Need for "Institutional Innovations" in the Third Sector

A visiting expert on civil society and social investment has called for a number of policy initiatives to help the Third Sector weather the current financial crisis and prepare for any future ones.

Visiting Professor Helmut Anheier, co-founder and Director of the Heidelberg University’s Centre for Social Investment in Germany took part in the recent Conference on Modernising Charity Law held at QUT and contributed to a three continent discussion about the global economic crisis and the Third Sector.

Professor Anheier told the group that countries need to explore institutional innovations for the Not for profit field and high among these initiatives should be a dedicated financial institution for Not for Profit organisations that would include insurance funds, forms of capital market with social investment, including smart public/private partnerships with profit making functions and reserve options still in them.

Prof Anheier says there should be a public trust fund for Not for Profits to smooth eligible organisations over fiscal uncertainties and budget shortfalls.

He says there are many different ways in which to build such a trust fund; it could be tax-based, it could be based on the community foundation model, but what is needed is a fiscal cushion for Not for Profit organisations, particularly in an era where government is going to do less.

He says irrespective of the various stimulus packages that have been discussed around the world, they are a short term effort only and in the next 3 to 7 years it is very likely that there will be less government funding coming to the sector.

He says the Sector also needs to build it’s own reserve and Not for Profits need to re-discover, if applicable, the membership base and mobilise them politically for advocacy purposes, and also economically for income generation.

Prof Anheier says that if there is one lesson to be learnt from this crisis it is that the Not for Profit sector has to take its advocacy role much more seriously.

Australian Government Productivity Commissioner, Robert Fitzgerald also took part in the discussion saying now is not a time for panic, but it is a time for careful consideration and strategic decisions.

Fitzgerald says strange as it may seem, now is the very time that the sector has to get closer to funders, donors, clients and the community; irrespective of the immediate return of that effort.

He says this is exactly the time that those who believe in the sector will judge it most harshly and it will be the time at which you cement the relationships without necessarily achieving return in the short term or you will lose those relationships to other organisations.

he says so part of this drive to efficiency and effectiveness is a drive to a renewal of relationships and a security of those relationships if we are in fact to come out of the downturn or the crisis in a stronger position.

He says now is the time to be very active with the nine governments of Australia, to voice concerns, but also to put forward solutions and now ow is not a time for the sector to divide.

Fitzgerald says the greatest mistakes are that there are some agencies that see the government dollar as their saviour and instead of actually fine-tuning their missions, fine tuning their values, fine tuning their objectives, they are seeking the dollar as a means of survival and it is a road to ruin.

The full discussion can be downloaded via Podcast from QUTs Australian Centre for Philanthropy and Nonprofit Studies (CPNS) at
www.bus.qut.edu/research/cpns/podcast