Call for change: Rethinking governance in Australia’s not-for-profit sector

Abstract

This article argues that Australian community organisations must transition towards a new governance model that provides at least partial compensation for volunteers in key governance positions. While community organisations remain a cornerstone of Australia’s social, cultural, educational and recreational life, the governance environment in which they operate has changed profoundly. Funding structures, regulatory obligations and community expectations now demand levels of expertise, time commitment and accountability that can no longer reasonably be met through unpaid volunteer leadership alone.

Traditionally governed by volunteer committees, community organisations form a vital part of the not-for-profit (NFP) sector, contributing billions of dollars to the Australian economy and delivering services largely funded by taxpayers. Yet government funding has focused overwhelmingly on service delivery, while systematically underinvesting in governance capacity. This disconnect has produced a fragile system in which volunteers, predominantly women, are expected to shoulder complex legal, financial and strategic responsibilities without adequate training, support or remuneration. The result is governance fatigue, burnout, compliance risks and, ultimately, poor value for public investment.

The article proposes a pragmatic, hybrid governance model that preserves community participation while strengthening accountability and sustainability. Key reforms proposed include targeted funding for office bearers, professionalised recruitment, subsidised governance training, shared governance support services, tiered compliance requirements and coordinated advocacy for systemic reform. Investing in professional, well-supported leadership is not an optional enhancement; it is essential to ensuring that community organisations remain viable, transparent and capable of delivering the public value for which they are funded.

What are community organisations?

If you have ever enrolled your child in a local sporting club, attended a Saturday language school, volunteered at a working bee or donated goods to an op shop, you have engaged with a community organisation. Most community organisations are not-for-profits or registered charities, governed by volunteer committees and reliant on public donations or government grants.

The Department of Social Services (DSS) defines community organisations as part of the not-for-profit sector, providing services and activities “for the benefit of the community” and characterised by governance through committees, reliance on volunteers and operation for a public or community purpose (DSS, 2024). Similarly, the Australian Charities and Not-for-profits Commission (ACNC) describes these organisations as entities operating “for a charitable purpose and for the public benefit,” governed by responsible persons such as committee members or directors (ACNC, 2024).

Typically, a community organisation consists of a board or committee and, where resources allow, a small number of paid staff. Board members are elected, usually on a voluntary basis, and are responsible for governance, strategy and oversight, while any paid staff manage day-to-day operations. In many organisations, however, no paid staff exist at all. In these cases, the full weight of both governance and operational responsibility falls on unpaid office bearers.

It is precisely this system of reliance on unpaid labour in organiational governance that warrants serious re-examination. When increasingly complex legal, financial and compliance obligations are placed on volunteers who lack sufficient time, training or institutional support, organisations become vulnerable to poor decision-making, governance failures and regulatory breaches. The question is no longer whether volunteers are willing to contribute, but whether the current governance model is fit for purpose.

Governance in the “third sector”

Community organisations sit within what is often described as Australia’s “third sector,” distinct from both government and private enterprise. Estimates of the size of this sector vary: the Department of Social Services cites approximately 300,000 NFPs, while the Centre for Public Value (2023) suggests the figure may be closer to 600,000, between 11% and 22% of all organisations in Australia.

This is not a marginal sector. Not-for-profits contribute approximately 4.8% of Australia’s gross value added, comparable to the retail sector, and deliver services that many Australians rely on daily. Meals on Wheels enables older Australians to remain at home. Community language schools sustain linguistic and cultural heritage. Sporting clubs, neighbourhood houses and cultural associations foster social cohesion and wellbeing. Volunteers make all of this possible.

Yet volunteers are not only delivering services; they are also governing organisations that manage substantial public funds. Around 51% of NFP income, approximately $100 billion annually, comes from government sources, representing roughly 16% of total government expenditure (ACNC, 2024; Blueprint Expert Reference Group, 2024). Despite this, funding models rarely include meaningful investment in governance capability.

This is the core policy gap: government funds services, but not the leadership and governance systems required to deliver those services effectively, ethically and sustainably.

Is reliance on volunteer governance still sustainable?

Australia has a proud tradition of volunteering. Around one in three Australians, approximately nine million people, volunteered in the past 12 months (Volunteering Australia, 2023). However, formal volunteering through organisations has declined, from 36% in 2019 to 32.6% in 2023. At the same time, regulatory, financial and reporting requirements have intensified.

Those who volunteer in governance roles often describe the work as meaningful and deeply rewarding. Yet high attrition, burnout and governance dysfunction are increasingly common. Bookkeepers, auditors, lawyers and HR consultants working with community organisations regularly encounter financial mismanagement, unclear accountability, unresolved conflicts and compliance failures, not because volunteers lack commitment, but because the system expects too much of them without adequate support.

The consequences are not merely internal. Poor governance undermines service quality, increases the risk of grant failure and erodes public trust. When organisations collapse or are forced to lose funding due to compliance breaches, the cost is borne not only by volunteers, but by communities and taxpayers.

When volunteering becomes unsustainable

The era in which community organisations could operate with minimal compliance and informal governance has long passed. Today, NFPs must meet obligations imposed by the ACNC, ATO, Consumer Affairs, funding bodies, insurers and regulators. They must demonstrate financial probity, risk management capability, child safety compliance, data protection and workplace safety, often while competing for short-term grants that rarely cover true operating costs.

Office bearer roles - president, vice-president, secretary and treasurer - now routinely demand between 7 and 20 hours per week. These roles involve strategic leadership, regulatory compliance, financial oversight, conflict resolution, advocacy, grant management and public representation. The complexity of these responsibilities often becomes fully apparent only after a volunteer has been elected, at which point stepping away is not an option for operational or ethical reasons.

In many cases, one or two highly capable individuals carry the bulk of the workload - an octopus-like juggling of responsibilities with limited support. For some, the only way to cope is to reduce paid employment or step away from the workforce entirely. I have personally experienced this trajectory, as have many others across the sector.

This reality raises an uncomfortable but necessary question: at what point does reliance on unpaid labour in high-responsibility roles become inequitable, exploitative and unsustainable?

“But you’ve volunteered!”

Critics may argue that remuneration undermines the spirit of volunteering or risks “corporatising” community organisations. Others contend that volunteers choose these roles freely and should accept the associated burdens.

These objections overlook a crucial distinction. Short-term, low-risk volunteering remains invaluable and should always be encouraged. However, governance roles involving statutory duties, fiduciary responsibility and legal liability are fundamentally different. These roles are not casual acts of goodwill; they are positions of responsibility that require sustained expertise, availability and accountability.

Recognising this reality does not devalue volunteering. In fact, it protects it. By professionalising and supporting governance roles, organisations can retain leaders, reduce burnout, improve decision-making and create space for volunteers to contribute meaningfully without sacrificing their livelihoods or wellbeing.

A way forward

Reform does not require abandoning community governance. It requires modernising it. A series of achievable, interrelated reforms could significantly strengthen the sector:

1. Targeted funding for office bearers through competitive grants that provide stipends for high-responsibility roles.
2. Professionalised recruitment processes, including skills-based selection, detailed and transparent role descriptions.
3. Subsidised governance training in finance, compliance, risk management and leadership.
4. Shared governance support programs, providing access to professional services for small organisations.
5. Tiered compliance requirements that align reporting obligations with organisational size and risk.
6. Stronger partnerships with local councils and government departments, including mentoring and practical support.
7. Succession planning and leadership pathways to ensure continuity and renewal.
8. Subsidised digital tools and IT systems to reduce administrative burden.
9. Statewide and national advocacy for systemic reform in funding and compliance frameworks.

Conclusion

Community organisations deliver immense public value and manage significant public investment, and expecting unpaid volunteers to carry the full weight of modern governance is no longer reasonable, equitable or economically sound. Investing in professional, well-supported leadership is not a threat to community values; it is a safeguard for them.

If governments are serious about accountability, service quality and value for money, they can no longer afford to ignore how community organisations are governed or the silent heroes who carry this responsibility at enormous personal and professional cost.

About the author

Oksana King, PhD

Originally a teacher, university lecturer, teacher trainer and academic, Oksana transitioned into community and education leadership about a decade ago. She currently serves as Vice President of Community Languages Victoria and holds governance roles in two other community organisations, driven by a strong commitment to helping communities achieve their goals through effective leadership. Oksana advises boards and government bodies on governance, community capacity building, strategic planning, and sustainable service delivery. She also contributes to public and professional conversations on education, migration and community governance through panel discussions, interviews and publications.

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