The elephant in the funding room: You can’t build a strong, effective charity sector 12 months at a time

First, self-preservation. Charities and NFPs are reluctant to criticise the government departments that fund them, for fear of causing offence or jeopardising future grants. You don't bite the hand that feeds you, especially when that hand controls whether you can pay the staff next month.

Second, secrecy by design. Governments are not falling over themselves to make grant program details public, let alone enable them to be included in broader databases. Piecing together any real analysis of government funding of our sector takes serious skill, time and effort, and even then, what you find will be full of gaps and limitations.

Third, a research vacuum. There's remarkably little sector-wide analysis of anything affecting charities and NFPs. We don't have a deep bench of academic researchers focused on this area, and our peak bodies are stretched too thin to commission the complex studies that would actually shed light on it.

Put those three together, and it's no mystery why our biggest funding relationship remains largely unaccountable.

But this week, I managed to see some actual figures about government contracting, and I found them compelling.

The figures came from an analysis of 351,891 Commonwealth grants notices (GrantConnect December 2019 to July 2026), 32,184 procurement contracts (AusTender), and 15,971 charities holding 169,313 measurable-term agreements. While this data set doesn't capture state and territory grants or every other funding stream in our sector, it does cover a substantial share of grant- and tender-based Commonwealth funding – enough to draw a clear picture. Credit here to the team of volunteer actuaries who identified this data set and ran the initial analysis; CCA is grateful for their work.

One finding immediately jumped out at me. The median government agreement term across this data set is just 12 months. Nearly two-thirds of agreements – 64 per cent – run for 18 months or less. A small number of larger grants stretch longer, but they're the exception, not the rule. The other critical factor here is that the length of contract hasn’t changed over the past six years.

Short-term funding like this isn't just inconvenient – it's setting our sector up to fail.

Consider the imbalance. Government regulates and credentials charities and NFPs. Government sets the dollar amounts and the terms of every agreement. Government writes the reporting and compliance rules. Government dictates minimum employment conditions for staff and credentialing requirements for volunteers. Government decides how much transparency and disclosure applies – to itself and to the charities it funds – and government designs the evaluation and review process on top of everything else.

And the charity or NFP? It carries all the risks associated with actually delivering the program on the ground – and the even larger risk that the funding for the program may or may not be cut within 12 months.

Then there's the additional power play used by too many governments: there is no requirement, anywhere, for government or its agencies to give notice before ending or renewing an agreement. Charities can learn that funding for a program is ending days before the contract expires. In some cases, the notification arrives after the contract has already ended.

Employment regulations are a good example of this power imbalance. The same government that provides a median grant of only 12 months has told charities and NFPs that any staff who have received two employment contracts must be made permanent to continue their employment – even if the charity has less than 12 months of funding for their positions. This ignores the reality that regardless of whether a staff member is permanent or contracted or casual, when there’s no money to pay them, there’s no money to pay them.

Every week, thousands of charity workers wake up wondering whether they'll still have a job next month – not because their organisations want a revolving door of temporary staff, but because the federal government and other funders keep handing them the same broken deal: short-term contracts, over and over, with no end in sight.

I know there are places within the Commonwealth government where people are working to empower charities to achieve shared policy goals, but these places continue to be exceptional. And they tend to come and go quite quickly.

Charities and NFPs can't build capacity or effectiveness, invest in staff and technology, establish quality infrastructure, or embed programs in communities while so many are locked into uncertain 12-month funding cycles.

No sector grows on a foundation that resets every year.

And no sector grows without understanding and addressing critical areas like the terms of funding agreements, their income generation, and who is employed in the sector and on what basis.

We can work more effectively in our collective advocacy to drive reform, over time, especially if we can get basic data sets and accountabilities in place. The Community Council for Australia and others are working to build a stronger evidence base. But the figures I’ve seen this week reinforce to me just how much work we have to do if we’re going to shift the way governments treat our sector.

David Crosbie has been CEO of the Community Council for Australia for the past decade and has spent more than a quarter of a century leading significant not-for-profit organisations, including the Mental Health Council of Australia, the Alcohol and Other Drugs Council of Australia, and Odyssey House Victoria.