NFP Funding Reaches Crisis Point

Nine out of 10 Not for Profit organisations have no guarantee of Federal Government funding for key services beyond June this year and more than 60 per cent are having to let staff go due to the uncertainty, results from a social sector survey have revealed.

The survey, run by Australian Council of Social Services (ACOSS) in conjunction with the Community Council for Australia (CCA) and Net Balance, investigated the impact of the current uncertainty surrounding Federal Government funding in the lead-up to the May Budget.

Its results revealed only 13 per cent of organisations reported having all their funding agreed.

More than half of the respondents (57 per cent) stated that less than 10 per cent of their Commonwealth funding beyond July 2014 had been agreed. A further 15 per cent stated that less than half of their funding had been agreed – which means that almost three-quarters of respondents (72 per cent) have less than half of their funding agreed.

It also showed that due to government funding not being agreed upon, a third of the respondents had delayed filling staff vacancies.

ACOSS Chief Executive Officer Dr Cassandra Goldie said the survey findings confirmed ACOSS’s deepest concerns for vital community services and helped to put the evidence before the Government.

“When you see that over 60 per cent of organisations are no longer renewing staff contracts, it shows how dire the impact of this really is,” Dr Goldie said.

“The current uncertainty unfairly relies on the goodwill and dedication of the people in the community sector who have been carrying the risk for far too long.”

She said the services at most risk included basic financial counselling for low-income earners in financial stress and employment services to unemployed young people, and called on the Government to confirm that these services were not in the firing line.

“We also want the the same funding rollover for 12 months as done with the National Partnership Agreement on Housing,” she said.

“Every day that goes by good staff are making the decision to leave these services … it’s a massive loss of skills for these services.”

The online survey was completed by 248 respondents representing organisations that receive Federal Government funding.

Only 15 per cent of respondents said they would continue services after July even if Federal funding was not agreed. Forty-three per cent were unsure and 42 per cent stated they would not continue their service.

Of those that said they would continue to deliver the service, 66 per cent stated they would use their financial reserves.

CCA Chief Executive Officer David Crosbie said the results showed a real disrespect for Not for Profit organisations and what they do.

“I find it incredible that in 2014 we are still expecting Not for Profit organisations with government funding to operate with less than three months notice,” Crosbie said. “If it was any other major sector, it wouldn’t have gotten to this situation.

“Organisations need some level of certainty if they are to operate in an effective way.”

Crosbie also called on the Government for a 12-month rollover of funding to allow organisations to have some breathing space while they make a decision.

“By delaying a decision on funding, you are having an negative impact on employment and retaining staff,” he said. “The staffing alone should be a major concern for Government.”

Key survey results:

• 248 respondents were from organisations that receive Federal funding;
• 87 per cent stated that their organisation was yet to agree all their funding for July 2014;
• 13 per cent stated all their funding had been agreed;
• 57 per cent stated that less than 10 per cent of their Federal funding for July 2014 had been agreed;
• 15 per cent stated that less than half of their funding had been agreed – which means that almost three-quarters of respondents (72 per cent) have less than half of their funding agreed.

Implications of funding uncertainty

• 62 per cent of respondents have not extended staff contracts;
• 34 per cent stated that they had delayed filling staff vacancies;
• 35 per cent have delayed recruiting staff;
• 38 per cent have developed a contingency budget;
• 13 per cent had increased the frequency of board meetings;
• 12 per cent have revised their reserves policy.

Will you continue to deliver the service from July 2014?

• Only 15 per cent of organisations that had not agreed their Commonwealth funding stated that they would continue with the service after July 2014;
• 43 per cent were unsure;
• 42 per cent stated that they would not continue with the service.

Of those that said that they would continue to deliver the service:

• 66 per cent stated that they would use their financial reserves;
• 16 per cent stated that they would secure other short-term non-government funding.

What interim action can Government take to reduce this uncertainty?

• 74 per cent stated that Government should provide an interim funding agreement for 12 months;
• 15 per cent stated that Government should provide an interim funding agreement for six months.