Thursday, January 21, 2016

Privatisation by stealth: The Abbott/Turnbull Government and Centrelink

'What I am basically saying is that welfare must become a good deal for investors, for private investors. We have to make it a good deal for the returns to be there, to attract the level of capital that will be necessary in addition to the significant injection of capital and resources that is already provided by the Commonwealth.'
Treasurer Scott Morrison
If 2015 was Centrelinks 'anus horribulus', with complaints up 35 per cent in just two years, and more than 62,000 grievances reported through official government channels in the past financial year, then the next few years are only going to get worse for the beleagured agency and the people who are forced to use its services.
The privatisation of Centrelink, long predicted by analysts of the social welfare policies of the Abbott/Turnbull Government and promoted by current Treasurer and former Social Services Minister Scott Morrison, is accelerating, and will only worsen Centrelink's dismal performance and reputation.

In March 2015 Kelly Tranter wrote about Government plans to privatise Centrelink.
As Tranter points out, the 2014 report of the Government's National Commission of Audit recommended the Government investigate “options for outsourcing part or all of the Department of Human Services payments system, including Centrelink.  

The report paved the way for the Government’s plan to move towards privatisation of the Department of Human Services including Centrelink, Medicare and Child Support services.
Aware of the political risks of the direct privatisation of Centrelink,  the Abbott/Turnbull Government has adopted a strategy of  'privatisation by stealth and increments'.

In September 2015, the Abbott/Turnbull Government and the Department of Human Services sought bids from private sector partners  under its billion-dollar, "once-in-a-generation” welfare systems replacement for the software platform to support a new payments engine.

Outsourcing of Centrelink services is another form of privatisation by stealth.
Since 2012 Telstra has run Centrelink's phone services, after it won a 5 year contract to connect  Medicare, Centrelink and Child Support and provide mobile voice, broadband and support services for over several thousand staff across more than 855 sites. Telstra has lost up to $90 million on the deal.
The losers in this outsourcing arrangement include callers to Centrelink phone lines, who have seen services grow worse since the deal was signed in 2012, taxpayers who have seen little value from the outsourcing and Telstra's shareholders.
A number of Centrelink call centres have been outsourced to corporate operators since 2014 when Telstra took over a number of call centres and there are plans to outsource all call centre operations to Telstra.

Privatisation by stealth also occurs through benign neglect. This occurs when Government runs down and undermines the capacity of  Centrelink to perform its responsibilities, through staff cuts and staff freezes; outsourcing and fragmentation of services to private providers who deliver poorer quality services; constant changes to policy and eligibility requirements; underfunding, funding cuts and restrictions; constant restructuring; failure to address problems and failure to invest in systems, process and technology to meet demand.

The result is poorer quality service, ineffectiveness and the resultant lack of public confidence, which is used as evidence to justify handing over the agency's responsibilities to private sector providers, on the grounds they will deliver services more effectively and cheaper (which is untrue).
The extent to which the capacity of Centrelink is being undermined by the Abbott/Turnbull Government to justify privatisation is evident in the range of problems it faces:
  • An Auditor-General' report in May 2015  found almost a quarter of the 57 million phone calls made to Centrelink last year went unanswered, and Australians spent 143 years waiting in vain to speak to the agency in 2013-14, before simply hanging up. About 13.7 million calls did not make it  to even the point of being put on hold, after they were blocked or received a "busy signal".
  • The Australian National Audit Office’s Management of Smart Centre’s Centrelink Telephone Services Report showed that approximately 40 per cent of all incoming calls result from failed online or self-services and the growth of digital transactions has not reduced demand for call centre services as was anticipated.
  • The department was savaged in a midyear National Audit Office report for its customer service performance and ended the year plagued by serious website malfunctions. In November and December, clients suffered through weeks of disruption to the Centrelink websites used by millions of Australians to manage their payments and report their work activities. The agency was forced to apologise after weeks of "intermittent issues" left many clients unable to log onto their account
  • A New Year’s Day glitch caused 70,000 people to be told they owed up to $800 to the Government.
  • DHS staff wages and conditions have been under attack  The 2014-15 Australian Public Service ‘State of the Service Report’, shows that only 59% of APS staff believe they are paid fairly, down from 67 per cent last year.
  • The Minister has failed to respond to Audit Office and Ombudsman reports which note service delivery failures in customer identity protection, call wait times, online and face to face services.
  • The Commonwealth Ombudsman’s follow-up review of service delivery complaints at Centrelink has revealed that problems have persisted for more than 18 months after his initial report was published in April 2014.
  • Clients are being "shooed away" from Centrelink offices and told to take their problems online, resulting in an avalanche of complaints.
  • Frontline staff are facing a 20 per cent increase in instances of customer aggression, blamed by the opposition and unions partly on frustration at the agency's customer service performance.

The Australian Unemployment Union (AUU)- an organisation of the unemployed, for the unemployed that fights for a fair and humane welfare system for all-  argues that  Abbott/Turnbull Government plans to  hand over the responsibility to make income support payments to local service providers, both corporate and NFP providers, instead of Centrelink, is further evidence of the privatisation of Centrelink. 
The legislation, to be phased in on July 2016 will initially effect around 2000 unemployed workers. 

The legislation will give job agencies unprecedented and sweeping new powers over the lives of unemployed workers.
The AUU currently has a petition** here opposing plans by the Abbott Turnbull Government to privatise Centrelink by handing over to local service providers the responsibility to make income support payments instead of Centrelink.
The full text of the AUU petition is below:
In December 2015, the Coalition Government introduced legislation to reform the rural Community Development Program (CDP) "so that local service providers will make income support payments instead of Centrelink". The legislation will be phased in on July 2016 and will at first effect around 2000 unemployed workers.
This is the beginning of what we have all been dreading: placing the functions of Centrelink in private hands, or in other words the privatisation of Centrelink.
Putting the functions of Centrelink into private hands is a recipe for disaster. Byputting a profit motive into the Social Security System, every Australian citizen's right to Social Security is under threat.
In an ominous press release, the Minister for Indigenous Affairs Nigel Scullion stated “under these reforms, there will be more local decision-making by providers who know the jobseekers and have closer connections to what is going on in communities. Payments will be made weekly so remote jobseekers have immediate access to their money and feel the financial impact of not turning up to activities straight away – not weeks down the track."
Currently, legislation states that the employment services industry is not able to make compliance decisions as these decisions must be made by Centrelink. It appears that this legislation aims to change that, giving job agencies unprecedented and sweeping new powers over the lives of unemployed workers.
Starting the privatisation of Centrelink in the rural Community Development Program is yet another example of the Government using Indigenous Australians as guinea pigs to test its new cruel and unusual policies towards the unemployed.
The Government hopes that if they privatise Centrelink out in the remote areas of the Northern Territory no one will notice. We have noticed and we think it's disgraceful.
An attack on one unemployed worker is an attack on all workers. We must stand in solidarity with our Indigenous brothers and sisters before it's too late.
Sign this petition and let the Government know we firmly oppose its attempts to privatise Centrelink.
 ** Other petitions by the AUU are here, including one calling for the prosecution of Max Employment over allegations aired on ABC 4 Corners Program in 2015 that Max Employment was involved in systemic rorting, gaming and mistreatment of the unemployed.
Four Corners aired allegations that  Max Employment regularly sends unemployed clients into "irrelevant training courses" offered by its training organisation arm, thereby enabling Max Employment to collect two separate payments from the Government and maximising its profit in the process.
I have blogged about the unlawful practices of Max Employment here and here.

Tuesday, August 18, 2015

Opposition mounts to Abbott Government's Cashless Welfare Card

Greens Senator Rachel Siewart has made clear her party's opposition to the Abbott Government proposal to introduce a cashless Welfare Card for Indigenous and non-Indigenous people. Her media release is below.

Legislation for a 12 month trial of  the Welfare Card in a number of locations will be introduced into Parliament this week, but can only pass with the support of Labor or at least 6 crossbench senators.

The idea for the Welfare Card was originally proposed by philanthrocapitalist and mining billionaire Andrew Forrest who recommended a cashless welfare card for all working-age Centrelink clients in his 2014 review of Aboriginal employment.

The Welfare Card aims to prevent welfare recipients gambling or buying alcohol or drugs. The intention is that the card will apply to every adult  who happens to be on welfare. It is promoted as a way to stop alcohol fuelled violence and abuse of women and children.

There are two distinct elements to the proposed Welfare Card.  Firstly, the introduction of a cashless welfare payments system, and secondly, the implementation of universal restrictions on the spending of those welfare payments (including the inability to withdraw cash).

In the trial sites the card will target Indigenous and non-indigenous people and veterans, aged pensioners and others will be able to opt into the card should they choose to do so. 

In the trial sites 80 per cent of all welfare payments will be placed onto the cashless debit card and the remaining 20 per cent will go into an ordinary cash account.

However, as Eva Cox has shown there is no evidence such programs work.  She argues that such programs start with the wrong assumptions, that the spending of income recipients is the problem.

Cox argues that they can undermine recipients’ capacities to make their own choices, costs a lot per person to administer, which could be better spent on other services, reduce the focus on external problems (such as job seekers greatly outnumbering jobs and employers' prejudices affecting work prospects) and blames the most vulnerable and reinforces hostile public views

An independent evaluation of the Northern Territory Income Management Program concluded:

The evaluation could not find any substantive evidence of the program having significant changes relative to its key policy objectives, including changing people’s behaviours.

More general measures of wellbeing at the community level show no evidence of improvement, including for children.

The evaluation found that, rather than building capacity and independence, for many the program has acted to make people more dependent on welfare.

Unsurprisingly, there is division among Aboriginal leaders, with some supporting the proposal and others opposed to it.

ACOSS's statement opposing the Welfare Card is here.

Critiques of the Welfare Card proposal are here, here, here, here and here.

Christopher Chew from Monash University analyses the proposal from an ethical perspective and concludes:

In summary, it seems that the proposal for a Healthy Welfare Card is disproportionately paternalistic, rests on controversial and elitist assumptions about welfare recipients and the nature of welfare system, and will only serve to infantilise and alienate an already vulnerable part of the Australian community. It is most certainly not empowering, will not give people complete freedom and will certainly not end paternalism. Perhaps the intent of this amazing doublethink is that “welfare recipients” will become as demonised as the ‘illegal boat people’ of election campaigns past.

The proponent of the card, Andrew Forrest has contributed to this important social policy debate by dismissing anyone who critiques the proposal  as 'useless “hand wringers and pontificators'.


Extract from media statement by Senator Rachel Siewart

"I urge the Labor party to be genuine opposition when it comes to voting on legislation that will seek to rollout the healthy welfare card trials.

“It is incomprehensible that a paternalistic thought bubble by a billionaire could materialise with the support of the Labor party, rolling out as early as next year.
80% of someone’s income support forcibly quarantined to a card will make life remarkably harder for this already struggling group.

“Limiting access to cash will severely restrict the ability to budget and decision making. Whether it be at the markets, lunch money for their kids, or a bus fare – all these things add up and may not be available via card payment. 

"Most importantly people have spoken of being made to feel like second class citizens when talking about their independence and dignity.

“We know that paternalistic top down measures do not work. Income management has not worked. We know from evaluations that income management hasn’t delivered results. The healthy welfare card is just a continuation of this approach.
“The Government should focus its energies on a range of measures and wrap around supports; just restricting spending and access to cash doesn’t address the underlying causes and people will find other ways to buy alcohol and money for gambling.

“The Government and it appears the Opposition are desperately supporting silver bullet measures, these are complex issues that need to be addressed.

“The Australian Greens will not be supporting the healthy welfare card in the House of Representatives or the Senate. We will move to send this measure through to a Community Affairs inquiry so that it can be further scrutinised.

“We must abandon top down approaches that have failed in the past and will fail again. We must work closely with community members to address disadvantage."

Sunday, July 26, 2015

Challenging market orthodoxy: the economic lessons of Elinor Ostrom

It is time that those of us concerned about social and economic justice and the role of the NFP sector and civil society start developing serious policy alternatives to the market driven policies that are being imposed in social policy and the delivery of social and community services.

Three years after her death in 2012 the work of  Elinor Ostrom remains more relevant than ever for those of us campaigning for alternatives to the contemporary orthodoxy of market fundamentalism and neoliberalism that has colonized large parts of the not-for-profit and civil society sectors.
 Ostrom who was a Professor at Indiana University was the first woman to be awarded the Nobel Prize for Economic Sciences in 2009.

Ostrom's work challenged and rebutted fundamental economic beliefs, particularly free market and neo-classical economic paradigms. Ostrom was particularly concerned with  relational aspects of economic activity — the ways in which people interact and negotiate with each other to forge rules and informal social understandings.

Ostrom's early work focused on what she called
Ostrom argued that many public services depend heavily on the contribution of time and effort by the persons who consume these services, i.e. the clients and citizens.
Ostrom believed that services rely as much upon the unacknowledged knowledge, assets and efforts of service ‘users’ as the expertise of professional providers. It was the informal understanding of local communities and the on the ground relationships that make services more effective.

Co-production describes the relationship that exist between ‘regular producers’, like health workers, police, and schoolteachers and their ‘clients’ who may be transformed by the services into safer, better educated and/or healthier persons.

Ostrom defined
co-production as

 “…the mix of activities that both public service agents and citizens contribute to the provision of public services. The former are involved as professionals, or ‘regular producers’, while ‘citizen production’ is based on voluntary efforts by individuals and groups to enhance the quality and/or quantity of the services they use”

One implication is that privatization of public services and the turning over of services to the market fundamentally transforms the relationship between provider and service user, hampering the development of co-production and democratic governance.

Her later work examined how people and communities collaborate and organize themselves to manage collective shared resources like forests, fisheries and natural and social resources. The research overturned the conventional wisdom about government regulation  and challenged the idea that private ownership of public resources is better and more effective than the public and collective sphere.

Ostrom's work provides clear evidence  that the commons-based traditions of cooperation and communal management of resources is not a violation of basic economic common sense.

Her work undermines political conservatives and mainstream economists who denigrate collectively managed property and government and who argue that only private property and the "free market" can responsibly manage resources.  Her work also directly challenges current ideas that privatization and private ownership and expert management of resources is a more effective strategy than collective and public management

Ostrom advocated a “polycentric” approach to managing shared or common resources involving oversight “at multiple levels with autonomy at each level. She argued that shared management of resources helps to establish rules that “tend to encourage the growth of trust and reciprocity” among people who use and care for a particular commons.

Ostrim argued that key management decisions should be made as close to the scene of events and the people and groups involved as possible. Her work showed that the people most affected by or with a stake in shared or common resources are the ones best able to collaborate to use and manage those shared resources effectively and sustainably.

Her work demonstrates that ordinary people are able to create rules, institutions and systems that ensure the equitable and sustainable management of shared and common resources, what is often called our 'common wealth'.

She demonstrated the importance of shared (collective) rather than expert or private management of resources and knowledge and emphasises the importance of active citizen participation. She cited a comprehensive study of 100 forests in 14 countries that detailed how the involvement of local people in decision making is more important to successfully sustaining healthy forests than who is actually in charge of the forests.

Bollier writes of the significance of Ostrom's work:

In the 1970s, economics was quickly veering into a kind of religious fundamentalism. It was a discipline obsessed with “rational individualism,” private property rights and markets even though the universe of meaningful human activity is much broader and complex. Lin Ostrom pioneered a different, more humanistic way of thinking about “the economy” and resource management. She originally focused on property rights and “common-pool resources,” collective resources over which no one has private property rights or exclusive control, such as fishers, grazing lands and groundwater. This work later evolved into a broader study of the commons as a rich, cross-cultural socio-ecological paradigm. Working within the social sciences, Ostrom proceeded to build a new school of thought within the standard economic narrative while extending it in vital ways.

 Ostrom's work also has direct relevance to the current economic and environment crises. She wrote:

"We cannot rely on singular global policies to solve the problem of managing our common resources: the oceans, atmosphere, forests, waterways, and rich diversity of life that combine to create the right conditions for life, including seven billion humans, to thrive.....Success will hinge on developing many overlapping policies to achieve the goals,.......We have a decade to act before the economic cost of current viable solutions becomes too high. Without action, we risk catastrophic and perhaps irreversible changes to our life-support system.”

Articles written in memory of her work are
here, here, here and here.

A reading list of her work is

The last article she wrote before she died is

Her last book, published just before her death was titled Working Together: Collective Action, the Commons, and Multiple Methods in Practice, and describes the advantages of using several different research methods to study a problem.

Tuesday, April 29, 2014

What is the real intent behind plans to abolish Australia's charity regulator?

This government does not like campaigning and advocacy organisations, and the removal of the ACNC as an independent regulator simply exposes those organisations to attack.  
Greg Ogle

Excellent piece by Greg Ogle,  Independence of Charities Under Threat,  on the real intent behind Abbott Governments plans to repeal the national charity regulation body — the 18-month old Australian Charities and Not-for-Profit Commission (ACNC)- and hand back the regulation of charities to the Australian Tax Office. 

Ogle argues that repeal of the ACNC paves the way for a return to the political attacks of the Howard Government years (1996-2007), particularly attacks on environmental and campaigning groups involved in public advocacy, direct action and activism.

The Australian Charities and Not-For-Profits Commission (ACNC) was set up less than 18 months ago by the Federal Labor government to regulate the charitable sector. The governing legislation for the ACNC ensured the independence of charities and their right to advocate for charitable causes.

The objects of the Act that established the ACNC committed to ensuring a “robust, vibrant, independent and innovative” charity sector. The legislative provision ensured that the governance standards required to be met by charities did not constrain advocacy. 

In essence, the legislation gave charities some protection for pursuing advocacy and activist campaigns that challenge Government policy or corporate malfeasance.

Ogle reminds us of the Howard Government's direct attack of advocacy and campaigning by charities and NGOS: 
Under the Howard government, the tax office was used to attack and pressure charities who were advocated for policies the government didn’t like. This was at a time of recurring public and parliamentary attacks on those charities by senior Liberal politicians like George Brandis, Brett Mason and Eric Abetz, echoed by industry groups and right wing think tanks. The pressure meant that between 2004 and 2007 The Wilderness Society, for instance, faced at least 20 different public calls for them to be stripped of their charity status. They passed the three Tax Office audits of their “political” activity, but other groups like AidWatch had long court battles to secure their tax charity status.
In a separate article, Andrews leads fight to abolish Charities Commission, Mike Seccombe shows how the campaign to abolish the ACNC was driven by the self interest of the financial services sector (who administer charitable trusts) and influential parts of the Catholic Church, who are concerned about revealing financial details of the Church. 

Seccombe notes how Cardinal Pell, former Head of the Catholic Church in Australia and confidant of Prime Minister Abbott and Minister Andrews, made it clear that he opposed the ACNC.

Although there were some initial concerns among charities about the likelihood of increased compliance and regulatory costs, the majority of the charity sector now support the ACNC. Seccombe describes the campaign waged by the powerful financial services industry to abolish the ACNC

While the financial services industry claimed they are concerned about the cost of complying with its financial disclosure requirements, Seccombe shows that their real concern is the likelihood of scrutiny by the ACNC of their  administration of charitable trusts, that would reveal the grossly excessive fees they take for looking after the bequests of philanthropists.

Seccombe quotes Tim Costello CEO of World Vision Australia and Chair of the Community Council of Australia: 
“It’s pretty apparent there are only two main groups that are strongly opposed. The trustees, who handle dead people’s money, are a major source of opposition because they don’t want transparency about what they charge. The other is the Catholics".
Ogle refutes the Minister's claim that the abolition of the ACNC is designed to reduce red tape, by highlighting  other ways that the Federal Government could reduce red tape, but refuses to do so.

 Ogle gets to the heart of the matter:
This government does not like campaigning and advocacy organisations, and the removal of the ACNC as an independent regulator simply exposes those organisations to attack.
Spot on!!! 

Monday, April 21, 2014

The strategic advantage of non profits and civil society groups

image: Storm Force by John Gaffen

"After decades of discourse about how nonprofits need to be more businesslike, I am driven to discuss the differences structurally and in more detail. The admonition to be more like a business is a preposterous proposition—ill informed and exhibiting a sloppy state of mind that tries to draw us all off track to a space of unaccountability. Don’t fall for it. For goodness’ sake—if you want to act like a business, be a business! The major distinguishing factor of a business is its ability to build the wealth of individual owners rather than build collective well-being and value. Decide which bottom line you are dedicated to, and make it your own"
Ruth McCambridge

Like Ruth McCambridge, I have long been a critic of those who claim that nonprofits should be more business-like and operate like business to remodel themselves along business and market lines. It is both an ill informed and dangerous claim.

The claim reflects a naive understanding of non profit organizations and is predicated on a false assumption that non profits need a dose of "business thinking" to be more effective and effective.

Others who express similar views to McCambridge and I, include Michael Edwards and Deborah Allcock Tyler.

In her article Use it or Lose it: Frittering Away Civil Society's Strategic Advantage in the excellent online and print journal Non Profit Quarterly, of which she is the Editor, McCambridge argues that non profits have a strategic advantage that they are often blind to because they don't recognize or use it. 

And she argues that blindness to this strategic advantage is leading the nonprofit and civil society sector to lose its opportunity to become more influential, particularly in terms of responding to debates and solutions about important social, economic and political issues.

McCambridge argues that this strategic advantage springs from a number of distinguishing characteristics of non profits that need to be valued much more and worked with in a more conscious and powerful way.  

Strategic advantage is not to be found in the lure of competition, business metrics, market orientation, growth for growth's sake and obsession with money and profitability.

Some of the strategic advantages highlighted in Ruth McCambridge's article include:
  • the tradition of collective association and collective endeavor for the common good
  • the tradition of being close to constituents and to communities and of providing opportunities to maximise and amplify their voice
  • the importance of shared values and collective aspirations
  • the importance of scale, particularly smallness and nimbleness 
  • close engagement and shared fit between the interests and aspiration of those who run the organization and those who benefit from its activities
  • the focus on mutual benefit and the common good
  • the tradition of mobilizing people to work together for shared value and of working non competitively in networks
  • the important of trust and credibility in the eyes of constituents and stakeholders, rather than public image and brand 
  • acting as the vehicle through which constituents and citizens can take action for the common good and mutual benefit
  • appealing to common cause and individual aspiration through activity aimed explicitly at common benefit as a way for engaging the energy of stakeholders.
  • availing ourselves of our constituents/stakeholders’ unpaid/volunteer labor.

Saturday, April 12, 2014

The Abbott Government, social policy and the greedy ghost of market fundamentalism

Treasurer Joe Hockey's announcement that the Abbott Government plans to increase the pension age (from 67 to 70), impose more welfare means testing and introduce co-payments for medical services comes as no surprise, but provides more evidence of the continuing assault on public spending for the less well off, the vulnerable and disadvantaged.

The Abbott Government has already imposed severe spending cuts across many portfolios and shown its intention to cut back public expenditure for the less well off by fundamentally transforming income support in areas such as the Disability Support pension (DSP), family and welfare payments and welfare support for the long term unemployed.

In addition, there is the expectation that both the report into the Welfare System (the McClure Review) and the report of the National Commission of Audit (the Business Council of Australia report), both due to be released soon, will recommend serious austerity policies and market driven social policies.

The Abbott Government's market fundamentalist policies and its austerity agenda are intended to dismantle public spending for the less well off and the vulnerable, and fundamentally transform public spending and public assets to make them suitable to deliver profit to the business and corporate sector and largess to the already well off.

What is also worth noting is that this fundamental transformation of social policy and welfare support is being undertaken without any real consultation with the social policy and welfare sector, and continues to be driven by advice from, and the agendas of influential pro- business and corporate lobby groups, such as the Business Council of Australia.

Moreover, the Abbott  Government has consistently concealed its real social policy intentions and denied it was planning to impose these policies. None of the policies were made public prior to the last election and back in November 2013 Treasurer Joe Hockey lied when he said that the Government had no plans to increase the pension age.

While it dismantles social policies that support the less well off and the vulnerable it retains and expands profligate policies for the corporate and business sector and the rich and already well off, such as superannuation tax concessions, various housing-related tax benefits, paid parental leave, asset tests and corporate tax benefits, to name but a few.

On his blog En Passant former Tax Office economist, blogger, activist and academic John Passant alerts us to the hypocrisy and deceit of Treasurer Joe Hockey's proposals on the age pension:
Let me get this right. The revenue forgone on tax concessions for superannuation at $45 bn will soon be more than the cost of the pension (over $40 bn). Of that $45 bn in tax concessions $10 to $15 bn will go to the top 10% of income earners. Yet Australia’s greatest Treasurer, Joe Hockey, wants to rein in expenditure on the pension by for example extending the access age to 70 (after Labor increased it to 67 over time by 2023) and tightening up the asset test to perhaps include the family home. Priorities. 

According to the OECD Australia has one of the lowest relative pensions of any member countries (Turkey and Mexico are lower) and 35% of Australian pensioners live in poverty. Priorities.

Monday, March 31, 2014

So are there too many non profits?

Like Deborah Allcock Tyler I am constantly annoyed when I hear business people, Ministers, senior people in Government agencies, and many people in the non profit sector complain that there are too many non profits, particularly too many small non profits.

The claims vary- overlapping or uncoordinated services, duplication of effort and resources, failure to'get their act together', lack of efficiency, wastage of resources and reduced effectiveness, too many different voices, too many agencies for Governments to deal with. I have heard them all.

And the suggestion that follows is usually that someone- Government, the sector, the bigger agencies, the smaller agencies- should rationalise and reduce the number of non profits, particularly smaller ones who, it is claimed, are often unviable and less effective.

Many Government agencies have operated on this assumption for years, and have used their contracting and procurement regimes as a defacto strategy to rationalise the sector.

On many occasions I have heard senior Government officers and leaders of nonprofit organisations admit that one benefit of the contracting and procurement regimes that Federal and State Governments have imposed on the non profit sector here in Australia is that it it leads to a rationalization of the non profit sector by squeezing out what they perceive as 'unviable and less effective' (they mean 'less businesslike') non profits, usually smaller agencies.

Obviously, non profits should look at ways they can work more effectively with others to reduce duplication and improve their effectiveness and impact. This includes exploring collaborative partnerships with other non profits, if it is a way to deliver better outcomes for the people and the communities they exist to serve.

However, I have never understood the claim that more non profits is a bad thing. In particular, it is fundamentally anti-democratic for someone else to decide which non profits should exist, or to decide that there should be an arbitrary limit on the number of non profits.

Efforts to reduce the number of non profits, ultimately has the effect of reducing the democratic rights of citizens to take action.

And compare this claim that there are too many non profits, with views about for profit businesses. You never hear the claim that there are too many for profit business, despite the evidence of a huge number of failing, poorly run businesses, engaged in criminal and highly questionable conduct. Rather, the view is that the more for profit businesses there are, the better.

Deborah Allcock Tyler is spot when she writes:

One principle of a free democracy is the ability of people to come together in service of something they care about, regardless of whether or not someone else is already doing it and thinks they're doing it better than anyone else (which they always do!) or, indeed, if others don't think their cause is important..................................

The belief that there are too many charities is pardonable from those outside our sector, who are less likely to see the bigger picture and more likely to see donors and volunteers as willing and obedient stooges and beneficiaries as voiceless, choiceless victims who should be grateful for whatever they get from whomever is allowed to give it.

But that belief is, for me, incomprehensible when held by those within the sector. To them I say this: all right, if you genuinely believe that there really are too many charities, close yours down and that will be one less.
The issue of whether there are too many non profits in the US context is discussed here and here. A Canadian perspective is here.