Investing in People Who Make a Difference

Charities need to be independent, but that does not mean they should be cut adrift by government to fend on their own, writes CCA CEO David Crosbie, in Pro Bono News.

Investing in People Who Make a Difference, Pro Bono News, 31 January 2019

“In the modern world it is simply not possible to have a dynamic and vibrant society and economy without a dynamic and vibrant voluntary sector… Wise governments respect the crucial independence of the sector. But government has an important role to play in providing support.”

– UK Prime Minister Tony Blair, foreword to the report Private Action, Public Benefit A Review of Charities and the Wider Not-For-Profit Sector, first published in 2002.

I have always liked the Tony Blair approach to charities – charities need to be independent, but that does not mean they should be cut adrift to fend on their own. They also need to be supported by government to be the best they can.

There has been a lot of talk in recent years about the capacity of the charities sector to advocate on issues of importance to the communities they serve.

Given the overt political push from vested interests to diminish the voice of charities, particularly on issues that may impact the profitability of major corporates, the sustained attack on the independence of charities has demanded attention.

It is disappointing, but not surprising, that a number of our politicians have supported this campaign. Thanks to the ongoing work of many within the charities sector, the independence of charities in Australia is still relatively strong – although there are no grounds for complacency.

What has attracted a lot less attention is the importance of the relationships between the charities sector and governments across Australia, and particularly the need for appropriate levels of support.

According to the ACNC data, charities in Australia receive over $60 billion in government grants. Further government funding is provided through payment to charities for services to funded clients and communities.

Most of this funding is relatively short term – less than three years. In many cases, the funding provided barely covers the cost of the deliverables stipulated in government contracts. Some government contracts require cross subsidisation or underwriting from the charity.

Within this context, investment in sector capacity has been miniscule as a percentage of total sector turnover. Of particular concern is the failure to provide adequate professional development opportunities across our sector.

I have long argued that the charities sector is mostly about the people that work and volunteer in the sector – much more so than the money or the processes. It is people that matter, their relationships, their values. So why do we not invest in our people?

We lack the actual figures (another area for more research across the sector), but what little research has been done in the area suggests: “Insufficient financial and structural support prevent the Australian NFP sector and its people from engaging with more professional development. Smaller NFP organisations appear particularly prone to financial challenges, while larger NFPs are challenged by the time and support required to offer training. Thirty-three per cent of NFP executives have no access to a designated training budget.” (Dr Ramon Wenzel – Learning for Purpose Researching the Social Return on Education and Training in the Australian Not-for-Profit Sector.)

There are many good reasons for governments across Australia to invest more in the capacity of the charities sector and particularly in the staff and volunteers that make or break government funded services.

It is beyond contention that quality, productivity, sustainability, and effectiveness are all significantly enhanced when there are well-trained, skilled and experienced staff and volunteers engaged in service provision, leadership and governance.

The Productivity Commission report into the Australian charities sector devoted a whole chapter to the not-for-profit workforce.

It identified a lack of career paths and training opportunities, and called for better sector workforce planning and training noting: “NFPs in the community services sector appear to experience the greatest challenges in attracting and retaining employees and volunteers. Addressing these challenges is vital to enhancing the efficiency and effectiveness of these NFPs, especially those delivering government funded community services.”

Despite the overwhelming case for a significant investment in sector capacity, there has only been limited ad-hoc one-off investments made by governments across Australia to support increased sector capacity, particularly training and development. This is a very real concern for the future of the sector.

The CCA Draft Pre-Budget Submission (currently being finalised with CCA members) is calling for a three per cent levy to be applied to government funding of charities and not-for-profits.

This measure would enable more appropriate investment into sector capacity building including; training and development, research, and uptake of technology.

CCA is keen to work with central agencies (treasury and finance) to examine how such a levy might work across the various government departments, but the fundamental requirement would be that departments investing hundreds of millions of dollars in program delivery through charities and not for profits would have to demonstrate that they are also investing in the capacity of the sector to provide the best possible services. In practice, this means offering government funded charities and not for profits increased support for capacity building, either within grant programs or as an additional investment.

Being independent is critical to the work of charities across Australia. Having the capacity to train and retain committed staff and volunteers is also critical. It is time we invested more in the people that make a difference in our communities, the charities and not-for-profit sector workforce.

Governments would do well to heed the advice of a previous UK prime minister; respect the independence of charities, but also offer genuine support to enable charities and the communities they serve to flourish.

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