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Is the Coalition offering an alternative Nirvana?

9 May 2013 at 11:31 am
Staff Reporter
The Coalition platform is offering its own version of Not for Profit Nirvana and whilst this is most attractive, the sector is well familiar with the risks that a transfer of power brings, says Not for Profit consultants, Jane Bradfield and Julie Nyland.

Staff Reporter | 9 May 2013 at 11:31 am


Is the Coalition offering an alternative Nirvana?
9 May 2013 at 11:31 am

The Coalition platform is offering its own version of Not for Profit Nirvana and whilst this is most attractive, the sector is well familiar with the risks that a transfer of power brings, says Not for Profit consultants, Jane Bradfield and Julie Nyland.

The current government has led a reform agenda for the Not for Profit sector, with ‘red tape reduction’ as one of its main objectives. Most of the attention (and funding) for the reform agenda has gone to the establishment of the Australian Charities and Not-for-profits Commission (ACNC), although the reform agenda also includes streamlined taxation, regulation and funding administration.

Back in May 2010, the Chair of the Not-for-profit Sector Reform Council predicted that the reform agenda, with the ACNC as its centrepiece, would deliver ‘a Nirvana’ for the Not for Profit (NFP) sector.

Unfortunately, the sector is still looking out on a sea of paperwork and waiting for lifeboats to ferry them to the golden land. As Kevin Andrews argued in his recent address to the Centre for Independent Studies, the ACNC appears to have become just another regulatory requirement, adding to compliance burdens rather than streamlining them.

For many, the commitment by Andrews to transform the ACNC into a smaller body, responsible for providing a resourcing function to the sector, and to transfer regulatory responsibilities back to the ATO, ASIC and other relevant bodies, will be greeted with a sense of real relief. The commitment to transferring governance of the reformed Commission to the Not for Profit sector is likely to be even more popular.

But what else would a Coalition Government mean for the Not for Profit sector?

Putting aside that there may be some slippage between Andrews’ clarity of vision and the implementation that may happen through government bureaucracies, the intent is clearly to back off – to wind back the extent to which government treats the sector as an arm of the state. This gets to the heart of a long standing issue for human services providers in the sector that is rarely treated this directly.

Over successive governments of both persuasions, at State and Commonwealth levels, the human services NFP sector has been bound tighter and tighter to government through the funding programs that it delivers. Since the mid 1980‘s there has been a steady march away from an older form of grant based funding that ‘contributed’ to the costs of NFPs pursuing their objectives, to purchase of service contracting (POSC).

POSC locates human services NFPs as contractors delivering social programs that are essentially government designed, although many programs are fundamentally informed by the advocacy of the NFP sector.

With contracting came a multiplicity of complex reporting requirements, ‘mission drift’ as organisations respond to government priorities in their programs and activities, and government program administrators attempting to control risk by micromanaging the affairs of funded organisations.

The issue has been masked by Compacts, partnership rhetoric and other apparent collaborative arrangements between the NFP sector and government. It has been represented by the constant battles over ‘accountability’, red tape and competitive tendering.

The Coalition platform is offering its own version of NFP Nirvana – freedom from government control, respect for sector expertise and support for sector initiative (indeed, Andrews is even proposing quarantining a percentage of funding for family services for self-generated innovation).

Whilst this is most attractive, the NFP sector is well familiar with the risk that a transfer of power back to the Not for Profit sector may be accompanied by a transfer for the responsibility for raising funds, and that a government reverts to making a ‘contribution’ to the cost of services.

So there are challenges here for both the sector and for both sides of government.

For civil society to flourish in the way that Andrews envisions, and for the human services programs of governments to be delivered in effective fashion:

  • Political leaders need to be able to prevent the slippage between their policy visions and the enactment of those visions by program administrators – the reform visions for the NFP sector of the current government were equally as attractive and worthy as those of the Coalition, but there is many a slip twixt Minister and bureaucracy
  • The balance between accountability and independence needs to be recalibrated, and governments need to focus on the ends – the outcomes of services and activities – and stop trying to control the means by which NFPs produce good outcomes
  • The harnessing of financial resources needs to be effective, and any move to diversify away from government funding needs to ensure that NFPs do not simply trade in time spent on red tape into time spent on fundraising

About the authors: Jane Bradfield & Julie Nyland, Directors of BNG NGO Services Online and Bradfield Nyland Consulting.

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  • anonymous says:

    If BNG are committed to increasing productivity by reducing red tape in the NFP sector, why do they see collapsing the one independent body working to achieve this outcome as a positive? Every major review and inquiry (including the Productivity Commission), most of the major peak bodies and charitable organisations, and most leaders in the sector have recognized the long term benefits of the ACNC. Does BNG think all these people would be relieved to the see the ACNC lose its regulatory role? Do they think the ATO is the ideal lifeboat for NFPs drowning in paperwork? How can returning regulation of the NFP sector to the ATO ever be described as nirvanna? There is no quick fix to over regulation across the NFP sector, but the now 6 month old ACNC has a very clear charter and is at least beginning to head in the right direction. Returning to the ATO is like giving up!

  • Hopefully not many people misread our piece in the way that ‘anonymous’ appears to have. To clarify a few points that we were making:
    ? We were not attempting to draw any firm conclusions on the Opposition’s proposed future for the ACNC, but were highlighting the debate that exists about its impact. There are parts of the sector, for whom the way that the ACNC is implementing its role currently means a duplication in systems and effort. For these NGOs, it would be a relief to see a reduction in this duplication and (perhaps) a return to some of the regulatory systems they are used to.
    ? In the overall complexities of regulation for the sector, the ATO plays a relatively small part – and for services receiving government funding, a very minor part. The elements of regulation that the ACNC is addressing are incorporation, taxation exemption and fund raising. For a large proportion of the sector, two of these three are State or Territory requirements, so much of the ‘liferaft’ will actually depend on the capacity of the Commonwealth to negotiate uniform requirements nationally. For funded services, these reporting requirements are relatively minor and pale into insignificance against an avalanche of multiple funding contract, performance agreement and quality standards reporting requirements.
    ? The day we ever claim that a government can deliver Nirvana to the sector we’ll erase our hard drives and go home. The reference to ‘Nirvana’ relates to a claim made by the Chair of the Not-for-profit Sector Reform Council, which we thought was somewhat of an overreach, and we were simply raising the question of whether Kevin Andrews’ piece was offering an equivalent or better future for the sector.
    ? The focus of our piece was on Andrews’ broader vision which raises a number of important questions for the sector about its relationship to government funding, and some questions for Andrews himself in terms of effective delivery, should the Opposition win Government.


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