This article, written by RNZFB Board Chair Rick Hoskin, was originally published by the New Zealand Herald, 21 August 2019. It is available on their website as Premium content here.
The last time the Blind Foundation ran at a loss was around the time of the Global Financial Crisis.
In response, we had to reframe how we provided services. We knew how essential our services were for many, but we had to remodel some in order to make ends meet.
With the donating public turning their generosity towards the Canterbury earthquakes, the impact of the GFC was doubled. Had we not had our own reserves and income to fall back on, we would have been in dire financial straits.
The GFC taught us the importance of being prepared for the future. As a result, we resolved to place greater emphasis on broadening our revenue base and ensuring we spend every dollar wisely.
Make no mistake, donations are vital to the Blind Foundation. Around two-thirds of our income comes from the generosity of New Zealanders. However, with more and more people depending on our services and public funding under increasing pressure, we needed to look at other ways to widen our funding base.
We are of course fortunate to own land in Parnell, central Auckland. Bought almost 130 years ago, during the Long Depression of the late 1800s, ironically the income derived from it came to the party for us during the GFC. Having long since moved away from institutional guardianship, sheltered workshops and hostel accommodation, we put that land to better use by professionalising our property portfolio.
We formed a separate entity to oversee and manage our property. We upgraded premises, charged out the operating expenses and raised leases to market rents.
Donated dollars were not invested in property. We were simply smart with the assets we already owned.
Today, thanks to that prudent management, our Parnell property has grown to become a unique cluster of academic, medical, retail and community facilities – providing 10-15 per cent of our annual income.
We also thought long and hard about our spending. Among other things, we started benchmarking all our salaries externally, and moved to cap expenditure.
Today, the state of our books speaks to the success of the steps we’ve taken above, with budgeted revenue of $37m this year. It puts us in the top 10 health and disability charities – but only just. Not that it’s a bad thing: such charities are critical to the health and wellbeing of hundreds of thousands of Kiwis.
Organisations the size of the Blind Foundation have a responsibility to provide essential services year in, year out. We might be a not-for-profit but, if we’re to keep helping Kiwis, we must also be not-for-loss.
Now, with the possibility a recession is on the way, it’s imperative the charitable sector shores up its financial defences.
What’s more, we now operate in a funding environment even less conducive than during the GFC. State funding has stayed the same over the past decade, eroded by inflation. It once accounted for 30 per cent of our income. Today it’s closer to 20 per cent.
Meanwhile, we’re experiencing a surge in demand for services as the population ages. The number of people registering with us has nearly doubled in the past year. Conditions such as glaucoma, age-related macular degeneration, and diabetes are all causing Kiwis to lose their sight.
We have a self-imposed mandate to support them to continue to live meaningful lives. To do this, we cannot operate hand-to-mouth. The need is increasing, but the dollars don’t necessarily follow.
That’s why our board strongly believes charities must operate like businesses, with a solid plan and firm budget. We must balance short-term wants with long-term needs. We should be free to diversify our income streams, including maximising the returns from the assets we own.
The idea that a charity with a surplus must be doing something wrong is archaic and counterintuitive. Donors want to know their money is going to a charity with sound financial management, and people receiving our services value staff who are experts in their field.
As mentioned, we’re lucky to still own the Parnell land we started with in 1890. In the 130 years since, Auckland has grown around us and what was once farmland is now prime real estate. We’ve resisted calls to part with it over the years because we know selling the family silverware simply isn’t smart.
We know too that we can’t rely solely on our supporters and the Government, so we’re using independent expertise to explore ways to utilise our assets wisely.
All this boils down to getting on with the business of being New Zealand’s primary provider of vision rehabilitation services.
Charities such as us are an important part of the country’s health and disability support system. We must ensure we’re capable of being there in the good times and in the bad.
This article is written by Rick Hoskin, RNZFB Board Chair.