The challenges faced by the not-for-profit community sector in maintaining values

In this country, in this century, we are also facing a challenging – though hardly comparable – environment in which to address social disadvantage. In our society, social political and economic dimensions intersect to entrench inequality, evident for example in:

• The increase in the proportion of Australians living in poverty from less than 8% in 1994 to over 11% by 2006 (NCOSS, 2010)
• The particular and all-pervading disadvantage in indigenous communities
• The restructuring of labour markets which has resulted in long-term unemployment for many – particularly unskilled workers, people of CALD backgrounds, people with disabilities and young and older workers.
• Significant shifts in demography, notably the retirement of the baby boomers and an increasing ageing population
• Strident voices of racism and populism that prevail in the political context
• An environmental crisis that we, and the world, have been slow to acknowledge and address – with very far reaching social and economic implications and which we have seen so graphically demonstrated across the globe in recent months.
  (NCOSS, 2010; ACOSS 2009; ACOSS 2010)

The not-for-profit community sector also faces its own set of challenges:

Relationships between government and the not-for-profit sector

• There has been a progressive shift in the relationship between government and the not-for-profit sector towards a funder/provider model. This mitigates against creativity, engenders a ‘them and us’ attitude and creates a lack of understanding about the respective roles. This challenges our capacity for far-sighted vision and our influence on social policy. In addition, the silo structure of various government departments means that the reporting mechanisms are unnecessarily complex and regularly require duplication. Recent efforts to form a compact between the governments and not-for-profit sectors at both Federal and State levels have met with only limited results at best.

Regulation of the sector

• The sector is hampered by a myriad of complex and cross-cutting regulatory requirements that requires excessive time to cut through the laws relating to incorporation, fundraising and taxation and their associated accountability regimes. For this reason there has been a call for a National Regulator, a one stop shop for the not-for-profit sector.

  This complexity in the regulatory regime also has significant impacts for effective management and governance within organizations.

Competitive tendering and underfunded contracts

• Competitive tendering has meant that often services undercut each other. Services are underfunded and the funding does not properly reflect the true costs of service delivery. Funding rarely covers infrastructure costs including rent, training, IT and administration. As a result, some smaller services have disappeared (Abelló and MacDonald, 2002). In addition, community organisations have needed to become more strategic and focus on business decisions, such as profitability in the employment sector, as well their mission.

Data collection

• Definitions used for data collection and reporting on programs are inconsistent and waste time and other resources. Again the different government departments have different reporting expectations which result in agencies requiring multiple data collection processes. In addition, the information flow is largely one way – feedback is rarely received from the funding body.

Performance monitoring

• Performance monitoring is a vexed issue. Most performance monitoring processes look at monitoring service agreements and assess inputs and outputs, a tick-box approach, rather than outcomes. Organizations receive little information about their performance in relation to specific standards, nor concerning areas requiring improvement.

For profit organizations

• For profit organizations have a significant place in the community services sector, notably in child care, employment services and aged care. There are serious implications for the not-for-profit sector as we face competition from organizations that operate from a profit motive. For example. A recent article in the Financial Review (2nd March) has highlighted potential opportunities for the private sector from the proposed National disability Insurance Scheme.

Workforce

• The not-for profit sector faces significant workforce challenges – including the relative pay inequities, as exemplified by the current wages case, the casualisation of the workforce; the ageing of the workforce and issue of appropriate training and qualifications.

Stifling of innovation

• All of these factors weigh heavily on the sector and combine to stifle innovation and our capacity to formulate new approaches to emerging needs. There is very limited opportunity for organizations in the sector to imagine, create and experiment and to seek funding for issues not yet on the mainstream agenda and solutions outside the current focus of government. Our vision, independence and capacity for responsiveness are all compromised.

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Related posts:

1. What are the values of the community sector?
2. What do the values of the community sector look like in practice?
3. Challenging Inequality: Social Action in an Ever Changing World – The Community Sector
4. What principles drive community based social service organizations in Australia?