NFPs call a spade a spade in response to issues paper on future of sector

The Not-for-Profit Sector Development Blueprint Issues Paper was released for public discussion in November 2023.

The paper was created by the Blueprint Expert Reference Group (BERG), established by the federal government to help “guide government reform and sector-led initiatives to better support and connect with communities.”

The issues paper attracted 163 written submissions from individuals and organisations from across the sector, which have now been synthesised in a report and published online as part of the ongoing BERG process.

In addition to receiving written responses to the issues paper, BERG members hosted three online engagement roundtables in November and December 2023, which involved 110 people from 97 sector organisations.

Key themes to emerge in response to the paper included:

• the importance of the NFP sector’s relationship with government in the context of its effectiveness and sustainability, amid broad concern that this relationship has been vexed for some time
• concerns the sector is routinely “misunderstood or not consistently seen” by governments
• a feeling that trust and mutual respect between the NFP sector and successive federal governments has been eroded
• the sector’s feeling of resignation that even though it has been the focus of multiple government inquiries over the past 30 years, government acceptance and implementation of the recommendations resulting from this work has been limited
• concern at the proliferation of short-term grants and contracts offered by governments and philanthropic organisations and the implications this has for funding certainty
• a desire for the final Blueprint report to commit to support for First Nations self-determination, community control and cultural governance.

The BERG also found that many submissions highlighted the need to improve the NFP regulatory and legal environment; broaden and simplify the deductable gift recipient (DGR) system for accessing tax-free donations; and harmonise charity laws and regulations across Australia.

Many submissions described the need to invest more in the capability and welfare of employees within the sector as urgent.

The need for significant improvements in funding and procurement to enable a more effective NFP sector was one of the most frequently cited issues.

“There was a strong consensus that fixing funding and procurement processes has major implications for the sustainability and future thriving of the sector,” the BERG consultation report said.

“Submissions noted that poor funding practices create risk for communities and people who use NFP services, drive poor employment conditions and limit workforce quality and sustainability, create inefficiencies and operational risk for NFP organisations, and suppress opportunities to innovate.”

Many NFPs reflected that public policy has a profound impact on the social, environmental, cultural and economic issues their work addresses.

“Various submissions also pointed to the substantial and novel contributions the NFP Sector makes to Australia’s wellbeing and economic productivity,” the BERG response report found.

“They reflected on the role of the sector as a major national employer, its dominance in industries with strong productivity trajectories, and its footprint and expertise in the provision of services the nation increasingly needs.”

The BERG response report noted the wide variety of sector organisations who made submissions in response to the Issues Paper.

They ranged from community, health and legal services to faith-based organisations, educational bodies, sporting, arts and cultural organisations, environmental and animal welfare organisations and philanthropic foundations.

The BERG response report described Australia’s NFP sector as a bedrock of community connection, support, action, and cohesion, the largest employer outside government and a critical part of the nation’s social and economic fabric.

It noted that while submissions contained many examples of sector-led ingenuity, leadership, data insights and responsiveness to the needs of the community, they also offered reflections on the effects of ingrained practices that perpetuate inequities, both within the sector and for the people and communities it serves.

“Despite the innovation and intent alive within the Sector, the broad focus of submissions was on the critical and urgent issues that hinge on regulatory improvements, reasonable investment and different ways of working between sector organisations and communities, and between the sector and governments.

“In a sector with this large a social and economic footprint, this is not only a source of concern for those who consciously care about it, but a risk for the nation’s wellbeing and prosperity.”

The report also lamented that many of the issues raised in response to the current Issues Paper mirror those that have been documented in past inquiries but left unaddressed.

“It is sadly notable that, with minor differences reflecting the current historic moment, the key priorities and themes articulated in these submissions mirror those in the 2010 consultation report for a National Compact between the Australian Government and Third Sector (Commonwealth of Australia, 2010).

“As widely observed in submissions and detailed by [Professor Myles] McGregor Lowndes (2023), this is but one of multiple consultations and formal inquiries, both recently and over the past 30 years in which charities and the wider NFP Sector have shared core challenges that require government actions and wider political commitments.”

The BERG recommended that submissions to the Issues Paper be retained and used as further evidence to support the implementation of the final Blueprint report, which is due to be delivered to the federal government soon.