New@y! - Australian Conservation Foundation .: Chartered Accountants Student Challenge :.

New@y!

Team members:
Martin, Meng Khim Lim (La Trobe University) ,
ZHE KHAI GOH (University of Technology, Sydney)

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Synopsis

The Australian Conservation Foundation(ACF) has been promoting about environmental awareness for more than 40 years. From preventing sand mining to signing nuclear treaty, ACF has been one of Australia’s leading non-profit organization.

According to last year’s report, 93% of ACF’s income depends on individual donors. This is a big threat to ACF during an economic downturn, as donors' discretionary income decreases. This is a common factor faced by any other Non-Profit Organizations in the world. To avoid that, ACF must be more economically resilient and self sustaining.

Therefore, ACF must have an alternative income to decrease the company’s dependence on donors. Drastic actions should be taken to change those numbers. In our report are a few strategies that require high investments that would produce a bigger result.
1. Brand marketing/ merchandise
2. Start a magazine
3. Start a foundation

All profits made by these sales are going directly to the environment and decreasing the dependence on individual donors. Therefore making the company more self sustaining.

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Dear Neways!

Your report raised some interesting points. I think that the use of sponsorships is a very good idea.

I was wondering whether the use of co-branding (mentioned in your marketing section) would have any implications for the organisation's integrity? What type of products would it put it's logo to and how could it be sure that these products, and the company that makes them, fit within ACF's objectives and values?

Also, would the proposed magazine be produced separately from the already establish ACF Habitiat magazine? Wouldn't this produce some duplication?

Look forward to you response.

Well Done.

Renae

By Renae Fernandez on June 10 2008, 11:31

Hi Renae,

Thanks for reading out report. I’m sorry that some parts of it isn’t clear/detailed enough, especially the marketing section.

Firstly, about the co-branding. We would propose to co-brand only with companies which meet specific requirements, such as: companies that practice corporate social responsibility, not produce hazardous wastes or any sort of actions that may cause harm to the environment. This co-branding will happen mostly on everyday-life products (soft toys, t-shirts, toothbrush, light bulbs, etc). Therefore, making a small portion of “everyday-life spending” go to the environment. The ACF logo on the product is not meant to spread any idea, but to let the customer know that by purchasing this product, a small amount goes to ACF.

As for the magazine mentioned in the marketing section, our idea is to establish a new hardcopy magazine replacing “Habitat”. The name “Habitat” can still remain the same, and it should be available to the public, instead of giving free copies to ACF members only. It should be sold to the public at a fixed price, and a member’s rate is given to members. We suggest that the new magazine should be more frequent, (e.g. 6 times a year) and contain more materials in a wider scope to attract the attention of buyers. Advertising in this magazine should be open, to make the cost less. (e.g. The Body Shop’s product advertisement) ACF has published the magazine since 1973. We suggest that it is wise to expand in this field, as ACF is experienced and resourceful.

In addition, congratulations on producing a very well organized report. I like the fact that all the points are well organized, it makes it very easy for the reader. I would like to take this opportunity to ask a HSC a few questions if I may. Under the expenditure risk section, HSC recommends to lock-in prices now for the future. Well, according to the theory of demand and supply, wouldn’t the price of property decrease as purchasing power is decreased, during an economic downturn? Therefore ACF will still be paying the same amount set in the previous contract, which is higher than the amount during an economic downturn. Wouldn’t this cost ACF more expenses?

Look forward to your reply. Thanks

Martin.

By Martin on June 15 2008, 02:59

Hi Martin

Thanks for your question. A reply has been posted on our comments page.

Cheers
Joel

By Joel Seah on June 16 2008, 16:11

Thank you for your submission. We were interested in you ideas around building strategic links with business through corporate partnerships. What checks do you think ACF should carry out prior to entering into a corporate partnership?

By Judge on June 17 2008, 20:40

Hi guys from Neway,

I thought you raised some interesting ideas....

Firstly though, small typo! you say ACF raises 93% from individual, 7% from the govt and 1% from business! They are doing well - 101% ;-) but good point to raise the fact that not enough is being brought in from business...

That was a good idea and so was your idea of furthering corporate links...most think of this area as increasing the donations received from corporate giving but you have some thing original here in trying to establish tie ups with corporates but also work to reduce pollution with them. After all corporates are big polluters also so why not?

You make a good point that amongst all ACFs assets, perhaps an invaluable and most unmreasurable asset avaliable to them is their brand equity. So why not use this to allow companies to promote enrivonmental saving products like lights etc to boost that companies sales! great point. Imagine if they could get 1.5% of the price of millions of light bulb sales as a royalty type payment. Could become an important revenue stream... I wonder if this 'commercialisation' would violate any of the written or unwritten principles and perhaps the spirit of the charter establishing the ACF though... and could this commercialization cause a backlash in terms of fewer donations thorugh bequests?

I like the idea of the magazine - perhaps this could be a benefit to becoming a monthly donor/member of ACF... the magazine would serve as a constant reminder of the work ACF does and do that much more to place ACF in the priorities of it's donors...

Good luck guys.
Regards
Dale

By Dale Joachim on June 19 2008, 11:08

Dear Judge

1)The company that requires to be of a strategic partnership should have almost the same objectives that are relevant to ACF by checking their corporate that are and/or wanted in becoming conservation friendly and sincere towards the common goals.

HSBC – Mission Statement
“Human development has achieved tremendous advances in the last 200 years, but it has come at a price to our environment. We have started to eat the natural capital of our world; now we must rebuild that capital”
“Stephen Green, Group Chairman, HSBC Holdings plc”

ACF – Values
The Australian Conservation Foundation is committed to inspiring people to achieve a healthy environment for all Australians. For over 40 years we have been a strong voice for the environment, promoting solutions through research, consultation, education and partnerships. We work with the community, business and government to protect, restore and sustain our environment.

2)ACF needs to ensure the company is financial capability and has substantial excess capital in supporting ACF financially in relates to this challenge.

HSBC – Commitment
HSBC is committed to improving its global environmental profile. A pilot scheme has been completed, showing the viability of investing in innovative and technology-based environmental initiatives and, from 2007-2011, we will invest US$90 Mil in projects such as renewable energy technology and water and waste reduction. The Global Environmental Efficiency Programme will help us to reduce our own environmental impact and place sustainability at the heart of our business. A number of initiatives have been set up under the following key areas.

New@y!

By ZHE KHAI GOH on June 19 2008, 21:39

The proposals are welcome. Maybe some of the present operations at ACF with the present sponsors could be further enhanced whereever necessary for a stronger & lasting footing.--Good attempt!

By cjgoh on June 21 2008, 14:26

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