Inside the NFP: How RMHC balances mission with management

In 2022, Eva Mendes visited the families and children in Ronald McDonald House Westmead, Sydney.

High expectations around transparency can add challenges to the work of an accounting professional in the charity space, says accountant Denise Lumsden, General Manager Strategy and Governance at Ronald McDonald House Charities Australia (RMHC).

“We’ve worked on a Statement of Functional Expenses tool, and that’s really aimed at providing more clarity about what percentage of our funding goes towards administration, and what percentage goes towards programs,” Lumsden says.

“Our Board also agreed last year to the implementation of a new finance and payroll system that should make a big difference to our ability to provide great data, both for transparency and to enable excellent business decisions. We want to do all of that for the families that we serve.”

RMHC serves around 35,000 families annually. Through its Ronald McDonald Houses, Family Rooms, Family Retreats, Hospitality Cart, Care Mobile and Learning Program, the charity provides support for families of seriously ill children across Australia.

It’s a federated organisation with a national body, RMHC Australia, supporting 11 chapters, each a separate legal entity. RMHC is one of Australia’s biggest and most trusted children’s charities – its financial and organisational management needs to be exemplary.

Meeting donor expectations

Donors to RMHC, whether individuals offering a one-off amount or organisations bringing multi-year support, expect their money and services to benefit the cause more than the organisation.

“At the same time, regulators and the Australian public expect us to have the rigour, compliance and systems of a limited, ASX-listed organisation, while also making sure all the money donated goes to the intended recipients,” Lumsden says.

“It’s a real challenge, because there’s an expectation that you honour all of your obligations according to governance principles, the ACNC, the Corporations Act and making sure everything is filed on time. But this all requires admin expense.”

Some expenses never make it to the profit and loss (P&L) statement, thanks to the generosity of corporate donors. Sealy Australia, for example, has donated thousands of mattresses for use in 18 Ronald McDonald Houses and 19 Ronald McDonald Family Rooms, used by families free of charge while their child is in hospital.

But of course, many other expenses are paid directly by the charity. Technology plays an increasingly important role in ensuring these costs remain transparent and easily understood by all stakeholders, including donors and potential donors, Lumsden says.

Great cause, great engagement, great talent

The differences between for-profit and not-for-profit accounting aren’t just connected to reporting – Lumsden says a shift in engagement is also noticeable.

“When you’re working as a finance professional in the not-for-profit sector, you are deeply engaged in the mission,” she says.

“Everybody who works for the charity must be focused on mission. I think that is different to corporate life, where some people might be focused on customer service and others on shareholder value, for example. At RMHC, we’re not just doing the accounts, we’re caring for families.”

Having a mission embedded in every role, whether in the national office or directly in the programs at the 11 chapters across Australia, helps the brand attract excellent talent.

“What we search for in our people is values alignment. You’re not going to sit in a back office, disconnected from the front line. You’re encouraged to help out in a house or participate in our programs,” Lumsden says.

“People could be helping out with a fundraiser one week and creating statutory reports the next. We actually like to think our proposition to new staff is different to the normal. Seeing directly how the impact of donations hit home for families is both engaging and humbling. These families are often going through a really difficult time dealing with their child’s diagnosis, and being able to help is a privilege.”

Investment for an assured future

Families have come to rely on RMHC and it has become a recognisable brand. These factors, as well as its size, make responsible financial management for longevity vital.

The charity is also constantly growing. While some medical advancements have enabled an increased level of home care for specific illnesses and conditions, others offer little alternative to inpatient care.

This means that among the families hosted by RMHC properties, an increasing proportion have seriously ill children. Lumsden says that this means the charity is hosting more families with complex needs and that those families are staying for longer periods.

“And so we do have investments, because it’s our responsibility to make sure RMHC is here for Australian families in the long term,” she says.

“At RMHC Australia, we’re working with an investment company to pick ethical investment strategies and portfolios. I’m looking at all options for medium- and long-term investment. That also involves being ready to support initiatives such as repurposing existing facilities and building new Ronald McDonald Houses to support the growing needs.”

Financial management in a not-for-profit environment will always be a challenge, Lumsden says. But it comes with immense levels of engagement and satisfaction.

“People are intrinsically attracted to something that helps others. When you see what people are going through, you can’t help but wonder how you could make this better,” she says.

“The amount of energy and resources required in supporting a sick child is enormous. The whole family is affected. So, it’s an absolute joy to be part of that journey.”