, you’ve overspent. So keep an eye on how much money you’re spending. And try to make sure that you understand the budget and how that was made up. Sometimes, the cost of things just goes up. The cost of food goes up, the cost of transport goes up. And there are things that you are not able to control. When you’re starting the budget, it’s good to think about as many risks, and the things that could go wrong as possible. What about, for example, if the project is behind, and you need to hire more people to really get it finished? That is a really big expense. And so that part really blow your budget out. You don’t get the income that you thought you’d get. So we know with the WoopWoop event project, the luncheon , we’ve sold more tickets – but what if the sales stop there? What if we don’t get more people coming? Then, how are we going to manage that? Nadia, are there any things that you can think of that have gone wrong for you when you have run projects, and what you’ve done about it?
One of the main things for us is accessibility cost. So, for instance, we run projects where we thought we might use Auslan interpreters for women to come to our events and participate. Then public transport goes down. So, the women who would come in to use those Auslan interpreters can’t come. So what do we do? Then we need to think maybe about live audio captioning which is way, way more expensive than using our face-to-face Auslan interpreter. And this happens to us late last year for one of our projects. So we have to spend probably about another $1000 more than what we had budgeted for for accessibility costs. The other thing that often happens is when public transport goes awry. There is discussion about who pays for the taxis for the person to come to the event. Sometimes, the public transport company will pay. Other times, they don’t. So there’s all that discussion. Catering, for instance, we allow for dietary requirements. Sometimes, the dietary requirements can vary quite significantly which makes the budget different, in terms of it either might not cost what you thought, or it might cost more than we thought. They’re just some of the things that we’ve come across when we’ve been organising projects, Jenny.
Thanks Nadia, and they’re great things to talk about. And, I guess, if you haven’t been involved in making the budget. Look at you now talk about some tips for making the budget if you’ve never done that before. Often people think that you need to be a numbers person to make up a budget. But in fact, you actually need to just know a lot about the project. Sometimes you may have joined the organisation after the project budget was developed. So it’s your job then to find out about how that budget was put together. But some of the tips if you’ve been asked to make a budget, first of all, don’t think about the numbers. We encourage you think about what is going to go on in your project. So make a plan for your project. Go to others to get help with all of the details of the actions that you might need to take to finish the project if you haven’t run a project before. Think about how long it might take to finish the project.
And that’s a really good thing to think about. If we need to think about more staff, if we have to employ more staff, that’s quite often really expensive. Know as much about how your project will work as possible. And what are the things that could go wrong, and how you would fix them.
Ask people how much things will cost. Ask them to write it down in a quote for you. A quote is just an estimate of the amount of – people are going to charge you to do the work that you’ve asked them to do. So whether it’s a catering quote. It might be a quote for some equipment that you need to buy for the project. Get them to send that in, because sometimes, that’s important for you to have for your funder. If you need to report back to your funder on things that you’ve spent your money on. Also find out the cost of staff for the time they’ll be working on the project, it’s likely to be the biggest expense that you’ll have. And so knowing how much staff will cost and how long they’re going to work for, will be really important for you. You need to hire any equipment or can somebody loan it to you. So hiring equipment can become very expensive, but it might be that you can find another organisation who has that equipment that you can borrow for the period that you’re doing the project. Or if it’s to run the event on the day, such as the luncheon, it might be that you just need to borrow something for the day. So think about other people who could help to support some of the costs that you might come up against. So you don’t necessarily have to pay money out. You might to get, get that as value in kind support from another organisation.
To help to put together this budget, it’s good to do a great big to do list. And if you haven’t done a project before, make sure that you also watch the VCOSS seminar on project management, and it will help you to understand about how to plan your project. And this helps you to get it right. Nadia, throwing to you. Any other tips that you have for budgeting?
Yes, Jenny, looking at previous projects that have been conducted that are similar, grade reports of these projects and note where the projects didn’t go well or see where things did go well. If the budget has been formed before you started the project, it’s good to understand how the numbers were decided on and ask questions about that. Also let your manager know, if you can see that there’s something that has been forgotten and finally check out webinars like this one.
Yes, it’s always good to, to, to watch and learn. Isn’t it Nadia? When people have had experience in running the sorts of things that you’re doing before, and just remember that Nadia and I have made lots of mistakes along the way as well. And that’s why we’ve been so used to, being able to give you tips on what could go wrong, and other things that can happen in your project. And of course, read in your financials. So, Nadia, is there anything else that you might have questions about or other things that you think are worthwhile discussing in relation to the financials?
Just, I guess one really the biggest, most important tip for me is don’t be afraid to say you don’t understand and ask questions because often people will be afraid to do that. And then when it comes to midway through the project or the end of the project, and everyone expects that you understand what’s been going on and then everyone realises that you haven’t because you haven’t ask questions, that can be really confusing for everybody. So just don’t be afraid to admit that you don’t understand I do it and I have done it quite often.
Thanks Nadia, and I agree, remember right at the start of this webinar, we talked about understanding what each of the sections of the report means. And often people will not admit that they don’t understand what the, the report means. So we’re doencourage you to really clarify all of those columns on the report. If your information is given to you in another way, it’s a matter of making sure that you understand, and you can relate it to what we’ve talked about today. Nadia and I both hope this workshop has helped you to understand your financial reports and those things that you need to read. There are further reports that you might see from time to time. And these reports include things such as the profit and loss report for the whole organisation. So if you take on a manager’s role or if you become the leader of the organisation, or if you’re ever sitting on a committee, you might look at the profit and loss for the entire organisation, rather than just the project as we’ve looked at today. It’s exactly the same thing. And the same reasoning that we’ve talked about throughout the course of this webinar, it’s breaking down the columns and understanding what the report is actually telling you. So while the numbers might be bigger, it’s still the same information that you looked at. So don’t be put off by the, by how big the numbers are. Remember to interpret it about ‘is this where we expected to be at this time of the year?’. So looking at the budget and comparing those to the actual numbers that you see on the report.
And likewise, at other points in time, you might see further reports such as the cashflow forecast report, and that’ll help you for your organisation. If sometimes you don’t have much cash in the bank available for any given reason. that will tell you the money that goes in and out of the bank account. So it will be able to tell you whether you can spend money at different points in time or not. Another report that often people see when they’re the manager or they sit on a committee, is the balance sheet. And the balance sheet is the report that shows all the things that an organisation owns as well as what they owe. So think of the things that your organisation owns, it’s the money in the bank. It’s the equipment that you use to run the organisation and those things that you owe might be invoices that you haven’t paid yet, or it might be that you owe the bank some money because you have a credit card and you haven’t paid that off as yet. It might be that you have some staff leave liabilities that you need to pay for if the staff leave. So those are the things that sit on the balance sheet, but of course, that’s a report for another day. Thank you so much for joining us today. For more information and resources on financial information, you can contact us here at non-profit training, or of course, speak with the VCOSS or DARU or any of your organisations. And Nadia is always there at Women with Disabilities Victoria. Thank you.
Welcome everybody to our webinar on project management today. Thanks so much for joining us and we hope we get a lot out of the session today. We’d like to kick off by acknowledging Aboriginal and Torres Strait Islanders as our nation’s first people. And we would like to pay our respects to the Traditional Owners of the land that we’re meeting upon today, the Wurundjeri people. And we’d like to pay our respects to there Elders past, present and the emerging leaders. As well as that we’d like to say, thanks to VCOSS for making this presentation possible. VCOSS is the peak body for Victoria’s social and community sector, and VCOSS creates a better and a fairer and a more just Victoria. So who are we? Today you’re working with Jenny Holliday, I’m a facilitator with non-profit training and we work across the country with charities and not-for-profit organisations to help them with some of the tricky parts of the work that they do, whether that’s in governance or in understanding the financials or in this project management. And we’re really lucky today to have Jeanette Lee from Yooralla to join us. Jeanette, would you like to tell us a bit about yourself?
My name is Jeanette Lee and I’m the customer rights and empowerment worker at Yooralla. This means that I help people to learn about their rights and to speak up for themselves and to achieve their goals and what they wanna do Snd I help to help them to overcome the obstacle. I have run several projects the last 25 years of working in as a community development worker. Yeah, some of the projects have been the parents with the disability community project, peer support project, consumer participation project and the self-advocacy project. So, these are all about people’s rights and helping them to speak up and to be able to get their needs met and to make changes in the community and the services that they receive. So, I have a disability myself and I’m quite passionate about disability rights and really want to make changes in our society. I have a physical disability and use a wheelchair and pretty much, you know, trying to overcome the obstacles and live a normal, equal life as everyone else and, you know, have lots of different interests and yeah, but to just get, you know, get things happening and, you know, social justice is very important to me.
That’s great. Jeanette, thanks so much for introducing yourself. I’m really thankful for you to making your time available to us today, because you’re, I know that you’re going to add a great deal of expertise and experience into taking us through some of the challenges of project management. Cause while we’ll talk about the theory and having a great framework in place, today is about understanding that not all things go as planned. And so what are we going to talk about today? So what, what is a project? We’ll talk about that. Cause some of you, well, most of you, I imagine are new to project management and running a project. So, our goal today is to make you a little bit more confident to go through a project and understand the bits and pieces associated with it. And as I say, what are some of the things that can go wrong? And Jeanette and I have had quite a bit of experience of the things not going that great. So, we’ll talk about therefore, what is project management? You’ll see that project management is in blue. So any words in blue today we’ll explain those words that you may not have heard about before. And we’ll talk about that through the course of this session. So, we’ll talk about project management. We’ll also talk about your ideas for a project, because sometimes they come from you and therefore you become the leader of the project. Sometimes they come from other people. And I know that Jeanette’s got some thoughts about those things
Wwhen we get to that, the ideas behind the project and where they come from. We’re also going to look to make a plan for managing the project and plans are critical to make sure things run as well as they possibly can, even though sometimes they reach hiccups but we’ll talk about how to avoid some of those hiccups and make sure that the project stays on track as much as possible. We’re going to talk about the management of the project. And that is about the person who is looking after the smooth running of the project. And sometimes that’s a little bit challenging because they’re the ones who pull everyone together and make sure that they’re doing what they are being asked to do. And then we’ll have some time at the end to have some questions about projects and in particularly that’s where we’re going to get Jeanette to make some comments on that. But what we’ve done today is to pick a project and to use as an example. And the name of the project is a place for everyone. The goal of the project is to promote employment of people with a disability. Now the goal of the project doesn’t necessarily mean that that’s what we’re aiming to do or the activities list, that means what we’re hoping after we’ve finished the project, will be achieved, what will be different for people and their worlds.
So, let’s jump straight into what is a project? Well a project is the work that we plan to do over a set amount of time. And there are three different paths to making up a project. So, sometimes you’ll work on a program rather than project and a program is ongoing and that might go for a number of years or it might be a continuous program. And while you might check in on that program along the way, certainly it will keep going and we know it’s going to continue. Whereas a project is often something that we kick start because we think it’s a great idea. We come up with some ideas about how we can make people’s world better. And so it is over a period of time that might be over a month or over six months or even over the course of a year. So, the three things that make up a project are that it has a start and finish time. It also has a goal or goals. And lastly, it has a list of things to do, so out of the goals, we’ll, we’ll make up a list of those things that we need to do. So, it’s clear to everybody who’s working on the project, exactly what it is they need to do and by what time, so the project can be completed. OK, so here we go, we have a start and the finish time for the project. So it might be, you’re starting the project yesterday as an example. And it might be that you’re looking to finish the project by the end of the year. And that means you’ve got nine months to finish the project. So, that’s a good amount of time, but sometimes it might mean that you need a little bit more time, but I’m gonna call on Jeanette here, Jeanette, what if we don’t finish the project on time? We can see here we’ve got nine months, but what if we don’t finish the project on time?
JEANETTE LEE: (08.04-11.03)
Yes, yeah, there can be obstacles that come up. For example, a project that I was going to run starting, you know, pretty much now, was to, to set up some self-advocacy groups in the rural area and because of the virus, the coronavirus pandemic, now everyone is stuck at home. So yeah, I guess I have to look at, you know, what can I do? Is it possible to do things online, make connection and networks and reach out to those clients? A lot of our clients don’t have setups with computers, so it may not be possible with some people. I might still be able to just get some of the preparation done, research, but I may have to delay things. So, we’d need to speak to the funding body about that. So, you know, I, we will be contacting them and seeing if we can extend it. So sometimes yeah, it’s not a strict date that we have to finish things, but sometimes with, with some funds that we get from external funds, like grants and trusts and government bodies, there is certain dates and those cases you need to communicate with the funding body and some, you know, usually they will be flexible, they will understand.
So, so yeah, communication is important. And just to look at, you know, what you can do now and what can be extended and worked on later. And if we don’t finish on time and we’ve been working on the project, yeah, looking at an extension, getting the funding body to extend and we may look at another grant. So we’ve, we might find that we’ve, we’ve, you know, done quite a lot with the project. Like with the parents with disability project, we, you know, the project was to find out the needs of the parents and to look at how we could, you know, educate the community about their rights and to work, educate governments and to get changes. And, you know, we, we got a lot of interest in it. So, at the end of the year when we got funded to do a research paper, you know, there was lots of other issues that needed to be followed up. So yeah, then we looked at getting other grants and getting the organisation to put some of their own funds and tools, you know, giving me time to work on it.
Great Jeanette, thanks for that detailed description and particularly what came across to me there is that you really kept communication going particularly with the funders and any other stakeholders. So, stakeholder is a group of people or a person who has particularly interest and with Jeanette’s project working with people that she’s now not able to work with because of the coronavirus, keeping them all updated so they know what’s going on. And when they’re expected to be able to be engaged again in the project. So, that’s a really great piece of advice Jeanette, is to keep that communication going. Many people don’t want to talk to the funders, they’re a bit concerned that the funder will say, oh, well, we need to have our money back, but making sure that you give them plenty of time, that you talk about your new, maybe new timelines that you develop as a result of the project being behind as well. And that’s really useful for a funder, because they have their own goals as well. And remember when you receive funding from a funder, you’re helping the funder to achieve the goals that they’re wanting to achieve from the community project too. So, they’re really interested in making sure that you’re successful.
OK, so moving on then to a project has a goal or goals. And so what would these be in relation to the project that I talked about before we are set up? So, three goals that I’ve picked for my project, more people with a disability are employed. So, ‘a place for everybody’ is the name of the project. But one of the things that I’m hoping to have as a result of the project that I’m running is that more people with a disability are employed. So I need to think about what would make that happen. Another of the goals is that my workplace values the skills of the person regardless of what disability they have, we’re going to make sure that our workplace has equity and that is accessible and inclusive for all. So that’s what I wanna see in my workplace by the time I’ve finished my project. And the other one is that my workplace has disability confidence training. And the reason that that’s really important is that some people would love to work with people with a disability, but they were just a little bit nervous. And so the role of confidence training is to make sure that everybody feels really confident and includes really well all of those people and regardless of their abilities into the workplace. So Jeanette, can you tell us about some, you talked about some of your projects, but what some of the goals were for the projects that you’ve run?
OK, well, with the parents with a disability community project, our goals we had five main goals, which was quite broad. So this is what came from the actual parents who have disabilities themselves. So you know, the goals that they wanted to achieve in the short term and I guess in the longer term. So it was to encourage and empower parents with disabilities to be actively involved in directing the project. So then pretty much you know, directing and having the voice educating the community about the rights of parents with a disability and their needs and issues. Working with and educating the government and service providers to provide relevant and accessible services to parents who have disability. And then to develop and facilitate peer support network of parents and potential parents who have a disability in Victoria and in long term to look at developing an information and resource service for parents with a disability. So, yeah, so they were the goals that we had and they were quite a few, I guess projects that came from that, you know, we got funding for certain parts of it. So there were, you know, probably three lots of funding cause this project went probably over, you know, 10, 15 years, but they were smaller projects. So there was a larger overall steering committee and project that we kept on going, but there were small projects that we got funding for within, you know, that time.
Yeah, terrific, Jeanette. Thanks for describing those projects. And as Jeanette described, some projects are really large, others are a lot smaller. And so as a new project worker or somebody who hasn’t run a project before, it’s great to talk to people with experience in running projects to get a bit of a feel about some of the things that they might see that you might not recognise as some of the challenges of running the project because we get so excited don’t we? About running a project and the idea behind the project that sometimes we gloss over some of the detail that we need to understand. So, so far we’ve talked about the project has stages and the remember the project is the work we’re going to do over a period of time. And the first part of that was about it start, it has a start and a finish period. And Jeanette has described how some of those have extended probably more to programs and also that the project has a goal and the goal is what we’re wanting to achieve out of the work that we’re doing. And the next part of the project because we did say it would have three is to, it has a list of things to do. And so my project has, I’ve just started to think about some of the things that we need to do as a result of a place for everyone project.
So I want to meet with human resources. So they’re a group of people within a workplace you might have a large workplace or a small workplace, so it might just be the manager and talk to them about what’s in place to make sure that we have good processes in place to allow people with a disability to work in our organisation. Is our workplace accessible or it doesn’t mean that we exclude people who are in a wheelchair as an example? We need to overcome that. So a good place to start, is to talk to the human resources or the person who looks after the people in the organisation. My second thing to do is list 10 jobs in the workplace and how they can be filled by a person with a disability. So making sure that it’s clear to everybody how to break down their roles, so it’s clear that they can be accessible to everybody. The third point there on my to do list is to develop a policy on accessible jobs. So making sure that when everyone starts that anyone who’s employing people within an organisation and whether they’re employing people or even whether it’s volunteer workforce, making sure that all of those tasks are accessible and inclusive to everybody. And part of my, place for everybody project is to host a lunch to discuss ideas about inclusive and accessible employment.
There’s lots of other things that I can think of that would make my project successful, but they’re just an example of some of the things that you’d have to do. Now Jeanette, you’ve worked on a number of big projects, as you’ve already described to us. And so what is some… how do you control that big list of things to do when it becomes really large? How do you make sure you don’t leave anything off that to do list?
JEANETTE: (19.41 – 21.05)
Well, I think that being accountable to maybe a project steering committee is very important so that they can be reviewing things and sometimes, you know, they may realise, oh, we’ve got too many tasks and now you can say a look at maybe we should prioritise this one, you know, things might be dropped and other parts added on. So I think being accountable yes to steering committee and maybe there’s management that, you know, wants certain priorities, that checking back with them. Yeah, I feel having a steering committee made out of the actual consumers or the service users, it’s very important that you really get to meeting their needs and not going off on some other tangent. So, for me, with projects, I’ve always had, like a steering committee to help direct, you know, what I’m, what we’re doing. And, you know, if I’m hiring any project workers or consultants, that you know, we’re really there to meet the needs of you know who it’s gonna affect, the service users.
And that then leads us on to project management. What is project management? Well, Jeanette, talked about a project steering committee and that, as she described, have some overarching view of how the project is tracking. And Jeanette describes how it’s important sometimes to have people who are going to be impacted, by the project involved in that steering committee. So you’re constantly checking in to make sure that you’re heading in the right direction as Jeanette described. The project management, it might just be that you have somebody who’s the project manager. And this is just checking in that everything’s going smoothly, making sure that everyone who is involved in the project is well informed and up to date with the things that they need to do. So sometimes they’re the herder, if you like, the person that brings everything together, ticks off the to do list and make sure that the resources are available for those people who are working on your project. Remember, sometimes projects are large, sometimes they’re just small projects. So it might just be one person who is responsible for doing everything.
So you need to make sure that if that’s you, that you’re looking after yourself, as well as managing the project, that you’ve got something in place to check that everything is being done and you have some people as Jeanette described in the project steering committee to help to bounce ideas off, because sometimes it’s a little bit difficult to make sure that things are done on time. So again, we’re going to go to Jeanette’s experience with this. So some of the things as a project manager – it can get off time. Sometimes you can fall behind time, sometimes things might get in the way of the project being successful. Can you describe some of the things that as a project manager, that you’ve needed to deal with Jeanette to get things back on track?
OK. Yeah, I guess, you gotta look at, you know, sometimes people can’t, you know, have said they’re gonna commit themselves to be involved, to be involved in the steering committee and they may not, you know, turn up to meetings. So, I think we need to look at, you know, they may have had the interest and the commitment, but, you know, I guess what are some of the difficulties that they’re having, you know, maybe getting to the meetings. Often with people with disabilities, they have problems with public transport using public transport. They may actually need cab fare, taxi fare, so if you can support them with transport, that would be really good. Yeah, could also look at connecting people by conference call, so they can still be involved as well. You know, sometimes people don’t have time, you know, to do what they say they were going to do. So, you know, I guess it depends whether they’re paid project worker where they’re, I guess more accountable and need to, you know, get through some of the tasks.
So you need to be on top of that and just check, you know, what difficulties they’re having and how you can assist. And I guess with volunteers, sometimes they get caught up with other things. So you know, you might need to look at how to support them to still be involved, or if they really can’t be involved then you know, you can say, OK, you know, you had good intentions, but you’re now with different commitments. So good communication, as we often talk about is, you know, one of the main keys for things to work in projects. Yeah, and to state and clarify your goals and your mission and agreed tasks. So, they’re the things I guess we need to focus off on, you know, where are we going, we’re still having the same vision of where we want to get.
That’s great, Jeanette, because, as you described, each time you’ve spoken is communication is really important and the project manager in order to manage the project or make sure things that are going on to plan and tracking well, and you’re looking after the people in the project, you really need to be communicating all of the times. So they’re the key task, aren’t they? And the key skills of a project manager. So now we know what project manager is, or where did your ideas come from? Now, I don’t think in the non-profit sector where short of ideas, we always come up with loads of ideas. Usually it’s the resources that, and the time that we have available, whether it’s time or money, sometimes they’re the things that are lacking. But quite often, I find myself thinking, ‘what if?’, and how can we make the lives of people better?
How can we improve some of the things that we’re doing here in the workplace? And so thinking through those sorts of things quite often means that you come up with some great ideas. So why do you think your project is a great idea? You need to be able to explain that to people because you might come up with a great idea, but others might not think it’s such a great idea. So you do need to be able to think about why do you think your project is a great idea. For our ‘a place for everybody’ project, I think that that is a great idea because it makes more people strive towards an equitable and just society where all workplaces are accessible to everybody regardless of their abilities. So that’s why I think it’s a good idea but people will have different views on why my project is a good idea. So it’s good to talk about it with other people. And so Jeanette, an idea for a project quite often, it comes from different places have you had that experience where the project ideas have come from different, different areas?
Yeah, sometimes, often it comes from, individuals that have a passion or interest in an issue and it might be the service user that wants to make a change in something.
It might be the worker that sees gaps in services and seeing issues that are not being addressed by society. So I think a lot of people may have good ideas, but how do we make it put it into to, make it reality is an important thing. So, I guess ideas can come from different places. It can come from management.
It may be that an issue that other organisations are dealing with and they want to be up with things as well. It might be even just using up some leftover funding, at the end of the financial year and they need. And they all say, “OK we’ll do a project, what about this or that?” And they may ask staff, one of the areas that we’re looking at YOORELLA is the LGBTQ area and we started a project in that area. So, there might be the ideas may come from research and consultations, research going on in different areas in the disability field and our research work and may mention that issues to us. And then we might also look at developing a project from that.
There’s one set where clients are voicing their needs. And then you work together with them. So with the parents with disabilities project which I mentioned, it came from a parent who has a disability who was now, older and had struggled but brought up her children successfully and now with wanting to help other parents with disabilities. And she wanted to set up like a self-help group, a parent support group. So I worked with her on some ideas, but I thought, well, what you’re saying was that parents with this wave once supported in our community, by services and programs, government funding, they think to miss out. So I said, what about we make this broader than just having a parent group. So that’s where the project came from. We said, OK we’re gonna have run a forum, public forum for parents whose disabilities and, and their supporters to look at what are the real needs of parents disabilities and how can they be addressed. So it was from that, that we started, this project looking at researching the needs, getting hearing from parents with disabilities and then looking at what their goals are. And as he said, it’s actually before, the goals were to start to educate the community, governments set up support groups, look at how we can influence service delivery.
And running forums for the community to educate them. So, we can make ideas into reality. And that’s what I like doing to really look at what if, what are some real issues and gap and try and make it happen. But sometimes someone might have an idea, but they don’t know how to get it to happen. So I try and work with people to say, OK what can we do to create a project around this? So it might be an informal project. Sometimes there’s no funding involved, but we’ve got a committed group of people and they want to do certain things to get involved like giving talks to the community about disability awareness. So, we might set up with what they want to do and look at what resource we can get from the community and within the organisation. And then that could lead for us to get some funding to get some more resources. So often things might start from the grassroots and no funding but then later it grows, if people are passionate about really pushing things and saying, this is really important, I think something needs to be done. So, there’s those starts from the grassroots. And I think they’re really important. And I guess there’s other projects that more fully funded and have very strict timelines and what you do. And then when you finish you may not still be involved.
But then often from projects that comes issues, that need to be followed up or recommendations made. So, it depends on I guess, the commitment of the organisation and, and the people involved to whether things come out from that project and changes are made and followed through.
And Jeanette, that takes us onto our next slide. Certainly I was thinking about from little things, big things grow as you described, having things come from the grass, grassroots and growing. And that’s the value of really talking to others about your idea, because what you described there was that someone came up with an idea and it was very, really quite local. But by talking about that and sharing that with others, you were able to grow it and grow the resources available, to make that a lot bigger. And I know that project is going really well and starting to spread across the country, which is way beyond what the original idea was. So, I guess the changes your will make, what you’ve described Jeanette is what will be different when the project works and how it will make people feel. So it’s good to think about these questions when you’re coming up with your ideas around your project, because in the long term, it’s good to think, well, how will this change people’s lives? What will be, be better as a result of it? And who might be better off? They’re terrific questions to ask. And how would it actually make people feel? And not limiting that to just your inside world, thinking about how we’ll make, what differences will make out in the world. So, as an example, ‘a place for everyone’, the project that I’ve been talking about today, it will make a difference out in the world because it will raise awareness for everybody about some of the barriers that people living with a disability are facing in terms of work, getting into workplaces.
And so by breaking down those barriers and making more workplaces accessible, we’re going to have a better world. But inside our world, it’s going to make the people involved in my workplace feel really good about the fact that they’re involved in making it a just, an equitable society and great workplace. And so is what happens in outside as well as inside. So do ask the questions and you might have a chance to write those things down, so that you can think about those when you’re coming up with ideas about your project. And those answers will also help you to decide if your project worked, because you’re able to then talk to the people who are involved in your project, and who’ve benefited from it about whether things are different for them. And how has it, how do they feel as a result of that? So that’s a really good thing to do, but now we’re going to have a look a bit about the plan. So when you’re planning, just like Jeanette has described it’s good to get people involved in this. Some people like to keep it a little bit to themselves until it’s, they feel like it’s ready to get the idea out there, but it’s great to brainstorm. And by brainstorming, I mean, collecting ideas from others, by talking to them about it, because they’ll have a different point of view. And so getting different points of view is really good for you to hear about the way things can be done otherwise, but also the way other people might be doing something similar.
So it might just be that you can gang together or join together with other people who are doing things. So what would we, what would we do? So having a clear picture of what it is you’re actually going to do, and then that’s usually your to do list. Who will be on the team? So Jeanette described before about having a steering committee, a project steering committee. So having that overarching group, but also who is actually going to help you with your to do list? And who’s going to collect those people who want to benefit from the program? So having a clear picture of what skills do we need to have in the team to do the things that we want to do? And therefore who do we need to gather together on our team?
Who will we help? So they’re the people who will benefit from the program or the project. And Jeanette has been describing that quite clearly throughout her examples of who, of her projects, who is going to be helped? In some cases, it’s a person with a disability, some cases it’s people who support them and surround them. So being clear that there’s a number of people who might be helped out from your projects. So who else can help? This is about saying, well, who’s doing something similar? Or what organisations are doing something similarto me? Or have we done something like this in our organisation before, it’s good to get their experience to say, well, what went well and what didn’t go well, and therefore, who can help us. Some people might want to put in some money from their organisation, or give you some in kind support. In kind support is where they giving you their resources. And it might be equipment or it might be their staff to, to be involved in your project. So it’s good to think about who else might be able to help here. How much will it cost? So the budgeting, you might think I’m not a numbers person, I’m really afraid to put together a project budget. But really, once you’ve got a clear plan, it’s just a matter of saying, Well, how much will that piece of my to do list cost?
So one of the things on my to do list was to speak to human resources or the people in our organisation well, that costs just my time. And so that’s not a cost to the organisation apart from my time. But if we then are hosting a lunch, we need to think about, well is my organisation going to host a lunch so that we can get everybody together and talk to them about making an inclusive and accessible workplace. So we would need to then think about the cost of the catering. But likewise, Jeanette talked about maybe having to give some taxi vouchers to people who are going to be part of your program. What tools will we need, that is about the things that we use to make our projects happen. So it might be computers, it might be a whiteboard, where we put all of our ideas up. It might be some stationery and pens and pencils that we use. They can be any number of things that you need to help your project roll out really quite well. So think about what those are that are needed as well when you’re doing your planning. And who needs to hear about this? So Jeanette has talked about spreading the word, making sure that the managers or the CEO, maybe of an organisation, hear about what you want to do.
And so they know that it’s a great idea. But likewise, other organisations, it may be interesting to share with them. And funders, of course, to test out whether they might be interested in funding. We need to come up with a list of what can go wrong and Jeanette is going to talk about that just a little bit later. But that might sound like it’s bad news. But it’s good to think about the things that might get in the way of you being successful for your project, so that you can come up with a way Well, if that does happen, what will we do about it? And Jeanette talked before about, well, what if somebody doesn’t come to a meeting? What are we going to do? Do we still go ahead and make decisions even though everybody is not there. So they’re good rules to put in place when you run in your project. And how will we know if we did it? How do we know whether we’re successful? That’s really important because it’s great to make sure that you celebrate when you achieve what you set out to achieve. So Janette any other important things about sustaining the project is that you need to think about in the plan?
Yes, I think it’s important to really hear from, from the people that are going to be affected by the project that you’re trying to improve things for them, the service users, hearing their voice and get them involved in directing and running the project and being involved. So that they’re not just the client but they actually contributing there and they often want to be involved, you know, in having a say in, in being involved in how things are running, services are running, so I think that’s very important hearing the voice of the clients. You’re running a public forum to really hear the issues. So you might have known of certain issues but you need to really network to hear, you know, what other organisations doing, what are some issues they are grappling with in this area. So I found running a public forum is often important at the beginning and developing a steering committee and you know, if there are funds to hire project workers trying to get project work that are very much passionate about the area interested in fix them, so there may be, you know, people disabilities that are wanting to contribute and, you know, need a job as well. And sometimes you might just import them being in some areas, but you know, the information and the value that they have the lived experience is very important.
Again, just expanding on all of those areas, and it just shows how important it is to plan before you get started on your projects, so that you’ve got a really clear picture of where you want to go, and who you need to engage and talk to. And having that plan whether you make it in a great big whiteboard picture with all of the dots connecting all of the activities, or whether you put down something like what is on our screen at the moment. So it’s, what would we do? So that’s your to do list, and one of them might be to hire staff. And so the actions are listed there – list the skills that are needed, write a job checklist, let everyone know about the job and decide who will be the staff member. That’s when you’re selecting. And you can see all of those things have a timeline. So that’s our target time by which we want to have achieved that. So that everybody knows and everybody works together to make sure that that particular action or to do piece on our to do list is actually done by that time.
And who will do it, sometimes it will be the whole team, sometimes it will be one person or two people working together. So write down who is involved in making sure that that piece of the project is happening. How will we know it’s done? So be clear about when you know that that task is finished. And make sure that you check it off on the checklist of it of the project where everybody’s sharing the information, so they also know that it’s done. And that just helps with that communication that Janet has talked through every time that she’s spoken. What will we need to do it? Well, they’re the things that I talked about just before the tools, all the resources, having a list of all the things that we need to do to complete each and everything on our to do list is an important part of that. So Janette what are some of the tips and tricks that you might have to capture all of the information for your project? Do you have a list like this? Or do you do it in some other way?
I think it is important to have an action plan that, really reflects what has been decided, you know, other goals and strategies and actions. And it needs to be easily understandable and in easy English and point form. Yeah, so that people know, you know, what their role is what they going to do, and that when they need to feedback about something. So, yeah, having it clear for everyone what the expectations are for the project. And yeah, I guess, you know, we got to understand if, if for some reason they can’t follow through with something, but I guess it is good to have it clear so that people know what jobs need to be done by certain dates. And you know what information they said they would bring back to the group. So, you know, we can just sometimes remind it to give them a reminder and follow. Follow up a bit. And I guess that’s what the project manager role is, you know, to try and bring things together, coordinate people, make sure everyone is happy with what’s been decided, and the different tasks that have been allocated.
So you could make a larger form, but, Jeanette, mentioned, make sure that it’s nice and easy and accessible for everybody, that things are ticked off when we’ve completed them, again, your teammight just be you, you might be the only person working on your project. And so it’s good to have, again, people around you that you’ll bounce some ideas off or if things are going well, or not well. Likewise, if you have a number of people working together on your project, it’s good to have some check in times throughout the course of the project, to make sure that things are going well, and capture where they’re not going quite as you expected, because you learn a lot from when things go wrong. And I guess that takes us on to our next slide is what could go wrong? What are some of the things that make projects go off track and get in the way of you doing what you want to do? So one of the things that we’ve talked about is that when we are on the project, we do get really passionate about it and very excited. And sometimes we don’t then consider all the things that could get in the way of going wrong, but we do need to manage them. We do need to think about those things and have something up our sleeves to think about how we would manage that, if it did go wrong. Jeanette, what is some of the things that have gone wrong? Because I know, it’s not just about timing, sometimes it’s about the way people work together. Can you give us some pointers on that?
Yes. Often, you know, we have different personalities that are working together. And there may be personality clashes. People work in different ways, and they may have different ideas. So it could be the role of the project manager to try and, you know, work through those issues with with, you know, the people involved, and how, look at how we can work together and communicate better. Other things that could go wrong would be there’s not adequate resources, things, things like, you know, money for transport. Being able to get venues, pay for venues, you’ve run out of money. So, find that you’re limited in what you can do, you know, you might want to do outreach into maybe the rural areas, to hear what they have to say about some issue but your funding might not allow that. Because, you know, it’ll only be able to cover, you know, some, you know, refreshments and maybe a venue but doesn’t help with people’s travel or transport. So, yeah, often you have to work within confines of a funding unless you can get volunteers and extra bits of funding to cover those other areas.
Time as we talked about can be an issue that we’re running out of time. And then we need to look at prioritising what are the important parts to focus on. And then those other parts that we didn’t have time, we can look at another project following up on trying to get some funding or looking at how the organisation can support, us to continue in those areas. There could be conflicts of interest. So the management might want a certain way of doing things and, you know, the worker, the project manager might you know, if hearing what, what people want in the community and the clients want, and a, there may be some conflicts in that. For the management might need to limit things to. So, yeah, there’s those issues of conflicts of interest, where, you know, people’s interests and passions might come again, those that are more, “OK, we got to keep the budget”, “we’ve got to do this”, and that’s going to finish or, you know, we don’t have the resources to continue with these. So that those kind of things can come up. And yes –
And what are the things that would be great, I think, is to set some rules as you go. And on the screen, the slide that we have at the moment is to just some of those rules that You might want to consider setting. And sometimes we only need rules when we really need them. And it’s hard to then put them in place if they weren’t there to start with. So some of the things that we find really useful, coming to meetings, thinking about the good things a team are doing. So you’re in a positive mindset, rather than some of the negative things that might be happening in the project. So come with a positive mindset. Let people know it’s a second one, let people know if you’re not able to do what you said that you would do. And so we can get some help for you to help complete that task so that we don’t start falling behind. The other thing is to listen when others are talking. Some people like to talk a lot more than others. It’s important that everybody takes their time to listen so that everyone can contribute and you learn from each other. The next role is to take some time to understand why others don’t think the same way as you because as Jeanette said, there’s sometimes personality clashes. And that comes about as a result of people thinking about doing things in different ways. And so it’s good to encourage people to say, I just want to understand a little bit more about why we’re thinking so differently here and talk through that. So at least you understand each other’s point of view, rather than getting upset about it. Because everyone thinks about things differently. The other thing is letting people know if you’re not able to come to the meeting, which is one of the things that Jeanette raise, which is a common occurrence for projects, or for any meeting, for making sure that you’re respecting other people’s time, and that they’re respecting yours, by making sure that you talk to them. If you can’t get to a meeting. Be honest about what you can do. Sometimes we say that we can do things but in fact, we’re probably a little bit too busy or Just a little bit outside of our skill set. So be really honest with yourself when you taking on some of the to do list. And can I do this? And can I do it in the time that’s been allocated to me? So, so that things don’t go wrong. And be kind to each other on your project team because everybody’s doing their very best. And so make sure that you start from a position of kindness. Jeannette, any quick other thoughts on guidelines that you might have?
JEANETTE: (55.09-55.51)Respect the importance of, of each other, and people differences. I think when we can accept each other, you know, different points of view and then come to compromises. It’s, it’s important…. follow through what you said you would do so that could be one of the rules or agreements that as much as possible that people follow through And I think respect, confidentiality of some matters, you know, talking about confidential issues, you don’t want to be spreading it to other people.
Yeah, that’s right. That’s a great point that you’ve raised there. Sometimes we do things in our project that need to keep just between the project team, so they’re, they’re particularly where it impacts on individuals. So that’s a really great point, Jeanette, thanks for raising that. What we’ve got on screen now is an example of a daily plan. So project managers need to be really organised and so do the project team. And people find it useful if they set their own daily plan sometimes. So what am I going to do when I get into work or as we’re experiencing during the Coronavirus maybe working from home, but setting our list of things that you want to do when you first get in or before you have the first break and maybe some other things that you want to do before lunch, and some things that you want to do before you go home and thinking about, Do you need any help with some of those things? And has it been completed, because if it hasn’t been completed, you need to transfer it to the next day’s checklist to make sure that nothing falls off and you don’t forget about anything that you said that you do.
And it all gets completed. So some people like to have that written down so they can manage their time really effectively. Others are really good at doing that without writing it down. So you decide what’s best for you might be that you have a little whiteboard and you can check things off as you go and you renew that every day. It’s up to you how you keep it, but it just helps sometimes keep you on task. And the next slide is about evaluation. So there you can see that there’s a couple of things when it comes to evaluating your project. Jeanette’s talked about evaluating some things as you’re going along how it’s impacting on the people that you’re looking to benefit, how would you make sure that things are on track. So they’re the active evaluations, evaluation is just checking to see, whether what we said we were going to do is happening. And that’s what evaluation is.
And so here, we want to make sure that in the case of a ‘place for everybody’, which is the project that we’ve been talking about, that the policies are actually in place. So that’s one way of checking. And likewise, you might want to interview some people. That’s what they the diagram at the top of that slide says, it’s about interviewing people to see whether they have received the benefit that you thought the project was going to give in the first place. Remember when we talked about checking in with what’s happening outside of our world as well as what inside our world is So are our policies in place as a result of the project? Yes, they are. So I can tick that off. So that’s changed about my workplace. And when I talk to people within the workplace, how has this project made them feel? Has it raised their awareness, it is terrific to come up with some ways in which you will evaluate, sometimes it will just be observing people’s behaviour. Sometimes it will be interviewing them. Sometimes it might be a, like a survey. So think about how you’ll collect that information to determine whether you achieve the things that you set out to achieve as well. So, Jeanette, in terms of achieving some of the goals, what are some of the successful outcomes that you’ve had as a result of your project?
With parents with disability project community project, some of our successful outcomes were that we did raise the profile parents with disability in our community. We developed a resource manual. We ran workshops for service providers. Support Group for parents with disabilities was organised, developed. And we did a research project on looking at parents with disabilities experience of the child protection system in Victoria. We’ve contributed to the Victorian State disability plan. We’ve developed a website and we launched an issues paper called ‘our forgotten families’.
Looking at the challenges faced by parents with disabilities in Victoria, so there were there are probably a few more things but that project was a big one and we did get a lot of outcome. There’s still quite a lot to do in the parents with disability area, but we made a good start and you know, things from that have grown and developed now there are some other services that was set up recently by legal aid for parents with disabilities and dealing with child protection. So there have been a few other projects have happened after our… so that there was good outcome. Other outcomes of peer support project we, we started off with a project to look at the importance of peer support for each other, so that people disabilities supporting other people with disabilities, providing that emotional support, as well as giving some information and training and going out with others. So we matched someone with a disability with another person with disability and the mentors were given training and because of that you know, the organisation then continued that programme and, and we, you know, running some peer support groups and we’re doing some one on one matches as well.
As we have up on our screen at the moment. There’s a lot to celebrate there from your projects, and Jeanette, I would just like to reinforce the importance of celebrating in some way when you’ve achieved the things that you set out to do with your project. It’s an important part of finishing up on the project, collecting information about what went well. And let’s celebrate that because sometimes projects are really tough going, and they have a lot of things that get in the way and overcoming those barriers are really great things to do. When you’re a project manager, or just when you’re working on a project, overcoming those obstacles and still getting the things done that you wanted to do. So do take time out to celebrate when you’ve achieved those And especially just thank those that have been involved, whether it’s your funders, whether it’s the CEO who allowed the project to go ahead in the first place, or even those people who have contributed even though they might be beneficiaries or they might have benefited from the programme, thank them for being involved in it and from what they’ve contributed, because without their input, we wouldn’t have been able to achieve what we set out to achieve.
So celebrating is really important. So lastly, Jeanette, and I would just really like to thank you for being part of today. And thank you for watching the webinar, and encourage you to re watch the webinar. If you’re a new manager, a project manager starting out and you need some tips and tricks. There’s been a lot of information that was shared with you today. And so take the time to go back to the start and listen to some of the tips and tricks along the way. Write down a couple of extra notes and Hopefully that will help you in your journey as a project manager. But also we would like to thank VCOSS so much for making this possible to share this information with you, so that you can do things better in your projects. So thanks very much VCOSS. And stay in touch with us. Our contact details will soon be on the screen. But of course DARUand VCOSS are also always available. There’s many sources of support for you when you’re starting out as a project manager. So do make sure that you, you look around and think about who those organisations are, that you can turn to for support. Thanks for being part of the webinar today. And we look forward to hearing about the success of your projects.
Yes, thank you very much for your attention and good luck with your project.
Hello, thank you for joining our webinar on governing a community organisation for disability advocacy organisations and Information Services, who are engaged with VCOSS and DARU
Before we begin, I would like to acknowledge the traditional owners of the land from which we are presenting today, the people of the Kulin nation and pay my respects to their Elders past, present and emerging and to any Aboriginal people from other communities who may be joining this webinar. I acknowledge that this land was, is and always will be Aboriginal land. My name is Kaela Hughes, and I’m a lawyer in the not for profit law team at Justice Connect. And I’m lucky to be joined by Nadia Mattiazzo, the acting CEO of Women with Disabilities Victoria. Nadia, can you share a little bit about yourself?
Thanks, Kaela. Yes, as you say, I’m currently the acting CEO of Women with Disabilities Victoria. It’s my last day as acting CEO on the day that this webinar was recorded. I’ve had some experience, setting up some community organisations and being on governance boards. At the moment as the acting CEO of Women with Disabilities Victoria, I work with our board to ensure the smooth operation of the organisation. Just a little bit about Women with Disabilities Victoria. We’re an organisation run by women with disabilities for women with disabilities. Our vision is a world where all women are respected and can fully experience life. We work to empower women with disabilities, to be leaders and influencers. Influence the policies of government and community organisations and influence the way government and other organisation provides services to women with disabilities.
Great, thank you. And I thought it would be worth mentioning that we are recording this webinar during COVID-19. And Nadia and myself are both presenting remotely from our homes. So if there is a bit of background noise, or internet disruption, please bear with us. But hopefully we will get through this without a hitch. So, just a quick introduction to Justice Connect, especially for those not so familiar with our organisation. Justice Connect is a social justice, charity and not for profit community legal centre. We know that the barriers to getting legal help are high. And many of the people who most need help don’t know how to access it or look for it. So anytime they do, it’s often too expensive or complicated process.
So we have teams dedicated to making the law work for good whether it’s people in crisis, those people that can’t afford a lawyer but aren’t eligible for other free legal help, or community groups who are building strong communities. So I’m from the not for profit law team, which is a specialised legal program that focuses on the community sector, and community organisations. So we help not for profit and charities social enterprises in a number of ways. Firstly, we have over 300 resources available, freely available on our website, which is nfplaw.org.au. And these are fact sheets, videos, guides that can get you through the complex legal topics in plain language and I’ll be referring to some of these throughout the webinar. For eligible organisations, our team can also help with legal inquiries online and over the phone. So if you’re eligible for some legal assistance you please feel free to get in touch after listening to this webinar. If the matter is particularly complex, then we can refer your organisation to one of our member law firms for free.
Again, if you meet our eligibility criteria. We also advocate for change civil laws that impact the not for profit in charity sector, topic flag fundraising legislation, tax on DGR, and just red tape production in general. And we also run a certified social enterprise, providing easy to understand legal training, such as today’s webinar, and with any profit being made going back into our free services for the not for profit sector. So thank you VCOSS and DARU for engaging us to do this webinar today. So that brings me to what we’re actually going to cover in this webinar. We’ll be talking about the role of people that govern a not for profit community organisation, and how the law applies to these people. They may be called a governing body, a board or a committee. And I may use all of these terms interchangeably, but they’re essentially referring to the same thing. The law considers these people to be in a position of trust, and therefore they must comply with certain legal duties. And that’s what we’ll be discussing today. But don’t worry, these legal duties are really just principles or standards of good governance and understanding that can help you govern more effectively, while also being confident that all your decisions meet the standards set by the law.
So we’ll start with a quick discussion about understanding the role of a board member and also understanding the organisation that you’re actually governing. And this it could include exploring different aspects of your organisation’s legal status and structure. And this is important because you will only be able to properly undertake your role as a board member if you understand your organisations legal status and the general framework that it operates in. Equally important is to be very familiar with your rules and your purposes of the organisation. So that will be the next topic that we look at. We’ll then go into some detail around the key legal duties that are owed by board members. So those people that govern a community group, and we’ll finish off with a discussion about the exposure board members have to what’s called liability or personal legal responsibility. But don’t worry, we’ll also talk about the protections that are available for you as well. And just a final point, I have to say that today’s webinar is legal information only and not legal advice. But remember, like I said, we are here to help and you’re welcome to get in touch with any legal questions at a later time. So let’s start with the first topic which is understanding your role as a board member. As I’ve said, it’s fundamental to good governance in any organisation and really, ultimately to its success.
So, I’d like you to think about, consider what the key role is of a person who sits on the board of a not for profit. And Nadia I’ll ask you first, if someone approached you and said, I’ve been asked to join the board of a community group, but I don’t know what’s involved, what would you say to that person?
Firstly, I’d say congratulations. This is a great opportunity for you to develop or progress your skills relating to how boards work. If it’s not your first time, it’s always a great opportunity to learn more about boards from a different organisation’s work. I would tell the person to learn as much about the organisation if possible, read their constitution or documents, which tells you about how the organisation is run. Look at their annual report, which tells you about what they do their financial status and their priorities. Also look at documents like the strategic plan, which also talks about what the organisation sees that as important for them to work on. More things I would say would be things like, also find out what your obligations as a director, how often the board might meet, and what other skills the board already has, and what skills you might be able to offer to, to make the board stronger. I would also suggest maybe doing a bit of research about the organisation, find them maybe on Facebook or Google and read about the people and ask others what they think of the organisation and how it works. Do they have similar values to you? If you are a person with disabilities, do they understand about access need? Will you be able to receive your documents in a timely manner so that you can read them and then participate fully in the meeting? Ask about professional development opportunities, if you think there might be some skill that you need to learn. Ask them if you can talk to current board members to see what their experience is. Finally I would say, if you think you can contribute to the organisation, then absolutely go for it.
That’s great lots of practical tips there. Thank you, Nadia. So on the slide I’ve summarised I guess, some matters that boards are generally responsible for many, Nadia has mentioned many of these in her response, but I’ll just summarise them. Firstly, decisions about planning, resourcing in the strategic direction and activities of the organisation. That’s a key part of the role of board. Overseeing risk management, the organisation’s or what are the key risks and making decisions about how to minimise or mitigate those risks. Monitoring the financial side of things, so making sure that the organisation has enough money to survive and thrive into the future. Ensuring that laws are being complied with not being a lawyer, I have to say that it’s very important and we’ll be talking about a lot of these laws today. And representing the organisation at public units, so you know, being the face and voice of your group. And perhaps recruiting or overseeing and supporting senior staff, including the CEO. So those are just a few key responsibilities in terms of the role of the board. Nadia, I’d be interested to hear, do you think it’s important to differentiate between the role of the board and the role of others in a community organisation?
Absolutely Kaela. There should be clear divide between the governance body and management. Governance doesn’t mean that the board does everything themselves. Management and staff I guess they’re in charge of the operational aspects of the organisation. That is the day to day running of the organisation, implementation maybe of the decisions that are made by the board or committees of the board, organising work allocating resources, according to the board etc. The board are there to guide the organisation and support them in making sure that the organisation is stable, sustainable, has good strategic direction and is able to meet all its financial obligation. It’s often difficult, I think for member based organisations and this is really speaking from my experience, whose boards are made up of individual members of the organisation. Sometimes those members find it difficult to see the difference in their role as a director or a board member, and their.
As a member of the organisation, be clear about those differences. Also be clear about what you as a director is responsible for, again, not so much the day to day running of the organisation, but the operational, but the overall direction of the organisation and making sure it meets its purpose. I’ve experienced and seen some instances where board members overstep their role and try and override what should be the role of the chief executive officer. When this happens, really the organisation can lose direction. And everyone, both board the members and staff become unclear about what their roles are. So it’s really important to understand that differentiation.
Thank you. That’s fantastic. So perhaps making that very clear in the board induction process as well, and perhaps having some documentation around, you know, the different roles in the organisation and the different hats that people might wear. So we’ve spoken at generally about the role of the board. But also part of the role of the board or a board member is to understand the organisation itself. So for those of you who are already on a board or committee, this might be familiar to you. But it is useful to remind yourself of this every now and again. And for those of you who are new to your organisation, you might have some homework after today to find out the answers to some of these questions we are about to look at. So, what do we mean by these understanding your organisation? It’s quite a big question.
On this slide, I’ve listed some key issues that you should be across and some questions that you should be asking. And Nadia mentioned a few questions that that all board members should ask at the beginning of this webinar. So firstly, what is the organisation’s purpose and activities? What is the reason that it actually exists. And as a board member, you always need to go back to this and ask yourself whether the organisation is doing, you know, doing things in line with its activities and in line with its purposes. Secondly, who are the organisations members? So knowing its members is really important because you are ultimately accountable to these people. You need to understand their interest and their concerns. And this will also assist you to decide what types of communication is most appropriate for engaging with your members and keeping them informed. Also, who’s your staff who works in the organisation, you should be confident in your workforce, which means understanding its strength. As well as being aware of any skills that might be lacking, that might need to be addressed, whether you have staff and all volunteers will also be relevant to understanding what laws you have to comply with as the governing body and things like OHS or tax and employment law, to name a few.
Also, what is the makeup or composition of the board itself. So to be effective, a board needs the right group of people with the right skill set. So examples of those skill sets might be financial literacy, understanding of the not for profit, sector and experience in the sector, particularly industry or management experience, and of course, a passion for your organisation’s purposes. Those are just a few and it will be important to understand, as Nadia said, where those strengths and where those weaknesses are, so you can try and address that in your board. Also, where does funding come from a very important question, especially during this time of COVID-19. Is the recording this webinar, a central concern to a lot of organisations. It can vary dramatically. So depending on the size and the purpose of your group, it’s very common that grants, requests and sponsorships are made for specific purposes to your groups. And you should familiarise yourself with all the obligations and conditions that might attach to your funding. And make sure you’re monitoring your compliance with those funding agreements regularly. Also, what are your key contracts? So making sure you understand this is central to your activities, what are the risks and obligations that are attached to those contracts. So as a board you should be regularly updated at meetings around these documents. It also might substantially affect your funding and your activities.
Also issues facing the broader sector, it’s really important to understand this, you should be aware of these issues, as well as how they might impact your organisation. So if a particular sector is starting to find it difficult to obtain funding from traditional sources, perhaps you need to look at alternative sources. Nadia you’re probably better place to talk about these. What issues do you think that the disability advocacy and support services sector need to be thinking about right now? You know, I guess COVID-19, but also more broadly, your group.
Kaela, I think they’re aware of the risk that the organisation may face is absolutely vital, especially during times of change, and challenges, such as the current challenges we’re experiencing at the moment with COVID-19. It’s absolutely is important to think about changes to where you might get your funding. For example, if you get funding from State Government, and now, it’s more likely that you will receive state that you will receive funding from Federal Government. Be familiar with the process, any changes in the language that is used, and often they are really, if you are a smaller organisation, think about the resources that you have to help you get funding. What sources are more likely to give you a positive outcome? Don’t waste your time on applying for funding that you may not get or that will, that really may not be fruitful.
We all don’t know what funding will get. But if you’re spending a lot of time applying for tiny, tiny grants, and you’re looking at what the deliverables are, and it’s you know, there’s a lot of deliverables and there’s a tight timeline sometimes it’s a bit unrealistic, to unrealistic to apply for that funding. Be realistic about what funding you need, I guess. Don’t sell your administration, management or skill building short, when you are applying for funding. Also be prepared to walk away from funding opportunities if the money offered is unrealistic, and you cannot possibly deliver the project outcomes in the time expected or with the money which is offered. Sometimes government needs to move in to change how they think and how they offer funding. Also, what has been previously said, look at other funding options which may not be government related. Try and be flexible in how you work as an organisation. Think about how you can deliver your projects. If like now for instance you can’t have face to face meetings, for workshops etc. I think really try and be as flexible as possible as an organisation. This is really often hard to do.
Thank you. Just a few more key issues that boards need to be aware of, you’ve spoken about risks. But the last two points on the slide, understanding your group’s legal status, and also knowing the contents and following your rules. So I’ll talk about these two points in a lot more detail coming up.
When we speak about, or when sorry, when we get a particular legal question from an organisation at not for profit law, we will always consider these five points that are on the slide to determine you know how we answer that question. That’s really about understanding the group and it’s legal status. Firstly, is the organisation a not for profit? Now in a not for profit organisation, all profit must only be used for the purposes of the organisation and must not be distributed to members, committee members or other people involved for their personal use. So, a key I guess, takeaway from this, question is, it’s OK to make profit. And I think this term can sometimes be a little bit misleading. In fact, that is the aim to make profit so you can do what you set up to do in the first place. It’s what you do with that profit or that that leftover money after paying your bills and other outgoings that determine whether you are a genuine not for profit under the law or not. So that’s the first point that we always look at when a group approaches us and I would encourage you to tick this off and make sure you are a genuine not for profit under the law. Secondly, we look at whether an organisation is unincorporated, or incorporated.
And I’ll explain these concepts and unincorporated group is simply a group of people that have come together for a common lawful legal purpose. They may have some money, they may have a set of rules and perhaps a membership structure. But the group has gone no further than that. They haven’t registered with the government and created any separate legal entity. Now, being unincorporated is absolutely fine for many groups. Think about your local choir or theatre association. There are so many community service organisations that remain incorporated in the sector. On the other hand, a lot of groups choose to become incorporated. And if you are incorporated, essentially it means you’re registered with the government as a separate legal entity. And this is separate from its members, including the board. And there are some key benefits to incorporating including access to funding, it’s often easier to get that funding if you are incorporated, access to insurance is a big one. But importantly, and probably the biggest draw card for a lot of groups who are considering whether to incorporate is the protection that it gives to individuals including the board in the group.
So generally, those that govern the group will be held legally responsible for the debts and the liabilities of the group. And I’ll talk about this more a little later in the webinar, this concept of liability, it’s not exhaustive so it can come down and expose you at times but these circumstances are rare, but I will touch on this. An incorporated group though without thoseadvantages, it also must be able to meet certain requirements under legislation and report to a regulator or regulators on a regular basis. So to understand what these requirements might be for an incorporated group, you need to know what you’re incorporated with your legal structures as an incorporated group. Now, on this slide, I’ve listed the most common type of not for profit legal structure, which is the incorporated association and many of the groups listening today will have this structure. It’s a state based legal structure and it’s generally for groups wanting to operate locally. And for these groups in Victoria, the regulator is CAV – Consumer Affairs Victoria, and CAV administered a piece of law called the Associations Incorporation Reform Act a bit of a mouthful or the AIR Act. And you have to have a set of rules that govern the operation of your organisation. And those rules have the force of law, which means they’re binding on your group and they act as a contract between you and your members. So this is essentially the legal framework for an incorporated association. And it’s one that you need to be aware of if you are governing such a group.
On this slide, I have now listed another common type of not-for-profit legal structure for those groups that are operating across different jurisdictions. So this is the legal structure that Justice Connect has as a national organisation. And that is the company limited by guarantee structure, otherwise known as a CLG. Now for CLG your regulator is ASIC the Australian Securities and Investments Commission. ASIC administers a law known as the corporations act, which many of you would have heard of it’s the same law that governs for profit companies. And your organisation also needs to have a constitution it’s called a constitution as opposed to rules for an incorporated association, but it’s the same type of governing document that also is binding, it has the force of law for your organisation. Now the unique feature about a company limited by guarantee, guarantee, is that members of these groups specify an amount of money that they willing to contribute to the group in the event that it winds up or it comes to an end. And if the company’s assets are not sufficient to cover its liabilities or debt, then this guarantee will be used. And it’s usually included in the constitution of the CLG, but we won’t get into any more detail around that, but that’s, you know, that’s why there is this guarantee aspect.
There are other not for profit legal structures available in Australia. I won’t go into these in this webinar today. I think these are the most two most common that most of you will be listening to this webinar. We have lots of resources on the different legal structures available for groups, perhaps you’re starting up and you want to explore the pros and cons of these different structures. So please feel free to visit our website and have a look at those resources. And I’ll come to that at the end of the webinar. So separate to your legal structure, we’ve discussed you’re not for profit status, your unincorporated or incorporated status. The legal structure that you have, if you are incorporated. The last two dot points on this slide referred to whether or not you might have the status of a registered charity and whether you have access to tax concessions, exemptions, and endorsements. So those are the next two key points that you should be thinking about if you’re governing a community group. It is interesting that of Australia over 600,000, not for profits now, that’s probably not 100% accurate that figure, but approximately less than 10% are actually charities. Now these statistics change daily, and you can have a look at the ACNC website, which I’ll take you to in a moment for the updated stats. But the point is not all not for profits are charities, but all charities are not for profit. So organisations that meet a particular definition under the law are determined by the government to be registered charity. So this is a special additional status. And the government will look at the purpose clause in your organisations, rules, or constitution among other things to determine whether it’s eligible for this status. If your organisation is a registered charity, I’ve included the legal frameworks for those groups on this slide. Now the organisations that are charities will be registered with the Australian Charities and Not for profits Commission, the ACNC or the national regulator, and this regulator administers some laws or the charities act and the ACNC act to be included quoted on the slide.
So in good news for charities that are incorporated associations, so have that legal structure, there is no longer a need to lodge two annual statements. So one with your incorporated associations regulators CAV, and one with your charity regulator AC, the ACNC previously this was required. But now the information will be collected by the ACNC and then sent on to the state based regulator CAV in Victoria on your behalf. So you don’t have to double report, which is a really good step. For charities that are companies limited by guarantee, so that other legal structure, the majority of your reporting obligations will also be to the ACNC as many of the usual obligations under your, the corporations act have been switched off. So that’s good news too. It’s a matter of streamlining the reporting. We have again, a lot of information on charity reporting and those obligations on our website. If you want to have a look at whether you are in fact, a registered charity, or if you want to look up other registered charities, you can have a look at the ACNC website.
So it’s acnc.gov.au, and I’ve included a screenshot here, I hope it’s OK Nadia, of the Women withDisabilities Victoria information. I just used this as an example, so this is publicly available information. It’s about making sure, you know, charities who have that status are accountable you know, meeting their reporting obligations have updated governance documents on this website. And if you click through to people, it will list all of the board members who are currently governing that community group. So there is this transparency and accountability required for registered charities because of the trust and confidence that we have in that sector. But I’d encourage you to have a look at what information is available for your group, if you are a registered charity.
Also I mentioned tax concessions and endorsements earlier for those wanting to find out about the Commonwealth tax status. And now there are state based tax consessions and status that you might have, which I won’t go into. We’ll focus on Commonwealth. You can have a look at the Australian business register website and the ABN lookup. So it’s abr.business.gov.au. It’s important to understand if you do have particular tax concessions and endorsements, the basis on which you have these. So if the tax office provided you with these endorsements, based on your purposes in your rules, part of your job is to make sure that you keep that and you keep complying with your rules and acting in line with your purposes. So you can jump onto that website. I do have to say that sometimes it can be out of date. So I’d rely on a few different sources, you know, asking those questions of existing board members of the group around what tax concessions you have as well as looking at these websites to confirm the information.
So that brings us to the end of this first section on understanding your organisation. I know there’s quite a lot of information in there, but you can pause this webinar at any time, write down notes or come back to certain sections, but at the end of each section I’ll provide some simple practical tips that you can implement in your role as a board member. Firstly, understand what your role is as a board member and we’ve spoken about that quite a lot. It is considered to be a position of trust. And because of that certain legal standards will apply. And I’ll go into talk about it in a moment, but you should understand your role and your focus, and also, you know, think about how it might differ from other roles or other hats you’re wearing in the organisation. Tip number two, understand the legal status of your not for profit.
So all of those, those key points that we’ve run through that you’re not for profit status, your structure, whether you’re incorporated, if you have charity status tax concessions, understand that because it helps explain why your group must do things in a certain way, and it will help you govern more effectively. It’s really important to understand that legal framework in which you operate. Number three, think about wearing your governance hat. We’ve mentioned you may have different roles in the organisation, such as an employee, a volunteer perhaps, or a parent, but governance is a special and distinct role. So when you’re sitting on the board and you’re making decisions, you must wear your governance hat as distinct from others. So that wraps up the first section of the webinar. Now that we’ve discussed these, let’s have a look at your rules and your legal purpose. So this will be brief, but very important section.
So the rules or the constitution of a not-for-profit, are essentially a roadmap for running the organisation. We find that following the rules means that organisations are just generally better governed, but also the reverse can be said, as well. Remember, as I mentioned, it’s a legal requirement that an organisation and its members follow the rules. So they have the force of law they’re binding and we get hundreds of calls at Not for Profit Law from organisations with the questions about how to run their group and a lot of the time our lawyers will say, firstly, well, the answer will depend on what your rules say about that. And have you had a look at your rules? And a lot of the time the answer can be found. So your rules will contain information about membership the board or committee itself, the types of meetings the organisation must hold, your finances the records you must keep an access to those records, the process to follow when things change, or if things go wrong but perhaps the most important clause in your rules or constitution is the purpose clause. Now this is sometimes called the statement of purpose or the objects or the objective the same, this is the same thing, but I’ll be calling it your purpose.
So the purpose clause sets out what the organisation is legally set up to do. It forms part of your rules and it’s legally enforceable. So if any of the decisions you make are outside of these purposes, then that actually could be a basis for some kind of legal claim against you. Now, this is rare, but it is important to mention because sometimes we do see this is where legal claims do come up, because it’s a clear breach of contract by not following your rules, but more importantly, as we moreso mentioned things like your charity status and your tax concessions that you’re given are based on your purpose. So you really need to stick to it to keep these special status and concessions. Nadia, are you able to share what your organisation’s purpose is as set out in your rules? Just generally speaking, just to get an idea of purposes or community groups?
Certainly. So we are a charitable institution run by women with disabilities to advance and promote the objects for the benefit of all Victorian women with disabilities.
So some of those objects are to promote the health and wealth wellbeing of women with disabilities. And we do that by supporting, educating, providing information and mentoring to members and other women with disabilities, as well as to health and other community organisations, services, carers regarding issues that impact the health and wellbeing of women with disabilities. We promote the access of women with disabilities to health and other community organisations and services supporting, conducting, and promoting of `research on issues that affect women with disabilities and promoting community awareness of women with disabilities and engaging in community activities that promote positive images of women with, of women with disability and highlighting the diversity of women with disabilities. And also conducting health promotion activities relating to all of those things.
Great. Thank you. So obviously every organisation will have different purposes, but that just gives you a flavour of Nadia’s group and every decision that, Women with Disabilities Victoria would make, would be in line with those purposes.
So just a few top tips around purposes and rules. These are quite practical. So tip number one, make sure you have a copy of your rules. It sounds quite straightforward, but you’d be surprised how many times people are asked to join a community group and haven’t seen the most up to date version of the rules. It should be easily accessible and available for everyone. And if it’s not, that should be a question that is raised by you when you join. Read your purpose clause regularly so tip number two use this as a guide for all of your decision making. If you have your rules handy, I would actually encourage you at this time to pause the webinar, have a look at your purpose or objects clause, and be able to summarise it in a few sentences.
This will actually become quite relevant for the next section of the webinar as well. Tip number three, change your rules and purpose with care. So it can be necessary to change your rules, particularly if they’re quite old or your organisation is evolving. But remember if you’re changing your purposes in any way, this could have other legal consequences that can affect your legal status and the perhaps charity or tax concessions that you have. So we would always recommend that you get some advice when you’re looking at changing your governing documents. We also have some fact sheets available for you if you’re thinking about that. Nadia, do you have any comments, I guess about generally about rules and purposes
Just be familiar as you can with the rules and purposes as they do guide and keep you on track regarding what the organisation should be doing and how you as a board member and the organisation should be working. Reiterating the obvious but I think it’s really important.
Yeah, absolutely. I think sometimes people think it’s just a good document to have, or it sits in a folder and isn’t looked at, but it actually is a very helpful document. So like you said can keep you on track. It can keep those conversations on point,
Right? Even if it is a little bit jargony and too hard to understand it’s important that you understand them.
So with that understanding of the organisation, its legal framework you’ll now go away and read your rules and your purposes. This might be a good time to pause the webinar, take a five minute break if you need to speak with others if you’re listening to this as a board or committee, and then we’ll come back and talk about the key legal duties that you owe as a board member, as a committee member.
So let’s start with this media grab on the slide to set the scene. And I’ll tell you a bit about this case, a bit of a warning. So this case was heard in the County court of Victoria, and the court found that an order of Australia recipients Mr. Trajkov used hundreds of thousands of dollars from a Melbourne not for profit childcare centre that he helped to found. Now he used this money to pay for his private expenses. Trajkov was a founding member of the organisation, which provided support to elderly migrants from former Yugoslavia. And as I said, the association also operated a childcare centre. Now the County court heard that between 2013 and 16, parents made cash payments of nearly $1.5 million for childcare services. So that’s a bit of a red flag. But also that he was spending, or this has been deposited into his sorry, only $56,000 was being deposited into the account of the childcare centre. So he was spending money on purchases of alcohol for his daughter’s restaurant, fashion, jewellery expenses, etc.
So he was ordered to pay nearly $2 million in damages. Now the court in this case said that the conduct amounted to a significant breach of the fiduciary and statutory duties opposed on him. And it showed at best, a complete lack of understanding of the significant duties imposed on him as an office holder and a preferring of his own interest to those of the association and really a wilful blindness that the damage caused to the association at the very least in terms of dishonour fees and loss of reputation. So this was a clear breach of legal duties that apply to board members. There was obviously criminal conduct involved. We’re gonna speak about some other situations that might not be as clear cut, but if there is a clear breach of legal duties then you know, it could be a situation where an organisation finds themselves on the front page of the newspaper and worst case scenario, a claim being made against them in the courts. So, what are these duties that this court referred to and that I keep speaking about? The duties are worded slightly different depending on where they come from or where the source is. For example, if you are an incorporated association, then they can be found in the law that governs you and they’ll be written down in that act. And if you’re a CLG they are referred to in the corporations act, and if you’re a charity they referred to in governance standards that apply to you. So they might be worded slightly differently, but we like to summarise them as high level, four high level duties, which are set out on the slide.
Firstly, the duty to act in good faith and for a proper purpose. The duty to act with reasonable care, skill and diligence. The duty to not misuse your position or information you have because or through your position on the board and your duty to manage conflicts of interest. Now these duties are overlapping because in any one scenario, a number of duties might come into play. And often if there’s a breach of one duty, there’s going to be a breach of another. But I just want to reassure you that these legal duties, as I said, at the very beginning, are just principles or standards of good governance and they are common sense. They’ll just help you govern more effectively while also complying with the standards that the law set. It’s quite natural for people to feel a little overwhelmed when we talk about legal duties, but they’re not that onerous really in my opinion, and I’d be curious to hear what Nadia thinks as we go through them and they really require honesty and common sense. So with that in mind, let’s move on to the first legal duty and we’ll look at how this duty might play out. And that’s the duty to act in good faith and for a proper purpose.
Now this duty has two limbs. It’s the duty to act in good faith in the best interest of the organisation and for a proper purpose within the powers given to you as a board. So there are a few things to unpack in this duty. Firstly, what does in good faith mean it’s really a old fashioned term that just means acting honestly, fairly and loyaly to the organisation with loyalty to the organisation. Obviously an example of not acting in good faith would be fraud or criminal conduct, which we saw in the case earlier, but there might be other more, I guess, subtle forms of not acting in good faith as well, not being honest or acting fairly.
So acting in the best interests of the organisation. Now this requires you to make decisions based on what is best for the group rather than your own personal interest or the interests of another. And it must be the best interest of the whole organisation. So you have to look at what’s best for the organisation as a whole and not just a particular subsection of the group or membership class. And this is sometimes quite hard to do. The second limb refers to acting for proper purpose and within the powers given to the board. So we’ve already spoken at length about purpose and you know where to find your purpose, but we haven’t touched on powers, again, the powers or limitations on your powers can be found by looking at your rules. So you have to be aware of any limitations for your board around your decision making. And it might be perhaps what money you can spend or entering key contracts there might be additional steps or authorizations that are required. So you have to understand, you know, how much power you do and should have.
To illustrate this duty to act in good faith and for a proper purpose, we’ve got a scenario that I’ll read out and then I’d like you to think about whether you think Jacob in this scenario is acting in good faith and for a proper purpose. And we’ll have a bit of a chat about it. So Jacob is a long-time board member of All Able Inc. A not-for-profit community group supporting people living with a disability in the Bendigo region. Now given his work and reputation, Jacob is asked to join the board of the Victorian Peak for disability support organisations. Now this state Peak has the purpose of providing support and training to the disability support sector across Victoria, and Jacob accepts the position. The Peak body has commissioned a report which has identified there is a significant lack of training and support for organisations in South West Victoria. The board of the state Peak is, therefore, considering a proposal to spend a significant amount of its training budget in the South West region. So Jacob recognises the need in the South West but he also knows that his other organisation, All Able Inc would want him to push for the resources to be invested in Bendigo. So thinking about the duty, what do you think Jacob needs to do? Now feel free to pause the webinar at this point and discuss or take a few notes down if you are listening with other people.
So Nadia, what do you think about this? Actually, I might provide my opinion and I’ll get you to come in if you have anything extra to add. Really the main issue here is that Jacob is sitting on the board of the state Peak at this point in time and making decisions on behalf of that organisation. So he needs to make a decision that’s in the best interest of the state Peak as a whole. So its membership as a whole and not thinking about the preferences of another organisation that he is involved in. So, of course, he should use his knowledge and provide his opinion if he has one. That’s why he was asked to join the Peak in the first place. He has knowledge of his sector in his region but when making the decision he needs to think about the purpose of the Peak and what’s in the Peak’s best interest and assisting all organisations in Victoria rather than you know, looking at the interests of All Able Inc. Nadia, do you have anything to add to that?
I absolutely agree with you Kaela. I think it’s really difficult to separate yourself in many situations between all the different things that you may be involved in. Keep in mind the purpose of the organisation that you are on at the time. You know, what’s its role, etc. I guess this absolutely feels free to think about how something could benefit another organisation that you are involved in but be mindful that it is a separate organisation and they all have different priorities. Maybe one of the things you could do is take the learning from the area where this money will be injected into and bring those ideas back to his other organisation.
Yeah. Wonderful, thank you. So I hope that helps to explore this first duty to act in good faith and for a proper purpose and there are lots of different scenarios where this duty could come up. This is just one that comes up quite a bit through our service. Let’s talk about the second duty. The duty to act with reasonable care, skill, and diligence.
Now again this duty has a few parts to it and it really requires you to pay attention to, and make considered decisions about the important affairs and activities of the group. And this includes its financial position which I’ll go into in a bit more detail. So just to flag, it’s not just the treasurer’s role it’s part of everyone’s duty under the second duty of care, skill and diligence. So using care really just means making sure your decisions are sound and informed. That you are considering evidence in front of you, that you are taking your role seriously and you are giving it enough time, thought and energy to make sure that you are properly making decisions and undertaking tasks. In terms of using skill, unless your role says so you don’t need to have a particular skill to be on a board but we have mentioned a few skill sets that are desirable and we would recommend.
But I would encourage you to do a skills audit and identify where there might be gaps. But where you do have particular skills, you should be using them for the benefit of the organisation. Now this doesn’t mean you have to do everything. For example, I myself sit on the board of a community group and I’m a lawyer but I don’t need to do all of the legal work. But I am expected to use my legal knowledge and skills to identify legal issues and perhaps I raise where we might need further assistance or expert opinion. Diligence, so acting with diligence. Really this just means thoroughness and not being too casual or flippant about making decisions. It’s not going along with the flow. It’s actually making a decision that’s informed, asking for more information if you need it, seeking out others who might have skills or expertise that you don’t have. So that’s really diligence. It’s all tied up together with care and skills. It might be you don’t understand your finances and you ask your treasurer to explain more and if they can’t, maybe you need the assistance of an auditor or a financial expert to help come in and explain things for the board.
Or a real case involving a South Australian college was an example of using diligence involved a case where the college asked for an arborist to come in and assess a tree because they recognised they did not have that expertise. So part of their role was to identify risk, something we mentioned at the start. So an arborist came in and provided a report. So that’s where diligence comes in. I want to point out here that this duty doesn’t mean that you always have to make the right decision. Obviously, you can’t see into the future and many decisions may turn on things that you couldn’t have foreseen and it may not have turned out to be the best decision. Instead, this duty requires us to take care with the decisions we are making, make sure we are properly informed and making the best decision you can at the time with the information that you have. So that’s just to put your minds at ease. It’s about the decision-making process. Let’s explore another scenario to unpack the duty to act with care, skill and diligence. And this is Sylvia and I must say these are all fictional. The identified scenarios that we’ve made up but they are based on real enquiries.
So Sylvia is on the board of ‘Space To Grow’ A charity supporting people with mental illness. And Sylvia missed the last board meeting where the board agreed to explore buying the vacant land next to their current premises to support an expansion of their services. And she missed the meeting 58.51because she had a physio appointment. Now Sylvia attends the next board meeting although she hasn’t yet had a chance to read the papers or the minutes from the last one. And at the meeting, the executive officer Mary recommends that Space To Grow offer $900,000 for the land. Now Sylvia is astounded. It’s double the amount she thought the land was worth and she wonders if they can even afford it. At one point Sylvia thinks, maybe I’ll just abstain from voting. I didn’t attend the last meeting and so if I don’t attend this one, sorry if I don’t vote at this one, I won’t be responsible for the decision they made if it all goes wrong. Now, in the end, Sylvia decides to vote in favour of the resolution for the organisation to offer $900,000 for the land. She reasons that it’s probably OK just to rely on Mary’s advice and some of the other board members seem enthusiastic about the proposal and Sylvia doesn’t want to disappoint them. So Nadia, I’m keen to hear your thoughts here. What do you think of Sylvia’s reasoning?
Not really good reasoning overall. I’d be really concerned about her reasoning for voting as she did. You still have responsibility as a board member to make the best possible decision for the organisation and not just go along with what everyone else says. It’s really not a good choice. I would think if she hadn’t read the material beforehand abstaining might be a good option but also it’s breaking her concerns in the view of her not having prepared for the meeting. She should be aware of her obligations you know, on the board and part of those to actually read the required board material and prepare for the meeting. The board is making quite a serious decision and her role in the decision-making process should really not be taken lightly at all.
Yeah absolutely. I completely agree. You know, sometimes life gets in the way though. So I can sympathise with Sylvia that she couldn’t make a board meeting where this is discussed but as Nadia said, it doesn’t mean she should go into the next meeting unprepared. And this might mean asking questions outside of the board meeting process, following up with the chair. Perhaps that’s the person who can answer those questions around what the thinking was around this offer. Asking questions about whether valuations had been obtained. You know, can we actually afford this offer? And asking those questions will often get other people on the board thinking too. There’s also onus in the board as a whole to make sure that people who do miss meetings, and it does happen, get all the information they need in the right time frame especially for a big decision like this. And maybe what Sylvia should have done if she still wasn’t getting the information that she needed was to propose that it gets postponed this vote. That might have been a better, you know, response than just voting to appease everyone else and to go with the flow.
So there are lots of things that Sylvia could have done. Obviously, if people are missing every second board meeting, I think that’s another question or another story, I would question whether they could even comply with any of their duties. But you know, missing a board meeting every now and again, so long as you are doing all of these other things, would be OK. So actions such as reading minutes and papers as Nadia said, completing tasks that you’ve agreed to do at meetings is part of this duty, following up on actions between meetings. So I mentioned, if you don’t understand something, well, you need to check if something’s being done, make sure you’re having that correspondence outside of your regular meetings. Contributing to discussion. Sometimes it’s difficult, especially for more recent board members who might think they need to take a back seat. But often if you ask a question and contribute, as I said, you’ll get other people thinking and you’ll make better decisions. And also monitoring your decisions against your rules, your purposes, and your strategic plan. So, those are just a few things that will help to show that you have complied with this duty. And if Sylvia, you know, had done all these things and they’d still made a decision to offer the money, and it didn’t turn out to be the best decision, then she could still be satisfied that she’s complied with her duty.
Just to emphasise that that part of this duty that would to relate to finances. And I thought it was worth a separate slide, because it is considered quite a serious breach if you don’t comply with this duty when it relates to finances. So this (AUDIO CUTS) At all times and prevent your organisation from continuing to incur debts, well, when you notice it, or should know, that it can’t make those debts when they’re due. So in the kindergarten case, so just to emphasise this part of the duty that relates to finances, it’s really important. You need to understand your organisation’s current financial position at all times. And you need to prevent your organisation from continuing to incur debts, if you know, or suspect, or should know that your organisation can’t meet those debts when they are due. And this is often more commonly known as the duty to avoid insolvent trading. Now, I’ll take you back to the case that we spoke about, about the childcare centre. Now, a lot of the childcare centre staff weren’t being paid. So that was a debt that the organisation wasn’t meeting as it fell due. And the rest of the board should have identified that there might’ve been a financial issue here, and there may have been an argument that this was allowing the organisation to continue to trade, or continue to incur debt when it shouldn’t have. so it was trading while insolvent. That claim wasn’t made, but I’m just saying that that might be an example. So, with Sylvia, and all the other board members, as I mentioned, they need to make sure that a purchase of $900,000, isn’t putting the group’s finances at risk. And they aren’t putting themselves at risk of breaching the duty to avoid insolvent trading. So that’s a really important part of this second duty.
So, if your organisation is in financial trouble, or you suspect there are financial issues, put the brakes on spending and get help. Accountants or insolvency experts and lawyers can help you assess the situation, and help you perhaps trade out of that insolvency. We have resources on our website about insolvency, it’s quite a technical area, but it will give you some red flags to look out for in your organisation. So, but let’s move on to duty number three. So we’ve discussed the duty of care, skill and diligence, the duty to act in good faith and for a proper purpose. And now let’s talk about the duty not to misuse your position or information you’ve obtained through your position or because of your position.
So, this means you can’t use your position or any information obtained through your position, that might be information you’ve got through board meetings, or perhaps someone divulged it to you because of your membership on the board, and you can’t use that information to gain an advantage for yourself, or gain an advantage for another person or organisation, or cause a detriment to your organisation. Now, this is quite a broad duty, so we are going to unpack it using some examples. But really, it’s just making sure you’re not misusing your position or information in the way that it wasn’t intended to be used. Nadia, I’m going to, I guess, talk through some examples, and I’d be really interested to know what your gut reaction is to these examples, and whether you think it is a misuse of information, or a board member’s position. So, sorry to put you on the spot here, but we can also, and we can also talk about it together. So, you are on the board, although not for profit organisation. You provide information about your committee’s proposed bid for an upcoming government tender, to the CEO of another organisation you’re involved in. Nadia, what do you think? Is this OK or not OK?
This is 100% not OK.
Yes. It’s obviously, misuse information, I’m not sure whether it would, it provide an advantage to the organisation that she’s provided the information to, but there were so many things wrong with this, but, you know, yeah. I’m not sure what would drive, what would have been in her mind when she reached the decision that she could release this information to another org.
Yeah. So, yeah. Look, this is a clear breach of this duty, as Nadia said, it also just doesn’t feel right for so many reasons, but it’s good to know that there’s actually a legal duty that sits behind this act as well. So yeah, it’s not OK, it’s a misuse of information. And as you said, it could be that it advantages the other group, and it could also cause a detriment to your group. And even if you’re not sure if there’s a possibility, then it would be a misuse.
So you have to be particularly careful when you’re involved in multiple community organisations, and if you’re in doubt about whether you can talk about things outside the committee room or board meeting room, then ask the board to clarify or have that conversation. I think maybe what might have been, you know, in the mind of this person, is that the sector is often very collaborative, and people are friendly and passionate, and want to be sharing and want to be, you know, or we all have common goals. And, but it’s important not to mistake this for, you know, meaning that information gonna be provided for open slather, and it can be shared with all. So it’s this balance between collaboration and complying with our legal duties. So it’s essential not to reveal outside of the organisation or even perhaps within other parts of the organisation, information that’s discussed at a board level in confidence. You could come to an agreement about what you can and can’t discuss, for example, some boards might say the decision can be conveyed perhaps internally or externally, depending on what the decision is, but discussions need to remain confidential. But that is something that you need to discuss and come to an agreement as a board. Let’s talk about another example. Are you ready for this one Nadia? (LAUGHS)
You are approached by a relative, who asks you to pull some strings to get your cousin moved up the waiting list for one of your at home care services. OK, not OK?
Let’s take the obvious this is definitely also not OK. You are using again your position to benefit someone that you know, yes, it’s definitely not a good thing to do. My response to the person would be, my position on the board does not permit me to do that, I’m required to act in my role as a director in a way that does not misuse my position. And that would be my response.
Yeah. This is actually quite a common scenario and can be quite awkward. You know, people just tapping you on the shoulder, or asking you to do them a favour or put something on the top of the list. And as Nadia said, it’s great to have something rehearsed, ready to go. So it doesn’t seem like a personal issue, it’s more, look, my role as a board member doesn’t allow me to do that. And I have a particular legal duty around not using my position in that way. And I think a lot of people would respect that. So this is where the law can be used as a tool, and these legal duties can help you have these difficult conversations. And the last example, you make comments to the media about the government’s recent cuts to funding, indicating you speak for the board of the organisation. What do you think Nadia?
This is also not OK. If you have been tasked with speaking to the media as a member of the board, then it’s fine. But if you haven’t, and you indicate that, and your point comes across or your points come across reflecting the view of the organisation as a whole, then I would be, as a CEO, I would be really concerned about what led you to make that decision.
Yep, absolutely. So this just represents another way that this duty could be breached. It could be both a breach through misuse of position, and also information, if you’re disclosing certain information that is confidential or sensitive to the group. We always suggest that this is, you know, this would be a good area to have a policy. So a communications or confidentiality policy, where it’s very clear to those involved in the group, who has the authority or permission to speak on behalf of the organisation. So that’s a practical takeaway, and a good thing to document for your board.
And we’re onto the fourth duty, which is the duty to manage conflicts of interest. So, this is often a very, I guess, people think it’s quite a juicy duty, and always raise conflicts of interests, but I think it’s actually quite straightforward when it comes to what the law requires. I have to say a conflict of interest is not the same as a disagreement between committee members. So that’s the first thing. A conflict of interest under the law and under this duty, arises when a committee member is presented with an opportunity to, or potential opportunity to use their position for their own personal benefit, or the benefit of someone else, or another organisation. So, the main takeaway here, is that conflicts of interest are actually very common and absolutely OK. I would be very surprised if conflicts don’t arise frequently in your board meetings.
There are times where your duty to the organisation will come into conflict with your personal interests or other duties you haveand this is especially so in small communities or specialised sectors where everyone knows each other and people might have numerous different hats on. We’ve spoken about these different hats. So the duty to manage conflicts of interest is really just that it’s the duty to manage the conflict, not to avoid the conflict in the first place, because they will happen. It’s the process that you as a board must follow when these situations come up. So there could be a wide range of conflicts of interest situations that might come up. And it’s important to know that the duty to manage them relates to actual conflicts that are very clear, but also potential conflicts of interest. So those that might, you might not be sure about, you know, should be managed in the same way. To unpack this duty to manage conflicts of interest, we’ve got this scenario involving Amir. So Amir is a board member of Change Lives, an incorporated association in Victoria. And Amir’s day job is as an IT consultant and website designer. So Change Lives has decided it wants to build a new website. So more people know about its services and to attract new staff and volunteers. Amir is pleased to hear this as he needs new work. And he tells the board, he would like to submit a proposal to build the website for the organisation. So the first question is can Amir do paid work for Change Lives, even though he is a board member? So Nadia do you think there is a conflict here?
NADIA MATTIAZZO: (1.17.49-1.18.02)
Yes. There is a clearly a conflict to ensure. He’s a member of the board, he works for an IT company. Yeah.
Absolutely. So there’s clearly a conflict and that’s OK. It’s what the board does next to manage that conflict. Now, firstly, it’s important to check the rules. I’m coming back to the rules again. Some groups have a rule that says no board members can do paid work for the group. Now this is just a decision that is made by organisations. I’m not saying it’s right or wrong. Some groups just choose to manage this particular conflict of interest scenario within the rules, but other groups absolutely allow it. So the first point would be to look at the rules. Now, if Change Lives rule, say, don’t say anything then, Amir could do paid work for the board. So the next question is, well, how does the board manage the process? So Nadia, I’ll go on to talk about the process next. I’m just interested to know whether you have any examples of other common conflicts of interest that might arise for board members.
Yes, it could be, the member of a board also working for an organisation which might fund the organisation that you’re a member of the board of. We for example, have an item at every one of our board and committee meetings on our agenda, which is which covers disclosure of conflict of interest, because we do have, we can have members on our board that work in the sector where we might get funding from simply because again, like you said, we are a specialised sector, we are women with disability, and that’s who we support and provide you know, information and support to.
Great. That’s a great example. And thank you for mentioning disclosure of the conflict of interest, because that’s exactly what this duty requires. So lets look at this process for how to manage conflicts of interest when they do and when they will inevitably come up in your groups. So the legislation or the laws that apply to your group, remember you might have different laws depending on your legal structure, differ on exactly how to manage a conflict. And it might be expressed in different ways in these laws, but we recommend following the steps on the slide as best practice and that’s a three step approach and you can be comfortable that you’re complying with these requirements. Firstly disclose the conflict of interest to the board immediately when you become aware of that conflict. So how do we disclose? There are a few ways to do that. Nadia mentioned an agenda item, which is a fantastic reminder at each meeting to let the board know of any conflicts that might come up as you’re discussing.
Also, you could do it through a standing register of interest, and this is what you usually would complete when you join a board, you list your interests. But obviously that is only good at the point in time that you fill it out. So that’s why there are other disclosure methods that you need have through your agenda, but also just allowing time in your meetings to check in and make sure there aren’t any conflicts that have arisen. You might not realise until midway through a discussion that you might have a potential conflict of interest. Oh, that’s my cousin involved in that group or we’re looking at a caterer and I know my best friend is in the mix. So you should be disclosing if in doubt, disclose, and make sure your disclosure is absolutely full disclosure. So be open and honest about the nature and the extent of the interest. For charities, so remember registered charities, you have governance standards that look at all of these duties that I’m talking about. And under the governance standards, it actually says you have to disclose perceived conflicts of interest.
Just to add an extra layer here, so even if it’s not an actual conflict of interest, you’ve decided it’s not really a conflict, but it could be perceived as a conflict or viewed as a conflict by other people, then you should still be following the process that we’re talking about now. So it’s really about thinking about what it would look like from an outside, looking in with the information that they have. There are situations where you don’t need to always disclose. For example, if you’re in a group of people whose benefit the organisation is established in the first place, so you are on the board of a disability advocacy organisation and you are a person with a disability yourself. So that’s an example you don’t necessarily need to disclose that because you know, that’s a clear conflict. Or you have an interest in common with all or a substantial portion of the members of your organisation. And it’s not particular to you. So those are just some examples of where I wanted to clarify, cause it might be relevant to a lot of listeners for this webinar.
So the next step after disclosure is to manage the conflict. That really just means don’t take part in the decision making. So you should not be present in the meeting while the matter is being discussed. You should not be present for a vote on that matter. And you should also refrain or prevent yourself from discussing the decision or trying to influence the outcome of the decision you know, outside of board meetings or in other conversations. And the final step is to record the details of what you’ve done about the conflict of interest. So your minute should record that a conflict was disclosed. Perhaps the time the board member left the room, you know, what discussions happened, the resolution perhaps, and they re-entered the room. So it shows that they weren’t involved in the conversation and the resolution. So Kayla disclosed conflict left the room at 3.30, discussion, decision, Kayla returned at 3.45. You know, that that kind of thing would be sufficient. So yeah, coming to the end of these key legal duties, these four key legal duties, our top tips, really understand these legal duties, feel free to use this webinar or our resources and include them in your board induction process. Sometimes those who’ve been around for a while, you know, would also benefit from a refresher. So that everyone is on the same page.
Foster a culture of openness and no silly questions. I think this really will help you to comply with all the face duties. Make sure everyone is informed and you’re making good decisions for your group. This comes from the top. If you’ve been on your board for a while, please think about the culture in your meetings and how you’re encouraging everyone else to contribute. And tip number three, consider relevant policies. Now I’ve mentioned the communications policy in relation to misuse of information and position. So that’s one policy you might want. Also conflicts of interest policy as a common policy for community groups. This will help guide the process and foster a culture of transparency as well. And it will help you remind you of your legal duties and the process that you have to go through. And we have lots of more information about that on our website. So we’re going to finish with a very short section just to sum everything up. Because we often get a lot of questions at this point around what happens if we’re found not to have met these legal duties or the standards that are required. So what if we breached a duty? Will we be personally liable or legally responsible? So let’s quickly look at the possible consequences in this situation, but also the protections that are available for you.
So I do want to put your minds at ease here. Please note legal action against not for profit board members for breach of these duties is extremely rare, but it can happen and I think a better way of thinking is that if you comply, it would just lead to a better governed organisation in any event. So, please don’t, I don’t want this webinar or any of these discussions around the law to scare you off doing your important work. So, I mentioned right at the start that one of the benefits of being incorporated as a community group is that you get a separate legal entity when you are registered with the government, and this provides protection to board members against personal legal responsibility. Now this concept is known, pardon me, as limited liability. But even though you have limited liability, there is, this protection is still not complete and there are exceptions. And on the slide is just representing where the protection of incorporation could come down and expose the individuals on the board to personal responsibility. Remember the Trajkov case involving the childcare centre, criminal conduct is a situation where that protection comes down. And I think that is absolutely fair enough. If you engage in a serious breach of one of the key legal duties I’ve spoken about, perhaps you’ve acted in bad faith or you’ve been reckless and wilful in your actions or use trade of while insolvent, that may be a situation where the protection again comes down.
I do, I should note here there have been some recent amendments to laws in the context of COVID-19 where there are some provisions that will protect board members in this situation. So at this point in time, you know, I would encourage you to have a look at those amendments for your group. But generally speaking when things here return to normal, however many months down the track, it’s definitely something that you could be exposed to as an individual. Thirdly specific laws can also mean that you’re not protected. So if you breach a specific law, for example, you don’t pay tax, you breach your taxation law obligations or employment law obligations, where you fail to pay the minimum entitlement, that’s another situation where that protection could come down and there could be a claim made against you personally. So those situations would be pretty rare, but you can understand why, you know, we can’t be protected entirely. So I think that’s common sense.
So what would happen if you are found to have breached one of these duties? Sorry, you found to have been personally responsible. You might be ordered to pay a fine. So it could be that under the legislation or the regulator might impose a fine for your actions. You may be ordered to pay compensation. So it’s the amount of money to the organisation, or perhaps even to someone else that’s been harmed because of your actions. You could be banned from being involved as a board member for a period of time. Or if it’s criminal activity, of course there may be criminal penalties. I would encourage, you know, to be aware of all those things but really to put that to one side and think about the loss of reputation and trust in your community organisation if you are found to have breached your duties. This is probably where the real detriment can be caused to community groups. Maybe it could be harder for you to get donations and funding because of lack of good governance or breach of these duties. And this loss of reputation can also mean that people don’t want to support your organisation generally, your membership declines, you don’t have volunteers knocking at your door.
So I think that’s the real risk. When we’re not complying with good governance and these duties that these things might happen. And that the other points on the slide would be, you know, less common, but also important to be aware of. So what are the protections? How can we prevent this from happening? Pretty simple, just comply with everything I’ve just said. So ensure that your organisation knows the legal duties, has good governance processes in place. It’s the safest, it’s the cheapest, and it’s one of the most effective protection against any legal consequences. So think about all the tips throughout this presentation. And you’ll be in a really good position to comply. If you do need to defend an accusation that you’ve breached your duties, be ready to defend that. So think about what evidence you could show. Perhaps thinking about, you know, what, you know, board papers that you read or the minutes that you can provide. Perhaps you’ve got expert opinions that you can show to show you did, made thorough investigations and acted with care, skill, and diligence. So think about how you would defend and what evidence you would need. Just a quick note on defences. A defence is not, I’m just a volunteer or I didn’t understand what was going on, or I didn’t want to be on a board in the first place, or I just joined because someone asked me to. These are not sufficient defences, you know, if you don’t comply with your duties. You know, these are standards that every board member must met. But luckily there are some extra protections if you are found to have breached a duty, even if you’ve tried to defend it, you may have been indemnified by your organisation. This means that your group will be able to pay for any fine or compensation that’s ordered against you. Now in Victoria for incorporated associations groups have to provide this indemnity or indemnification.
So they would pay the penalty or the legal fees associated. But only where your behaviour is not dishonest. So it would have to be an inadvertent breach. You know, you tried to meet the standard but unfortunately for reasons, you know, for some reason you didn’t hit the mark that was set by the law. So this indemnity is available as a protection that’s only limited to the assets or the money that the group has. So there’s one extra layer of protection and that is insurance. Your directors and officers liability insurance, or D&O insurance. And it’s a special type of insurance that protects board members from, you know inadvertent breaches or where you didn’t mean to breach your duty, but it won’t cover reckless or dishonest conduct. And that’s another obvious thing, but important to bear in mind. So really the top tips when it comes to protections, just understand your duties and comply with your duties, check whether you do have an indemnity and you can check your rules for this or ask other people in your organisation. And also whether your board has sufficient directed and officers liability insurance. So understand what is covered and what’s not under that insurance policy. Tip number three, lastly, but importantly, legal issues are rare. We go looking for cases and Not for Profit Law just to provide examples but we really do so just for preventative purposes so we want to show how you can prevent yourselves from being in that situation. Nadia, do you have any final reflections in relation to any of the duties and compliance that we’ve been speaking about?
I guess just to state the obvious, if you’re asked to be on a board, ask questions, be prepared to understand what your roles and obligations are in that position, if you at any stage, do not understand any duties and what they mean to you as a board member, you’ve got to ask, you’ve got to talk, you’ve got to seek clarification. And if you think that you need professional development in relation to governance, so you feel more confident in the role, ask the organisation to provide that, to support you to get that.
Wonderful, great tip. So that brings us to the end of the webinar, but I would like to just touch on a few resources that are available for you after this webinar and ways you can stay in touch with us as well. So we’ve listed on the slide some key resources in relation to the role of the board. These are on the not-for-profit law website nfplaw.org.au, and they’re earning, under the running the organisation tile. And it includes things, such a duties guide, which talks through all of these legal duties I’ve spoken about, a fact sheet on the role of the board and if you’re new to the board, more information about particular positions in community organisations, so we didn’t go into that today because there’s already quite a lot. But you know, the particular roles on the board and what those duties involve, the treasurer, president, secretary, etc.
And then some other toolkits and guides around running the group for incorporated associations and companies limited by guarantee. But lots more resources on the website about other areas of law, employment, volunteers, safety, please feel free to use this. They’re all free and available for your groups. And we have done our best, you know, we have tried to provide them in a way that is easy to read and in plain language as possible so we’d love you to utilise those resources. There are some other resources available as well that might be relevant to your groups. I’ve listed two websites on the slide, ‘the voice at the table’, which supports people with disabilities to be effective advocates. And there are resources about running inclusive meetings and also ‘voices together’ and they have links again to resources and fact sheets. There’s some resources on how to run a group and how to run meetings and manage conflicts so those might be some further resources that would be useful for you. Nadia, do you have anything to say about resources in general?
Generally that there are some really good resources out there, but there is definitely a need to develop further accessible resources that people with disabilities can access so, you know, if you’re out there, if you’re into resource development, let’s go do it.
Absolutely. It might be something we explore in the coming months. But thank you for that observation.
So we also send out, I have to say we also do other training, so you can find out more about our training program on our website. This includes webinars on just great legal topics. We’re not running much face to face training at the moment but a lot of groups are opting for webinars, but we hope to be out there again in the community soon to do face to face sessions so please feel free to have a look at what training we could provide to your groups, but also I’m sure VCOSS and DARU would be open to hearing what, you know, further training needs might be as well.
We also have a monthly update with lots of legal news and information. So, you know, you’re welcome to subscribe, at nfplaw.org.au/subscribe. If you have a complicated matter, remember we’re also here to help. You’re welcome to get in touch via our online inquiry form, and we’ll do our best to assist you.
I think that brings us to the end of the webinar. I would like to thank you for listening to making it to the end. There is a lot to good governance and, you know, we’ve really just scratched the surface in terms of the legal side of things. As well as thanking you for listening, I’d like to thank you for the amazing work that you do for the community. And I’m really special thank you to Nadia for joining me today and sharing your experiences, your knowledge and your practical tips around good governance. And of course to the course and the disability advocacy resource unit for having us deliver this webinar. So enjoy the rest of your day, wherever you are.