Charities in Crisis of Uncertainty
Tuesday, 11th March 2014 at 10:40 am
Not for Profit peak body, the Community Council for Australia, has called on the Federal Government to end what it says is a crisis of uncertainty and provide a six-month moratorium for program cuts to charities and Not for Profits.
The CCA says in areas such as health, welfare, child support, youth, housing, employment and volunteering, hundreds of millions of dollars of government programs and services are under review. This leaves many charities not knowing whether they will be able to provide programs and services beyond June.
CCA CEO David Crosbie says it is ridiculous to expect charities and Not for Profits to operate effectively on three months’ notice.
“Hundreds of millions of dollars of government programs are on hold or under review. The situation has reached a crisis point for many Not for Profit organisations across Australia, but most are afraid to speak out in case it jeopardises their future funding,” Crosbie said.
“You cannot run a successful charity or Not for Profit on three months’ notice. There are employment contracts to sign, leases on buildings and cars and IT services. If you don’t know whether you will exist in June, how can you run your business today?”
Crosbie cited one agency with program expenditure of more than $30 million that does not know if they will receive government funding beyond June.
“The agency’s income next financial year could be $30 million, $20 million, or $10 million; but they will not know until announcements are made about their program funding,” he said.
“The agency has frozen all staffing and forward commitments, but existing staff contracts are due for renewal as are leases on their buildings, cars and IT services. Some staff were looking for more stable employment options elsewhere.”
Crosbie acknowledged the current situation was partly about the budget cycle and the need to make budget savings, but said that was not a reason to create uncertainty.
“It is clearly up to the government which programs they choose to support or cut, but charities need some time to adjust if tens of millions of dollars are going to be taken out of their budgets,” he said.
“This is not just about the organisations or their staff, it is about services to our communities.
“Providing a six-month moratorium on program cuts will give charities a chance to plan, even if they are going to be closing programs and services.
“The car industry announced cuts years in advance – we are asking for a 6 month grace period.”
Crosbie also acknowledged that some of the delay may be about improving funding processes.
“We understand the government is working to reduce red tape by extending some program funding cycles from three to five years. While we strongly support this measure, the current uncertainty is undermining the benefits of this longer term approach,” he said.
“The one constant refrain from business in terms of building confidence and productivity is to call for certainty. Is it surprising that the charities and Not for Profit sector want the same?”
According to Crosbie the current funding uncertainty is being exacerbated by regulatory uncertainty with moves to change the definition of charity and disband the charities regulator.
“All the changes and uncertainty make running a charity in Australia at the moment an even more challenging role – we could do with some respite," he said.
“Charities and Not for Profits are a vital part of our economy and our lives. They employ over 1 million Australians, turn over close to $100 billion, and hold our communities together in good times and bad. They should not be treated as though the needs of their organisations do not count.
“We are in a situation now where many charity workers would have more secure jobs if they worked in the car industry.
“The one thing business most requests from government is to build confidence, investment and productivity is certainty. The Not for Profit sector needs certainty as well if it is to operate effectively, invest in its future and become more productive.”