Friday, July 30, 2010

Funding crises enveloping small not- for- profit agencies

The funding crises affecting Deckchair Theatre, the Fremantle based not-for-profit arts organization, may arise from factors unique to the arts industry (such as declining public funding, lower ticket sales and flagging corporate sponsorship), but it is symptomatic of a much larger funding crises affecting small-not- for-profit agencies in WA.

After 28 years Deckchair Theatre faces its greatest crises, forced to lay off 3 of its 4 full time staff and reduce its operations substantially. Deckchair receives annual funding from the WA Government and it is using an advance of $50k from next years funding to remain afloat before its remaining annual funding becomes available.

The problems confronting Deckchair are similar to those confronting many small not-for-profit agencies around WA, for whom survival is a month by month, even week by week challenge.

There are a number of reasons for the funding crises affecting small agencies. There is growing structural inequality in the not-for-profit sector across all industry sectors between the haves (usually the big agencies) and the have nots (usually the smaller agencies).

The funded NGO sector has seen growing concentration of power, voice and resources as a result of the rapid growth of large NGO's. Government contracting and funding regimes advantage larger agencies who take a greater share of available funding. Governments prefer to deal with a few large agencies than a multiplicity of small agencies. Corporations and business also prefer to deal with and fund larger higher profile agencies. The result is that smaller agencies have to compete for declining funding and are forced to operate in ways that serve funder interests. Viability and survival become ever more precarious.

The adoption of market and corporate practices and managerial values across the not-for-profit sector has the effect of extending market ideology and attitudes across the sector. They become a standard which all agencies are expected to aspire to and are judged by, although this severely disadvantages small agencies who are not funded to a level appropriate to these expectations and requirements (in terms of governance, accountability, management practice, salaries, business planning, risk management etc).

Sadly, government policy compounds the funding problems facing small agencies and the result is that more and more small not-for-profit agencies are struggling to survive, whilst the larger NGO's continue to grow and prosper. This situation is not a positive outcome for the not-for- profit sector, nor for the wider democracy and society.

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