NEW REPORT: NOT FOR PROFIT FUNDING CRISIS

Almost nine in ten ‘Not for Profit’ organisations (87%) have no guarantee of key funding for services beyond June 2014.

The survey shows that Australia’s Not for Profit sector is in crisis with the lack of funding certainty forcing agencies to lay off staff and unable to fill vacancies.  The survey was run by Australian Council of Social Security (ACOSS) in conjunction with the Community Council for Australia (CCA) and NetBalance and distributed through Pro Bono Australia – 

“The results are indeed disturbing with only 13 per cent of organisations reporting that they have settled funding arrangements, which is impacting on their ability to keep staff and stretching services, providing vital support to the most vulnerable members of our community,” said ACOSS CEO Cassandra Goldie.

“It’s simply not good enough that within months of contracts expiring and funding drying up that so many groups remain in the dark about the viability of their service and the continuation of important community programs.

“The ongoing uncertainty is having a serious impact across the country, with service management unable to plan, and staff increasingly anxious. Valued workers are under pressure to start looking for new jobs, with many not knowing if they will be employed in just a few months. Whilst we can’t establish the exact number of clients and staff who are affected, it is clearly in the thousands.

“It’s time the Government put an end to all this uncertainty and immediately signal its ongoing commitment to funding these crucial services. Services that ACOSS is aware of that are facing this uncertainty include, employment services to unemployed young people, financial counselling for low income people in financial stress, and health services for Aboriginal and Torres Strait Island people, among others.

“Just like business, the not-for-profit sector needs the certainty of funding to drive confidence, leading to longer term planning, investments in people and operational assets to foster productivity and growth.

“In contrast the lack of confidence leads to short term planning and potential inefficiencies as uncertainty creates churn in the workforce and a lack of investment leading to low productivity and stagnation and decline. Sadly this is the current situation, and is happening at the same time that more people will need these services due to the economic down turn. It can only exacerbate the national economic picture at a time when we are trying to lift our economic fortunes.

“Australia’s 600,000 not-for-profit organisations play an enormous role in society, not only in supporting some of most disadvantaged people in our community, but also as a large and growing employer (6.8% in 1999-2000 to 8.5% in 2006-07). Our sector contributes more than $40 billion annually to gross domestic product and shouldn’t be underestimated or undervalued,” said Dr Goldie.

Key Points
248 respondents representing organisations in receipt of Commonwealth funding
87% stated that their organisation was yet to agree all their funding for July 2014
13% stated all their funding had been agreed
57% stated that less than 10% of their Commonwealth funding for July 2014 had been agreed
15% stated that less than half of their funding had been agreed – which means that almost three-quarters of respondents (72%) have less than half of their funding agreed.

Implications of funding uncertainty
62% of respondents have not extended staff contracts
34% stated that they had delayed filling staff vacancies
35% have delayed recruiting staff
38% have developed a contingency budget
13% had increased the frequency of board meetings.
12% have revised their reserves policy

Will you continue to deliver the service from July 2014?
Only 15% of organisations that had not agreed their Commonwealth funding stated that they would continue with the service after July 2014
43% were unsure
42% stated that they would not continue with the service

Of those that said that they would continue to deliver the service:
66% stated that they would use their financial reserves.
16% stated that they would secure other short-term non-government funding

What interim action can government take to reduce this uncertainty?
74% stated that Government should provide an interim funding agreement for 12 months
15% stated that Government should provide an interim funding agreement for 6 months.