MSC's Not-For-Profit Funding Model Explained

Here at the Mountain Safety Collective (MSC), we sometimes get asked “What does being a not-for-profit mean”? At its simplest level, MSC is a registered not-for-profit which complies with strict Australian Tax Office (ATO) requirements to ensure that all funding is spent on providing services to the community, which in our case is the Australian backcountry community. As per the ATO requirements, “All profits must go back into the services the organisation provides and must not be distributed to members” and we have a formal Articles of Association that outlines the purposes and governance of the organisation.

Things get a bit more complicated once we dive into the detail…

The MSC Committee

Six MSC Members have been voted on or appointed to the association committee, according to the rules outlined in the Articles of Association. Committee seats are open to application on a rolling two year basis to any MSC Member. Similar to a normal company board, the committee is comprised of a President, Vice President, Treasurer, Secretary and two community seats. The primary role of the committee is to oversee the strategy and finances of MSC, facilitating initiatives that fulfil the purposes of the organisation.

Sub committees can then be formed from other MSC Members to work on specific initiatives, such as women's participation, content development or events. These sub committees then report back into the MSC Committee. Sub committees can be formed for any purpose and might be permanent or temporary and can be proposed by any MSC Member for consideration.

Budgeting

The MSC Treasurer manages an annual budget based on how much income from sponsors, grants and membership fees can be generated in a given year. An expenditure budget is then devised for core operations like the Backcountry Conditions Reports observations and forecasting, insurance, accounting, website development, hosting, membership packs and other administrative costs. We may then have additional budget for special projects like the Avalanche Training Centres that fall outside of the ongoing annual costs. Put simply, the more funding that’s available, the more initiatives can be delivered.

Where things get more complicated at a budgeting level is when funding is provided for specific activities. For example, VicParks grants must only be spent on our Victorian reporting operations, whilst NPWS grants must only be spent on NSW reporting operations. In these cases, budgets are siloed for specific purposes.

If funds are remaining at the end of a financial year, they are not distributed as profits to any individuals, but are retained as equity for future years’ program funding.

Funding Sources

MSC receives funding from three primary sources: Grants, sponsorships and individual membership fees. For our 2022 budget, approximately $90,000 in funding was quite evenly split at around one third from each of these sources. Recurring annual sponsorships and memberships are vital in this mix to ensure we have stable and sustainable revenue to fund our programs.

Importantly, grants are often provided for very specific outcomes, whilst sponsorships receive a defined package of exposure via MSC’s website and social media.

Volunteer vs Professional Services

With our history as a grass-roots community organisation, MSC has relied heavily on volunteers to provide our services in our formative years. This still includes all of the MSC Committee and many of our community field observers, content contributors and event coordinators. However, as the need for MSC’s services grows in parallel with the backcountry community, more services need to be professionalised. For example, in 2022 we’ve expanded our professional field observation team, increased the hours of our Lead Forecaster and engaged an Assistant Forecaster to ensure we can deliver daily reports from a broader and more accurate set of field data. We may even reach the point in the future where we need permanent staff - such is the evolution of organisations like MSC.

Where we do get questions is around the potential for conflicts of interest in terms of MSC Members receiving funds for services rendered or expenses reimbursed. The MSC Articles of Association covers this by noting that MSC Members can be paid so long as it’s in good faith and on terms that are no more favourable than to non-members.

In some cases, as with the recruitment of paid field observers, this was conducted as an open call for tenders on the MSC website homepage and is the model that’s been agreed by the MSC Committee for all future paid services, whether it be graphic design or forecasting.

For the recent co-funding announcement of the CAA Operations Level 1 course, MSC’s funding was designed to specifically reduce individual course fees for participants who committed to at least 12 field observations each for MSC. This saves on paid field observations whilst expanding our network of local, qualified individuals into the future. We were very careful that these funds were not enhancing profits for any commercial organisation before making this decision.

In all of these activities, we are conscious of not to providing advantage to any specific commercial operators and are happy to be transparent with our decision making processes should any questions ever arise.