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.

UK not for profit leader warns against adopting private sector models

Deborah Allcock Tyler who is the CEO of the UK based Directory of Social Change is a regular vsitor to Australia and always has important and insightful things to say about the Not-for profit sector

Last time she was in Australia she slammed the idea that Not for profits should be more business like arguing that it is offensive how much is written about how NFPs need to be run better and behave more like the business world.

Debra Allcock Tyler addresses the 2010 Think Innovation Summi

Allcock Tyler argues that the constant comparison between practices in the business and Not for Profit sectors is ironic, as it was the failure of corporate governance and banks that plunged the world into a recession.

Allcock Tyler has recently visited Australia again as a guest of the Victorian Department of Communities to speak about the experience of the big society and its impact in the UK, social finance and the role of the voluntary sector in social change.

One of her messages (one that I and many others have been arguing for years) needs to be stated over and over-  private-sector models are not the solution to deeply entrenched, long-term social problems and complex human and community needs.

Allcock Tyler is a strong critic of competitive tendering and contractual approaches arguing that the move to competitive tendering for government contracts creates a view of NFPs as just another delivery vehicle for social services. It creates a system where NFPs are forced to behave more ruthlessly like businesses, in a competitive manner.

 Allcock Tyler argues that competitive tendering creates a psychological shift about who the client is – with a contract the client is whoever is paying, instead of the grant system, where a NFP determines a solution to a problem and takes it to government for funding. It also this means the big organisations get bigger, and the medium and small organisations are left behind.

Allcock Tyler has warned the Australian not- for- profit sector of the dangers of adopting untested and in many cases failed market- based policies, including social finance, social enterprise and payment by results, which are increasingly popular here in Australia among Governments and which are fiercely promoted by academic think tanks like the Centre for Social Impact and the growing number of corporate funded  and business oriented NFP advocacy groups.

Allcock Tyler writes here:

It was a great trip, even though I came away worried that the Australians are following the UK's lead in government engagement with the voluntary sector - which, let's face it, is not going well. I did point out that they really shouldn't follow our example because we're buggering it up badly (they're Aussies - they like a spade to be called a spade, and an expletive to emphasise the point always goes down well).

You won't be surprised to hear that I was particularly scathing about social impact bonds and payment by results. One rather important sort of chap then asked me how I explained the success of the "Peterborough experiment". I was flummoxed. I'd never heard of it and said that if it was that successful people would have been shouting about it loudly.

Amazingly, on my first day back in the UK I was listening to Today when said 'experiment' was referred to by Chris Grayling, the Secretary of State for Justice. The absolute shocker was his statement that the payment-by-results model used in the social impact bond being pioneered at Peterborough prison was hugely successful - although he hadn't yet had the report with the evidence to back up that assertion. It seems the government is so confident this market-based, capital-intensive model is right that it doesn't need the evidence to prove it.

What really riled me was the bare-faced hypocrisy of this. We in the sector are constantly exhorted to provide evidence of need and success in order to get funding - but the government is allowed to get away with rolling out a controversial, highly contested model of funding the sector without providing evidence. How hypocritical is that? Well, it won't work. Private-sector models are not the solution to deeply entrenched, long-term social problems.

Not for profit aged care provider Baptistcare protests Federal Government funding cuts

Always pleasing to see large Not- for- profit organizations like Baptistcare willing to make a stand  and protest against Government policy that disadvantages the people they serve.

This report describes a protest by staff at Baptistcare's Rockingham aged care facility against Federal Government funding decisions in aged care that are resulting in $500 million being cut from aged care funding.

Baptistcare is extending the protest to 13 of its residential aged care facilities and three disability and community care sites from today, in protest at the Federal government's decision

The organisation has taken the step of launching the visual protest, which includes a call to action via social media, to raise greater public awareness of the government's 1 July adjustments to the Aged Care Funding Instrument (ACFI).


The protest is part of  a larger campaign being run by not- for- profit aged care providers through Aged and Community Services WA  which represents not-for-profit aged care providers which care for 100,000 of the state's most frail and vulnerable citizens.

Flags emblazoned with “Government Neglects Aged Care” flew outside the Gracehaven facility protesting reduced federal funds for aged-care organisations to deliver clinical care services to its residents.

Baptistcare CEO Lucy Morris said the Government had made it almost impossible for not-for-profit residential care providers, like Baptistcare, to provide appropriate care for the elderly and vulnerable.

“Through its adjustment of the assessment tool used to fund high-care services, the Government has stripped money from the services needed to care for older, sicker residents, who have more complex health needs and need higher levels of care,” Dr Morris said.

But Mental Health and Ageing Minister Mark Butler said subsidies would not be reduced and they would continue to grow by 2.7 per cent a year above indexation, per resident over the next five years.

He said early data for providers’ care funding claims made in July showed average subsidies increased from $133.96 per resident per day in June to $134.83 in July.

“Leading Aged Services Australia (LASA) and Aged and Community Services Australia (ACSA) have claimed funding will be cut by hundreds of millions of dollars in 2012 and beyond,” Mr Butler said.

“These claims are clearly untrue, as these early figures show. The Government’s aged care package will increase funding for residential care. This year’s subsidies will be $310 million more than last year.”

ACSA WA chief Stephen Kobelke said WA’s not-for-profit aged care sector had struggled for years to survive in one of the world’s most expensive cities.

“There has been unprecedented stagnation in the provision of aged-care services in WA, to the point that 3368 bed licences have now not been taken up since 2007,” he said.

He said ACSWA figures showed some aged-care providers would face cuts of over $14,000 per resident.

Why should the not-for-profit sector and the vulnerable pay to increase the profits of the private sector?

Richard Denniss of The Australia Institute poses a very good question in this piece in the Canberra Times- why should the not- for- profit sector have to pay for Government to reduce  red tape to increase business profits when the private sector pays nothing?

The ACT Chief Minister Andrew Barr recently announced plans to increase the efficiency of the ACT government and reduce the cost of ''red tape'' for business by creating a Red Tape Reduction Panel to identify, remove and improve outdated, unworkable and illogical business regulations''.

But to pay for this the ACT Government is imposing a $1.4 million tax on the not- for- profit community sector to fund these initiatives. However, the private and business sector who will primarily benefit from the reduction in red tape will pay nothing.

So as Dennis points out, the not-for-profit sector will have to pay for the privilege of less red tape while the taxpayer foots the bill for delivering the same benefits to the for-profit business sector.

"While these initiatives make sense, especially the commitment to remove illogical regulations, it is hard to see why the community sector should be asked to incur the costs of meeting some of these commitments. The government has argued that because the highly efficient community sector would benefit from a reduction in government red tape they should be the ones to pay for it. This argument is as novel as it is confused.

The more money the community sector can raise, and the more volunteers they can mobilise, the more services they will provide to the most vulnerable members of society. There is no profit margin; there is no incentive to do anything other than to support the community. On the other hand, the less money they receive from government, the fewer services they can provide.

It therefore follows that it is not the community sector that has ''lost'' $1.4 million dollars, it is the community. If the government believed that the level of support provided to disadvantaged children and families caring for those with disabilities was adequate, then it might make sense to reduce funding for community services. But if the government believes that the disadvantaged in our community have all the support they deserve it is not clear where or when it came to that conclusion.

It is great that the government is trying to reduce the amount of red tape it produces. Governments should always be on the lookout for opportunities to streamline their processes. But it is not clear why the government has adopted such a different approach to reducing red tape for private business and reducing red tape for the community sector.

As pointed out by the Greens leader, Meredith Hunter, while the community sector is being charged $1.4 million to fund the streamlining of the ACT, the government is footing the bill for the cost of reducing the cost of red tape incurred by the for-profit sector.

Economic rationalists are usually big on user pays, but, in the case of this new tax it is not the users that will pay, but the most vulnerable in our community. While it makes little sense for a government to charge any sector of the economy for increasing the efficiency of government, it makes no sense to ask the not-for-profit sector to pay for the privilege while the taxpayer foots the bill for delivering the same benefits to the for-profit sector. Australia is one of the lowest taxed countries in the developed world and, while Canberra has the highest average income in the country, it has the lowest average tax rate.

If our elected representatives wanted to spend more on community services they could. If our elected representatives wanted to return the benefits of reducing their own red tape to the community sector they could.

Unfortunately for those in the greatest need, the ACT government has gone in a different direction"

The dangers of outcomes based contracting models

As the Barnett Government and the funded not- for- profit sector in Western Australia move to adopt outcomes based contracting models for the delivery of human and community services, the evidence from the UK demonstrates the danger to the sector of such models.

The use of outcomes based contracting models- such as prime or lead contractor models and payment by results models- within the UK Government Work Programme is having devastating impacts for small agencies and disadvantaged service users.

The UK experience is that outcomes based contracting and procurement- in its many forms- results in Governments, or the agents of government, moving public money into bigger contracts and bigger services, which increasingly are awarded to large private and multinational corporations  such as SERCO G4S, A4E, Virgin, Ingeus (There Rein's company) and Capita to name but a few.

The majority of contracts are won by large for profit corporations who claimed that they would sub-contract smaller local not- for- profit providers to deliver tailored specialist services, however this has not happened.

Many of the smaller not- for- profits were used as "bid candy" to enable the corporate providers to tender for and win the contracts and were promised work as sub-contractors. Such work (and income) has not eventuated and even when it has major delays in being paid have severely affected the income and cash flow of small agencies.

The result is that more and more smaller agencies are having to shut down due to cash flow problems and loss of income. And the closure of small agencies with specialist knowledge and expertise and strong local links directly impacts on the most vulnerable and disadvantaged clients.

The Third Sector, an online  publication for the sector reports that:

Eco-Actif Services, a community interest company based in Sutton, south London, and Red Kite Learning, an education and learning charity in Southwark, south London, both closed in July and blamed the government’s move to large-scale payment-by-results contracts.

Lin Gillians, chief executive of the LVSC, said: "Over the past two years, longer, larger contracts for employment programmes have been almost exclusively awarded to large private sector providers.

"The intention was that specialist voluntary and community sector providers would deliver tailored support as subcontractors – however, as time goes on we are seeing this specialist provision disappear.

"This raises enormous concerns about the quality of support available to the thousands of Londoners facing serious or multiple barriers to work."

The homelessness agencies the Single Homeless Project and St Mungo’s have also withdrawn from the Work Programme in recent months, citing problems with the way it is run.

Gillians said: "The government urgently needs to review the impact of this commissioning model on disadvantaged job seekers and special employment providers before more damage is done.

"This isn't about blaming the Work Programme or prime contractors – it's about providing appropriate support to give everyone a fair chance to work."

Brendan Tarring, who founded RKL 25 years ago, said: "The Department for Work and Pensions needs to reassess its one-size-fits-all mentality and acknowledge that individually tailored employment support for vulnerable jobseekers is best delivered by innovative mid-sized charitable organisations."

A crises parly caused by decades of market driven reform

photo courtesy of ABC News and Micaela Rehle, file photo Reuters)

The crises in the aged care sector is indicative of what lies ahead for the human and communty service sector more broadly.

It is the culmination of 2 decades of market driven reform in which the provision of care and the delivery of human services is marketized, privatized and corporatized.

The report below is from ABC News:

The aged care sector in WA says nursing homes are sacking staff and cutting services in a bid to stay viable, following an overhaul of Commonwealth funding.

Providers predict they will receive up to $24,000 less for each elderly person in their care, under the new funding arrangements.

The head of Aged and Community Services WA, Stephen Kobelke, will attend crisis talks with dozens of stakeholders today.

He says the cuts have put pressure on an industry already struggling to cope.

"Is it sustainable to remain in residential aged care?

"They're the things they'll start to look at; WA providers are deeply concerned about their ability to operate, or in fact their desire to do so.

"They want to look after older people but they've got to have the tools."

Mr Kobelke warns companies have no choice but to cut services and staff.

"Rural providers have already needed to start some sort of downsizing," he said.

Mr Kobelke says the industry is already doing it tough thanks to WA's workforce shortages, building costs and isolation.

The demise of small local communty run third sector agencies

What this piece describes in the UK is precisely what many of us see happening here in Western Australia- the demise of small locally run and locally driven not- for- profit organisations that have unparalleled local knowledge and expertise in their specialist field and that provide services to high-need individuals at the local level.

The evidence is growing that the current agenda of marketisation, corporatization and service reform being imposed across the human and communty services sector by both Federal and State Governments and increasingly supported and adopted by the bigger agencies threatens the existence of small locally run and locally focused agencies.

And this trend is particularly bad news for the people who rely on the services provided by small agencies. This UK piece by Isobel Spender is spot on when it concludes that the demise and loss of small third sector agencies will  ultimatley damage our society and the vulnerable people within it.

In the piece in the Guardian about the situation in the UK Isobel Spencer writes:

The government wants a more efficient third sector: less dependent on state support, more involvement of volunteers, and better use of private finance. This may emerge in time, but it will not do so quickly enough for a small, vital group of local service-providing charities – where failure will be the norm.

The UK has more than 160,000 charities. Over half have annual incomes of less than £10,000; a few are national or international in scope and major brands in their own right. These will survive, either because their needs are small or because they have sophisticated fundraising machines.

But somewhere between them is a smaller group of charities, which are at risk of closing. They are perhaps fewer than 5,000 in number and typically have annual incomes over £100,000 and significantly less than £1m. They deliver social services into the community – and focus on the hardest-to-reach and most disadvantaged people. Moreover, their "service delivery" usually involves significant numbers of volunteers.

Unfortunately, they share another characteristic: they are overwhelmingly dependent on statutory funding, particularly local authority grants – the fastest-declining source of charity income. More than £2bn of funding will be lost from this area over the next three to four years, according to the National Council for Voluntary Organisations (NCVO).

They have often developed unparalleled expertise in their specialist areas, but their focus on providing services to high-need individuals at the local level has made them uniquely suited to, and reliant on, statutory funding. 

Charities and not "biting the hand that feeds them"

Sometimes artists and charities who take money from mining companies in Western Australia give the game away.

This story Mining Company cash creates movie making boom  appeared on the ABC TV program Stateline WA on Friday November 4 and demonstrates that the primary reason for the "philanthropic" activity of the mining industry in WA is self interest.

The message is very clear- we will sponsor you but you must not speak certain truths about the industry. In other words the mining industry buys the silence and acquiesence of those it sponsors.

Listen to the journalists and artists in the ABC story who make it very clear that with the money comes conditions and the expectation is that you must show the mining industry in a favourable light.

Show the mining industry in a less than favourable light in their eyes or speak certain truths about the industry and you can say goodbye to the sponsorship.

One interviewer put it this way:

" We can't say we want you to sponsor us but the script says you are unscrupulous swines who rape and pillage the land..... they see the first draft of the script....... they don't want the industry shown in an unfavourable light..... you don't bite the hand that feeds you".

Of course this story reflects a much larger issue- the way that the mining industry and corporations in WA are using their money and power to shape the arts and cultural industry and the charitable sector to serve their corporate interests.

This article by Rosemary Neill provides an insight into the corporate takeover of the arts and cultural industry and charitable sector in WA:

In a harbinger of this, some of the country's most powerful businesspeople have teamed up with artists and launched a new, turbo-charged arts lobby, the Chamber of Arts and Culture, aimed at developing a coherent cultural vision for WA. Among the chamber's founding members are Rio Tinto iron ore chief executive Sam Walsh, prominent arts patron and businesswoman Janet Holmes a Court, former WA Chamber of Commerce and Industry boss John Langoulant, KPMG national executive director Helen Cook and former Australia Council chairwoman Margaret Seares.

An alliance of high-powered executives -- some drawn from the blokey resources and engineering sectors -- intent on proselytising for the arts is a first not just for the West but, arguably, for the nation. Walsh says this move signifies that "the state is growing; there is a need for a more creative and vibrant community and arts and culture will help us deliver that and help us attract people. I think the stars are aligned . . . we have a unique opportunity in Perth and WA's history, building on the mining boom, to work on these things." The unfailingly courteous Rio Tinto boss says the chamber has received "very strong support" from Day and federal Arts Minister Simon Crean. He stresses it is not merely an arts lobby; that it will engage with governments, the regions, schools and untapped audiences to spread the word about culture.

The gap between Government rhetoric about civil society and the reality

The UK Cameron Coalition Government has made all sorts of policy statements about the importance of civil society and the NFP sector in contributing to the "Big Society", but the sector is being devastated by funding cuts and the privatization and outsourcing of human services and public services to corporations.

A new report publicized in the UK Independent shows that not for profits and charities are set to lose 3 billion pounds in public funding over the next 5 years.

This comes on top of research by False Economy UK, which used freedom of information requests to show that 2,000 charities in England have suffered funding cuts this year and these cuts represent just a small amount of the agencies facing funding cuts.

The gap between the rhetoric of Governments about the importance of the not- for- profit sector and civil society and the reality has never been starker and should serve as a caution to NFP's here in Australia. 

The Independent reports:

"Britain's voluntary organisations face losing almost £3bn in funding over the next five years, according to the first comprehensive report to analyse the coming impact of spending cuts on the public sector.

In a blow to David Cameron's much-trumpeted "Big Society", charities across the UK face the prospect of their funds dropping by £911m a year by 2016, and losing £2.8bn in total over the next five years, according to research by the National Council for Voluntary Organisations (NCVO) published today.

The six-month study, which looked at how cuts to central and local government over the next half decade will hit the voluntary sector, predicts that charities will lose 7.7 per cent of their current public funds by 2016 if government departments pass on their cuts proportionately. Currently, central and local government together contribute at least £11.8bn to charities each year".

A perfect storm that threatens the future of the not-for-profit sector

Australian Greens Senator Rachel Siewert spoke some truths at the National ACOSS Conference this week, warning that the NFP sector faces a "perfect storm" of coinciding forces that threaten its future.

Whilst these threats have been acknowledged and recognised before by many in the the sector, they are becoming more urgent, and as Rachel points out, there is no evidence that any of the reform proposed by the Rudd or Gillard will address them. The threats identified by Senator Siewert were:

• The Social and Community Sector Workers pay equity case before Fair Work Australia, which has received no indication that Government will deliver a matching funding boost to services. She says everyone agrees a rise in wages is needed, but the sector is unable to support it without an increase in resources.
• The introduction of the Increased Super Guarantee provision – again with no promise there will be matching funds
• The increased cost of delivering services amidst increases in power, water, rent and insurance costs
• The struggle to find workers, a situation Senator Siewert says will only grow worse as the population ages, demands on services increase and the value of community sector wages continues to erode. She says in areas of Western Australia and Queensland, the Not for Profit sector – and in particular the aged care industry – is losing staff to the mining industry. She asks how can the sector hope to hold onto underpaid staff when they can get a job earning $80,000 as a cleaner in a mining town?

As Rachel points out Federal (and State Governments) have promised plenty, but delivered little. Indeed rather than deliver 'reform' Governments continue to impose inappropriate and contradictory funding and reporting requirements and fail to address the historically high levels of underfunding. Reform is done to the sector, rather than to inappropriate government policy, practices and processes.

She concluded with this:

“The Rudd and Gillard governments have continued to promise much needed reforms for not-for-profits and community services, but so far their much-vaunted compact with the sector has failed to deliver anything by way of practical reforms to address the crisis facing the sector".

 Very true.

Victorian Government backdown on Fair pay for communty sector workers: Will the Barnett Government be next?

Once again the not-for-profit sector has been betrayed by a government that made all sorts of promises about the importance of the sector and the need to address the problems of funding shortfalls and low wage.

The newly elected Baillieu Government in Victoria has backed away from a promise made before the election to fund a pay rise for the community sector workforce should it be ordered by Fair Work Australia.

In its submission to Fair Work Australia in relation to the Equal Remuneration Case for Community and Social Sector Workers, the Victorian Baillieu Government warned of possible cuts to jobs and services if it has to fund a large pay rise for the female-dominated workforce.  The Australian Services Union brought the case before Fair Work Australia (FWA), and is seeking a pay rise for community and social sector workers – a workforce which is predominantly female. The case is based on a 2009 Queensland decision to award pay rises to such workers of up to 37 per cent over three years.

The online publication Pro Bono News reports that

....Victoria’s Not for Profit sector has reacted angrily, pointing to the election promise made by the Minister for Women’s Affairs and Community Services Mary Wooldridge to fund the pay rise even it went over the budgeted $200 million over four years.

In its submission to FWA, the Victorian Government says that that contrary to the unions’ submission, it ought not be assumed that all governments have undertaken to fully fund the unions’ claim in the event that it is granted by FWA.

It says the Victorian Government estimates that this year it will provide $1,568 million funding for SACS workers wages.

It says the pay rise sought by the union means the cost to the Victorian government of funding SACS workers will be in the range of between $700 million over 4 years (if an 18% rise is ordered) and $1,700 million over 4 years (if a 37% rise is ordered).

The submission says the Victorian Government’s public commitment of $200 million over 4 years to support the decision by FWA is consistent with their election commitment of responsible management of the State's finances, which includes maintaining an operating surplus of at least $100 million each year without pushing up debt.

The submission says depending upon the extent of any wage increase granted and the prospect that any increase in wages may not be fully funded by the Commonwealth Government, this may mean that there will be a “gap” between the rates of pay prescribed by FWA and the funding of the sector.

It says this gap may result in a reduction in services which in turn may have an impact on the numbers of positions in the sector, and / or on the hours of work available to workers employed in the sector.

The Government submission says evidence provided by Lincoln Hopper from Mission Australia demonstrates that there is a possibility that the claim, if granted in full or in part, will have adverse effects on employment, hours of work and service provision in the SACS sector.

It says Mission Australia employs 1,052 people who would be affected by an equal remuneration order, which would see the organisations salary costs rise by a total of $3.735 million per year, affecting the organisations ability to employ people and resource projects.

In a pre-election interview with VCOSS, CEO Cath Smith just a couple of days out from the 2010 Victorian State Election, Liberal member for Doncaster, Mary Wooldridge said the Liberal Government would fund the pay-rise even if it cost more than the estimated $50 million per year.

In the interview, Wooldridge said the Victorian Coalition fully supported the pay equity case, and would support the decisions of Fair Work Australia and would be passing them through in their funding arrangement.

She said the Victorian Coalition was very clear that they believed this needs to happen and that they would be funding the outcome.

The Australian Services Union says the Baillieu Government backflipped on the election promise in their submission to Fair Work Australia, stating that any unfunded increases would have to be paid for by reducing services and jobs.

ASU Assistant Branch Secretary Lisa Darmanin slammed the recent announcement, saying it is an insult to hard-working, mostly women community workers who the Minister for Community Services Mary Wooldridge promised - on the eve of the state election - that a Coalition government would value their work by funding and supporting the equal pay claim at Fair Work Australia.

Darmanin says the Baillieu Government’s submission is effectively saying that equal pay for these workers needs to be paid for by cutting services to the most disadvantaged in our community, or make those working in it work harder by reducing staff.

VCOSS CEO Cath Smith says she expects the government to honour its pre-election commitments to community sector workers.

With the Victorian State Budget to see an estimated $46 billion in transaction revenue over the next 12 months, Smith says there must be room in the budget to fund this key election promise.

The dominance of big powerful NGOs

Despite their rhetoric about the importance of the not-for profit, non-government sector, the reality is that Federal and State Government policy and funding is predominately biased towards large corporate and business oriented NGO's. 

When it comes to shaping public policy, attracting public funding or winning large contracts there is an inherent bias towards larger more influential NGO's and to certain powerful service provider interests.

As Gavin Mooney points out, in the health sector it is always the  interests and the voice of the medical profession and the powerful bodies that represent them, who dominate public policy making and shape funding distribution. Mooney points out that in current debates about the direction of primary health care policy in Australia, smaller community based health NGO's, such as the Aboriginal community controlled health sector, which has strong links into Aboriginal communities and represents and advocates for Aboriginal people, are being marginalized

This piece appeared in Crikey and we acknowledge Crikey as the source.

Are Medicare Locals Entrenching Institutional Racism

by Gavin Mooney*

A few years ago, together with two Aboriginal colleagues, I wrote about institutional racism in the Australian health care system.

In the last few months, reading some of the documentation around on the new Medicare Locals (or Primary Health Care Organisations -- PHCOs) from the Department of Health and Aging, the Minister and the Australian General Practice Network (AGPN), it is evident that today such institutional racism is alive and well.

Indeed it is being built into the future of these PHCOs. In the current discussions on primary health care for the future in this country, the Aboriginal community controlled sector and its voice are being ignored.

The concern of that sector at not being invited to be engaged adequately in deliberations about the PHCOs is reflected in a recent media release here in the west from the Aboriginal Health Council of WA. That states, for example: "We are alarmed that there has been so little effort made by the minister and the Divisions of General Practice to involve our sector."

I do not think this is sour grapes on their part. I share that view. The views of the Aboriginal community controlled sector are not being sought and not being heard by the Minister, by the department or by the AGPN.

The reason? The new PHCOs are being seen as just bigger if fewer GP Divisions, with a few bells and whistles (which have been forced to be?) added on. This is reflected in the fact that all 15 of the new PHCOs are to be GP Divisions-based and according to the recent discussion paper from the department on Medicare Locals the rest will be "largely" Divisions-based.

In her speech to the APGN Forum in Perth 10 days ago this Divisions-focus was confirmed by the Minister.

As one example (but there are many) in that speech, she stated that her department was engaging consultants "to develop a funding formula that will enable funding for Medicare Locals to be fairly distributed, taking into account the needs of different parts of Australia".

According to the Minister the only body that the government will consult "before finalising the funding formula" is … the AGPN! No others seemingly and certainly no mention of consulting the Aboriginal community controlled sector on this funding formula.

But then, as the funding formula, according to the Minister, is to take into account only differences geographically ("the needs of different parts of Australia") and there is no mention of the differing cultural needs of Australians, such as the special cultural needs of Aboriginal Australians, then maybe she feels no need to run the funding formula past the community controlled sector.

The discussion document is similarly neglectful of the community controlled sector.

Yes, it lists that sector as one of several with appropriate "skill-sets" that "complement those offered by the Divisions of General Practice Network". But where is the recognition beyond "skill-sets" of the need to embrace the cultural base of the community controlled sector? Where is the acknowledgment that AMSs already often have the breadth of primary care that Divisions currently lack and which PHCOs are being asked to embrace?

It is noteworthy that the AGPN has set out some good principles, including on equity and on Aboriginal health, in its ‘blueprint document’ on PHCOs.

It is most unfortunate, however, that when AGPN comes to the operational end of things, as in its paper on a framework for PHCOs, both equity and Aboriginal issues are sadly neglected. When push comes to shove, the principles in the AGPN blueprint document thus turn out to be empty rhetoric.

There is still time for Minister Roxon and for AGPN to think again.

There remains a wonderful opportunity to build an exciting, fair and inclusive primary care sector in Australia. This needs to start with the idea of caring for patients and their health, sharing the vision with all relevant parties, including the Aboriginal community controlled sector, and embracing more firmly both equity and the social determinants of health.

Indeed I’d like to switch the letters round and have PHCOs become COPHs -- Caring Organisations for People’s Health, even if not in name at least in principle and practice.

I suspect that is what Australian citizens want. It is just a pity they are not being asked.

*Gavin Mooney is a health economist with an honorary appointment at the University of Sydney

Lessons from the near collapse of a small NGO

Cate Steane runs a small Californian not-for-profit providing shelter for families between homelessness and a home. Twelve months ago the agency faced collapse as government funding and donations dried up, and its invested reserves disappeared during the financial crises. The agency had to confront the reality that it had run out of money and would have to close its doors. Twelve months on the agency faces a brighter and more secure future.

This situation is very familiar to many small and medium sized NGO's in Australia, for whom viability is a monthly, even weekly proposition.

On the US not-for-profit website Blue Avocado Cate has written an important piece about the strategy the agency pursued to keep the doors open.

Reading Cate's intelligent and honest piece about what not-for profits can do when facing such a crises, and drawing on my experience with small agencies, ten lessons emerge:

1. Act quickly, don't accept denial of the problems and be completely transparent and frank with all stakeholders about the depth of the crises of and what is needed to overcome it (this includes beneficiaries and service users, funders, politicians, donors). Take all stakeholders along on the difficult journey
   
2. Withhold nothing from staff and Board and make use of the diversity of opinion about how to move forward (even when management is doubtful) and acknowledge and work with the negatives.
   
3. Develop a brief Plan (and clear message) of how the agency intends to overcome the crises
4. Mobilise and act in service of the agency's core social mission which is to address social problems and meet social needs. Ensure that the social/community need that the agency exists to address is not compromised
5. Be clear about what and who the agency is there for and what has to be preserved
   
6. Explore all possible angles, including new and better ways to make use of government funding and new sources of funding and be prepared for scenarios that cannot be foreseen in the beginning
7. Keep well informed about the policy context in terms of how these may affect the agency's survival and possible opportunities
   
8. Raise funds through the agency's network of supporters and constituents who understand and support the agency's mission and values, regardless of the size of their donations (don't just pursue big donors). Corporate funding and donors is not a high priority.
   
9. Build and protect the agency's reputation for excellent services, frugal stewardship and scrupulous honesty
10. Develop and retain a strong constituency base and appeal to them to assist in a multitude of ways
    

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.

Economic Audit Commitee Report and the WA NGO sector

The Barnett Government has just released the final report of its Economic Audit Committee which was established soon after the Liberal National Government came to power. The Report "Putting the Public First: Partnering with the Community and Business to Deliver Outcomes" is available here and a summary here.

This will be a significant document for the not for profit, non-government sector in Western Australia and it will be interesting to see the sector's response over coming months. The Report proposes a radical process of privatization and outsourcing of public services to the private and not for profit sector, and the introduction of market and business practices to the delivery of public and human services. The Report has a vision to make NGO's more business like and run as social enterprises.

On the surface this will be attractive to many NGO's, particularly the larger corporate NGO's, who have long argued that they should provide more services on behalf of government, and see plenty of opportunities in the new landscape.

But there is much to be concerned about in this Report and it should be a cause for great concern, particularly among the medium sized and smaller community based NGO's who make up the bulk of human service providers in WA. A longer analysis of the Report will appear on this blog in 2010.

National Disability Insurance Scheme: Panacea or just more of the same flawed system of services and care for people with disabilities

The Rudd Government has announced that the Productivity Commission will investigate whether Australia should bring in a "no fault" governnment funded National Disability Insurance Scheme to cover the cost of care and support for people with disabilities.

The Prime Minister's overblown rhetoric was in full display when he claimed upon announcing the Inquiry that this was "a historical social reform". The Federal Parliamentary Secretary for Disabilities Bill Shorten also ratcheted up the rhetoric claiming that this was historical reform and the opportunity to replace the existing crises driven system with a new approach that addressed the needs of people with disabilities.

Regardless of the fact that initiating an Inquiry is hardly "historical social reform", there is also concern about the Productivity Commission's credentials to do this work. The Productivity Commission's mandate is to achieve economic productivity and efficiency. I am not clear how that role equips it to pursue a root and branch review of disability services.

Then there is the time frame. The Productivity Commission won't report till June 2011. Any reform that might result from the Inquiry is years away, far too late for many of the families struggling with caring for a person with a disability. A point not lost on one parent quoted in the press today.

My colleague Erik Leipoldt, who has been a disability advocate and activist for two decades, has written a number of challenging and brave pieces here and here and here on his blog questioning whether the NDIS is the vehicle for delivering significant improvements in the lives of people with disabilities and their families. Erik does not dispute the need for a no-fault disability insurance scheme, nor the need for significant reform in the funding and delivery of disability services.

His concern is that the NDIS framework, despite its best intentions, will be built on the same architecture, using the same combination of "market" frameworks and service provider dominated models that have created the currently flawed service system. He writes:

The NDIS proposal states that the disability service system was “not properly designed and structured, but has developed in an ad hoc and deeply inequitable way over several decades”. What it does not explore is where the causes for the unresponsive system lie. They are found as much in the disability industry’s values, fears and ignorance as those that shut people with disabilities out from our society. And often they are cemented in by the same managerialism and application of market forces to human wellbeing that Kevin Rudd says he is concerned about. This goes beyond tweaking or buying better quality service.

So what does NDIS propose? That its implementation will create quality service through industry-wide competition in a “a new competitive marketplace for service provision” driving” efficiency and effectiveness”.

Erik's point is that the assumption that a market and competitive paradigm can improve the lives of people with disabilities is what makes the NDIS deeply incoherent and points to its real agenda which he argues is simply more money and reducing cost.

Given the Prime Minister's announcement that the case for the NDIS will be investigated by the Productivity Commission, a body dedicated to the application of economic and market models and principles in the delivery of human services, there are good reasons to agree with Erik's analysis.

I am with Erik on this one. The not-for profit sector, including the disability services sector, have enthusiastically embraced (or not challenged in any serious way) the market and competitive models that governments have used to transform the delivery of human services and care and support services over the last two decades.

There are many reasons for this. Partly the sector has had no choice and has simply accepted and gone along with the reforms imposed on it by successive governments over 2 decades. Partly, as Vern Hughes argues in a recent piece, it is has been about the self interest of service providers who benefit from the outsourcing of public services to the sector.

Partly it has been motivated by a belief (and the hope) that these processes would improve service delivery for people. But there is no doubt, as Erik correctly points out, that there is a lack of understanding in the sector about the impact of these market and competitive models and business approaches, and an unwillingness (or inability) to seriously question and challenge the core assumptions on which the sector operates.

Erik continues:

"Money alone is not the answer, but it is a seductive one. Truths about the devalued social position of people with disabilities are expressed in numerous reports, including the recent Shut Out report from the National Disability Strategy Review, and in the feedback pages on the NDIS Plan website itself. These reports show two noteworthy things:

1. The deepest felt needs, expressed by people with disabilities, involve their social acceptance and inclusion as a valued human being;
2. Such acceptance cannot be bought, yet there is a pervasive feeling that if only enough money were available to enable any services to be available to anyone who needed it, that all would be well. A sense of relief, security and safety would result.

But we also know, re-stated by 56 per cent of submissions to the current Strategy Review report, "that services and programs act as a barrier to, rather than a facilitator of, their participation". We don’t need an NDIS that would entrench this".

To read more of Erik's views on the NDIS scheme his blog can be found here.

UK Minister diverts fund allocated for Campaigning to service delivery

More evidence from the UK about the depoliticisation of the NGO sector and the unwillingness of government to support the campaigning activities of small NGO's.

The decision by the British Minister for the Third Sector Angela Smith to abandon a 750,000 pound Campaigning Grants Program after 32 successful applicants had been told they would receive funds has generated outrage among the British voluntary (NGO) sector. The decision has breached the Labour Government's own Compact with the Voluntary sector which outlines how the public and voluntary sector will behave towards each other.

The Minister's Office of the Third Sector announced last Friday that it was diverting the funds allocated to small agencies for campaigning activities into a Hardship Fund to support NGO's providing support for disadvantaged people.

With an election not far away it appears that the Brown Government got nervous about the potential political fallout of funding campaigning and activist groups in the lead up to an election. The agencies involved had already received letters informing them of the success of their grant so the legality of the Government's decision is likely to be tested.