Inspiring leaders are leading the way on Pay What It Takes

For the last three years the Pay What It Takes (PWIT) movement has been working to transform the way funders work with not-for-profits to address the critical issue of underfunded overhead costs. Here, Jo Taylor, Executive Chair of the PWIT Coalition, provides an update on progress so far and new research as more and more leaders get behind the campaign.

I have had the immense pleasure and privilege of observing how the Pay What It Takes (PWIT) movement has encouraged leaders across the country to use their expertise and experience to lead the PWIT conversation in diverse directions.

Cumulatively, these acts of leadership are exploring and spreading the notion of a crucial concept: Paying What it Takes to create impact. This idea is more than a slogan; it’s a commitment from people like you and me to ensure that for-purpose organisations have the necessary resources to achieve meaningful and lasting change. Such leadership has encouraged many others to lead in their own organisations and sparked multiple collective endeavours.

Why Pay What It Takes?

PWIT leaders recognise that investment is a crucial part of a thriving for-purpose sector, one that is able to deliver the greatest impact. It sounds so obvious, doesn’t it? So why do we need to take such action?

Too often, current funding practices force for-purpose organisations to underinvest in their core operational and infrastructure needs, such as administrative expenses, staff salaries, technology and marketing. Unfortunately, some people in philanthropy, government, the public and the media expect overheads to be minimised or not to pay for them at all. Yet, they are essential to running a functioning, effective organisation. Over time, this underinvestment has the effect of limiting impact and creating financial vulnerability – a phenomenon globally recognised as the ‘non-profit starvation cycle’.

The inspiration for PWIT in Australia came from the groundbreaking work of Bridgespan and five foundations in the US. Their work prompted the seminal Paying What it Takes Report published by Social Ventures Australia and the Centre for Social Impact. The report confirmed that not-for-profits in Australia are underinvesting in critical capabilities due to a pervasive belief that funders are reluctant to provide the full financial support needed to create impact. This report has been a springboard for people to take up leadership on this issue.

Creating positive impact in Australia

At PWIT, we delight when leaders influence multiple parts of the funding system, challenging assumptions, building evidence and capability, shifting policy and practice, and changing people’s mindsets — all to create more positive impact in Australia.

The PWIT report has been mentioned in numerous submissions to the Productivity Commission on Philanthropy and the DSS Blueprint for the not-for-profit sector. The ACT Sector Sustainability Program – Commissioning focuses on exploring full cost recovery funding reform and it too was influenced by Bridgespan and the Australian PWIT report.

The Social Impact Hub has led the adaptation and distribution of the Uncharitable movie in Australia. The film resonates with anyone who has led or managed a for-purpose organisation. It is creating conversations across the country, often prompting the understanding that this is a systemic rather than an organisational issue, galvanising leaders to act.

Inspired by the launch of new Australian research and a NFP Guide by the PWIT Charity Consortium over 500 leaders from over 200 organisations have committed to reframe overheads. This new report gives fundraisers the data and resources they need to begin to change the narrative and reframe overheads over at ReframeOverhead.org.

Follow the PWIT LinkedIn page to read the PWIT New Perspectives Series where leaders share their stories of PWIT, including Sarah Davies, the Chair of the ACNC Advisory Board, and Leah Armstrong, the Regional Manager Australia, for the International Funders for Indigenous People. 

There are so many ways that you can take up PWIT leadership individually and collectively. Together, let’s ensure that for-purpose partners have access to the resources, connections, and support required to create impact now and over the long term.

At the upcoming Philanthropy Australia Conference, you can learn more about what it means to implement Pay What it Takes. Whether you’re starting your journey or looking to deepen your understanding, there will be a number of sessions to support you in honing leadership skills in this area from the PWIT Coalition, the Australia Centre for Social Innovation, the Co-Chairs of Reframe Overhead and the Co-Chair of the ACT Government Sector Sustainability Program. There will also be an opportunity to test the latest tools aimed at spreading PWIT throughout the for-purpose and funding sectors in Australia.