Sustainable Community Organisations - The Context

Let’s have a look at the context. Given time constraints, I will have to give a very broad overview of some of the issues. Not-for-profit organizations in general deal with:

Complexity of Regulatory environment:

We work in a very complex regulatory environment. Whether we are registered Associations or Cooperatives (accountable to the Office of Fair Trading); Aboriginal Associations (accountable to the Federal Office of Indigenous Corporations) or Companies (accountable to ASIC), there is a complex web of governance requirements with which we are required to comply. The changes to the Associations Incorporation Act are involved and can result in greater penalties for directors. We are separately accountable to various funding departments, the NSW Office of Gaming and Racing if we raise funds and the Australian Taxation Office as well as State bodies for tax exemptions.

It has been very difficult for not-for-profit organizations, particularly smaller ones to continuously implement changes as they are enacted State and Federal level and a whole of government approach is needed to provide a holistic approach to any envisaged regulatory changes. To make matters more complicated, there are no clear definitions of charities and charitable law has been based on judicial decisions on a case-by-case basis, using outmoded definitions of charity. As a result, there are inconsistencies in how tax benefits are applied to similar organizations in our sector. This tiered taxation benefits for not-for-profit organizations which means there is inequity. The result can be significant in terms of costs for goods and services to the organization, its capacity to raise revenue and salary package, its perception in the broader community and its relationships with government and business.

On a positive note, work is underway to establish an Office for the Not-for-Profit Sector within the Department of Prime Minister and Cabinet. Its purpose is to drive and coordinate policy reform affecting not-for-profit organizations. This is a major initiative as despite several public enquiries , little has been achieved by way of reform.

Contract and Compliance Costs:

The contract and compliance costs of dealing with government are significant. Time taken in preparing tenders, dealing with varying monitoring or quality regimes, completing acquittals and accountability reports is onerous and this is compounded when organizations are funded by a range of government departments – State and Federal – each with their own compliance regime. In addition, contracts rarely reflect the true cost of providing a service – including infrastructure costs, recruitment and training and Information and Communication systems for example. In many situations, as governments accelerate the process of outsourcing service provision, this is experienced by non-government providers as ‘service provision on the cheap’, with increased liabilities for risk management. In another positive move, the Federal Government has also promised to investigate the feasibility and design of a national ‘one-stop-shop’ regulator to remove the complex regulatory arrangements currently in place.

Workforce:

We face very significant workforce issues. The not-for-profit workforce is ageing more rapidly than the Australian workforce in general and our sector has to compete for labour with the better resourced government and private sectors. Many workers are part time and labour turnover is high. Finding people with the right skills within our limited resources is no easy task.

The ASU wage case and the push for wages parity with government employees have the potential to significantly impact this issue.

Inhibiting Innovation

Service agreements are frequently proscriptive, based on a funder/provider relationship. This inhibits innovation and can lead to a dull uniformity unless service providers are extremely creative within the bounds of their funding agreements. And yet, as we well know if you we look at the fields of arts, science and medicine, the benefits of creativity repay the costs a thousand fold.

Lack of planning

There is no sector wide industry plan in place. While government agencies including Community Services and ADHC have made creditable progress in this area, the lack of planning across the sector inhibits our capacity to address the issues we face. Many workers within the sector move across sub-sectors, from disabilities to ageing to child protection for example. ‘The need for a whole of sector and whole of government strategic approach to the sustainability and growth of the sector is critical to address the common structural approaches facing the sector. Further, there are weak links between research, policy and practice to inform our action and a reactive, rather than pro-active culture

Reforms to the HACC Program

The reforms to the HACC program currently underway have far reaching implications both at the service delivery and organizational levels. As funding arrangements change it is possible that there will be resulting threats to service delivery in other areas of the organization as a result of cuts to infrastructure. For some small organizations, there may even be a threat to the organization itself.

Table of Contents

Related posts:

1. Sustainable Community Organisations in this Time of Challenge
2. How does the not-for-profit community sector maintain our ideals, survive and thrive in this challenging context?
3. What are the values of the community sector?
4. What do the values of the community sector look like in practice?
5. Sustainable Organizations
6. Challenging Inequality: Social Action in an Ever Changing World – The Community Sector
7. The challenges faced by the not-for-profit community sector in maintaining values
8. What principles drive community based social service organizations in Australia?
9. The Future of Community Management: NGO Perspectives – A Practitioner’s View