23/05/2016 - 15:07

Conversation needed on consolidation

23/05/2016 - 15:07


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The not-for-profit sector and those it assists could benefit if inefficiencies in the system were addressed.

Conversation needed on consolidation
The NFP sector constantly needs to adapt to help those most in need.

The not-for-profit sector and those it assists could benefit if inefficiencies in the system were addressed.

I’ve been involved in the not-for-profit sector for 40 years, and over that time I’ve seen hundreds of successful programs, thousands of people helped and millions of dollars spent.

I’ve seen huge changes over that time, but I can honestly say that the world has never moved faster than it is right now. Things are changing rapidly, and while the not-for-profit sector continues to adapt and change, more needs to be done to help even more people.

As wonderful and well intentioned as the sector is, like anything, it’s not perfect, and I would love the sector to collaborate even more than it currently does to make improvements for the benefit of all those we seek to serve, support and empower.

At the centre of my concerns is the fact that, despite all the good people working in the sector with the best of intentions, despite all the wonderful programs, despite a shift in how we deliver those programs, despite millions of dollars spent and thousands of hours dedicated – the cycles of disadvantage are not being broken.

In fact, disadvantage in many parts of our community is becoming more entrenched. Despite all this effort, many of the social indicators are going the wrong way. Demand is greater and need is increasing.

I think the sector needs to do even more to examine the elements of our system that are not working as efficiently as they could so that we can not only meet that demand, but over time, decrease it and have greater impact than we currently do.

The most recent figures from the Australian Charities and Not-for-profits Commission put the number of charities in Australia at

54,000. That’s 54,000 sets of overheads and infrastructures, 54,000 groups of staff, 54,000 organisations competing in a crowded marketplace. The number of organisations and the way in which the sector is structured are creating many of the inefficiencies in the system.

There are opportunities and ways to streamline and strip out inefficiencies in our system in order to help more people. Instead of having hundreds of peak bodies, perhaps they could come together and design a new system that addresses need without unnecessary duplication and competition (I say ‘unnecessary’ because at times there is justification for both some duplication and some competition).

I think we also need to have more conversation within the sector about whether the number of NFPs needs to be consolidated. And by consolidation, I do not simply mean mergers and acquisitions, where big organisations consume smaller ones.

I’m talking for example about NFPs coming together under one umbrella; sharing resources, decreasing overheads, redirecting funding and resources to front line services, while still maintaining important characteristics such as their pre-existing brands and the provision of local services to local communities by local people.

The recent introduction of a greater market for the provision of human services in this country will inevitably lead to the consolidation of the sector.

There are signs of this already. Organisations and community groups have a choice. They can either wait for this new market to impact on their viability or they can proactively enter into conversations with other organisations.

Many other things could be done in the sector to create a more inclusive system that reaches out to more people. Some of these include: better engaging communities to find solutions; investing in communities as well as individuals; addressing causal, structural and systemic issues; focusing on early intervention; investing in longer-term solutions; and focusing on the sustainability of services rather than organisations.

Government, as a main funder of NFPs, also has a role to play. It needs to review its currently siloed and fragmented policies, as well as contracting and funding arrangements, and look to more integrated and coordinated approaches. More can be done to reduce the burden of administrative red tape on organisations.

While some of this thinking is not popular, I truly believe that if the sector can continue to come together and discuss these issues, then it can move forward and help build an even better state for all Western Australians.

Chris Hall

CEO, MercyCare


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