Terms of engagement – Time for a new relationship with government?

We have an opportunity as we move through the COVID-19 pandemic to re-establish the kinds of relationships we think are needed between governments and charities, writes David Crosbie.

Relationships are changing as a consequence of COVID-19. For charities, one of the most important relationships is with governments. Many charities rely heavily on government support – over 40 per cent of all funding to the charities sector is provided by governments. 

Over the past few months we have seen an unprecedented level of engagement between governments and charities. There are a growing number of examples of governments not only listening and understanding the challenges charities are facing, but also providing flexibility and support to enable charities to keep operating. Of particular note is the federal government decision to reduce the JobKeeper threshold from 30 per cent to 15 per cent and allow charities to exclude government revenue in calculating their likely loss. Thousands of jobs in the charities sector have been maintained through JobKeeper. This has reduced unemployment, ensured more charities remain viable, and enabled vital services to be maintained within many communities.

Part of the drive for increased cooperation between governments and charities is the theme that we are all in this together – not just governments or business, but whole communities. The shared focus of both governments and charities has not just been on the economy or vested interests, but on the well-being of all Australians. How can we help in this time of crisis? Within this context, the critical roles played by charities at both an economic and social level have been readily acknowledged. While not every part of the charities sector has benefited, the relationship between governments and charities clearly changed, at least in the short term. 

As governments begin focusing more on economic rebuilding, the relationships with charities will face another set of challenges. Already, as we approach the end of the financial year, an emerging issue is whether charities will be able to roll over unspent government funds into the next financial year. Many charities have not been able to fully expend their allocated government funding due to COVID-19 restrictions. 

CCA knows of some cases where approval to roll over unspent funds into the next financial year was provided by a federal government department within 24 hours. CCA are also aware that some government departments and some contract administration staff have taken a very different approach, establishing time consuming and difficult processes for charities seeking to gain approval for rollovers.

In response to a number of requests from charities caught up in this issue, the Charities Crisis Cabinet developed the following set of core principles:

Charities and not for profits that have been unable to spend allocated government funds and complete contracted activities as a result of the impact of COVID-19 should be given due consideration in being able to retain the unspent funds provided that:

• specified contracted activities can be completed within an agreed period of up to 12 months;
• the organisation has a good performance record of fulfilling government contracts and expending government funds; and
• where variations are required to contracted activities, the changes do not compromise the initial policy intent of those activities.

It is exceedingly difficult to accurately monitor the relationships between governments and charities – especially given that most contract variations are negotiated on an individual agency level. In these negotiations, charities can feel isolated and relatively powerless. Having an agreed set of principles charities can cite may be important in strengthening their position in government negotiations.

Sometimes when we talk about government relationships and the charities sector it is useful to think in terms of the kind of expectations we might have, the principles we would normally expect to apply.

Ten years ago government / charity relationship principles were the subject of an extensive consultation across both the charities sector and the government. The result was the National Compact: working together.

While the current government disbanded the National Compact infrastructure, including individual National Compact Champions within federal government departments, it does make for interesting reading at a time of shifting relationships between governments and charities.

 The National Compact: working together included eight priorities for action:

1. Document and promote the value and contribution of the sector.
2. Protect the sector’s right to advocacy irrespective of any funding relationship that might exist.
3. Recognise sector diversity in consultation processes and sector development initiatives.
4. Improve information sharing including greater access to publicly funded research and data.
5. Reduce red tape and streamline reporting.
6. Simplify and improve consistency of financial arrangements including across state and federal jurisdictions.
7. Act to improve paid and unpaid workforce issues.
8. Improve funding and procurement processes.

Times have changed, but it is hard to argue that any of these eight priorities are not important to the future of the charities sector. I also think these priorities lack one very important touchstone principle: The relationship between governments and charities is not just about the interests of charities or the interests of governments, but about supporting and strengthening the communities we serve.

One of the big lessons we can learn through the COVID-19 pandemic is that a shared focus on serving our communities enables governments and charities to more effectively work together, supporting real gains in the economic and social well-being of Australians. 

We have an opportunity as we move through the COVID-19 pandemic to re-establish the kinds of relationships we think are needed between governments and charities, to enact the kinds of principles and priorities we think are important. 

If we take this unique chance to re-define our relationship with government, the principle of shared commitment to improving outcomes for our communities must be the starting point and the end point. It should not take a crisis to make us all aware of this shared priority.

Note: As part of our efforts to strengthen relationships with governments, Pro Bono Australia, CCA and the Charities Crisis Cabinet need your assistance in providing feedback to us about your experiences. Please complete this very brief survey about government funding and JobKeeper. You will be helping us better understand the current situation and inform our advocacy to governments.