Third Sector Input to Productivity Commission Inquiry

The Productivity Commission’s investigation into the contribution of the Not for Profit sector has received 152 submissions, with a large number of organisations questioning the focus of the study and the effectiveness of more government studies into the sector. In March the Rudd Government asked the Productivity Commission to undertake a commissioned study on the contributions of the Australian Not for Profit sector. The study is focused on improving the measurement of the sector’s contributions and removing obstacles to maximising its contributions to society. So far the commission has received has received 152 submissions, totalling over 2,500 pages including attachments. Amongst the key trends emerging from the submissions are concerns that the focus of the study will not be broad enough to represent the sector. The terms of reference for the study asks the Commission to adopt a broad definition of the sector to encompass most types of NFP organisations, however many organisations remain concerned. Many organisations have also used their submissions to question the effectiveness of previous Government studies into the sector, citing a lack of new legislation despite extensive contributions from the sector to previous Government reviews. Here’s a snapshot of seven submissions that the commission has received: In their submission to the commission, Volunteering Australia argues that to enhance the functioning of the sector, a better understanding of the contribution of volunteers is needed. Here’s an extract: In order to enhance the efficiency and effectiveness of the not for profit (NFP) sector we contend that a better understanding of volunteers’ contribution to our social, environmental, economic and cultural life is pivotal. Volunteering Australia argues that to stimulate the contribution of volunteering and volunteers it is necessary to: – provide greater recognition of the contribution of volunteers; – invest more in volunteering; – provide protection for all volunteers at organisational and regulatory levels; and – consider the ramifications to volunteers and volunteering in the formulation of new public policy. We propose that greater recognition will provide better understanding of the breadth and depth of volunteering, through research into all the areas where volunteers are involved, the roles they take up, the incentives and barriers to volunteering. Associate Professor Melanie Oppenheimer from the University of Western Sydney expresses concern that volunteers are largely ignored in the study – they aren’t mentioned in the study’s terms of reference and are only mentioned tangentially in the Issues Paper. Here’s an extract: For too long, volunteering has been overlooked in regular economic statistics. This invisibility undermines the importance and impact of volunteer work as contributing to the welfare and productivity of Australia, and the enormous social and civic contributions of volunteering. The result is a ‘blind spot’ when it comes to developing government policy. Oppenheimer also raises concerns that the scope of the study is too narrow, causing the study to be overly focused on government funded social services. Here’s an extract: As the Issues Paper rightly points out, the sector is diverse and complex – it was not called ‘a loose and baggy monster’ for nothing (Kendall & Knapp, 1995). Yet in the Productivity Commission’s attempts to become more ‘focussed’, it appears that the study is really only going to concentrate on not for profit organizations in the social services sector that are directly involved in the delivery of government funded services (p. 11). While such a focus may be of some benefit to some (especially the government), it will not assist in measuring the impact of the broader not for profit sector and will lessen the validity, usefulness, and impact of the overall Productivity Commission’s research study. Connecting Up echoed fears that the focus of the study will not be broad enough to represent the sector. Connecting Up, an organisation focused on information and communication technologies and their use in the Not for Profit sector, raised concerns that the government views the traditional ‘welfare sector’ as representative of Not for Profit organisations as a whole. Here’s an extract: Our concern, and we believe the concern of many nonprofit organisations, is the extent to which the traditional welfare sector (and especially the major welfare agencies contained within it) has captured the attention of governments and is seen to be broadly representative of nonprofit organisations, when this is simply not the case. This aligns with governments’ apparent imperative of having a single body with which to negotiate on all matters related to nonprofits, as exemplified by current negotiations in relation to a Compact. This underlines the danger of seeing this review entirely through the prism of the Government’s social inclusion agenda, which implies a concentration on personal services and interventions to the exclusion of broader social change agendas. The complexity and breadth of the sector does not allow for such seemingly neat solutions and will end up distancing Government from the value that a broader dialogue brings. Fundraising Institute of Australia expressed concern in their submission that the study focuses too much on government funded organisations, at a cost to other organisations – such as those funded by private grant makers and public fundraising. The FIA urges the Commission to include Not for Profit’s that rely on independent sources of funding. Here’s an extract: FIA supports the Productivity Commission in adopting a broad view of the sector for the purposes of assessing its contribution. However, FIA believes that it is insufficient to place too great an emphasis on policy and capacity issues faced by government funded organisations, as this could potentially exclude the large number of organisations operating in Australia that depend on funding from private grant making bodies and public fundraising. In particular, overseas aid and development agencies (it is estimated that in 2007, 81% of funds raised by such organisations was public donations) (*Australian Council for International Development data) could potentially be excluded from the study. Considering this, it is vital that the study take in nonprofit organisations that depend on other independent sources of funding. The National Roundtable for Nonprofit Organisations is another organisation concerned by the focus of the study, expressing the worry that a large number of organisations that rely on public donations – such as international development organisations and arts organisations – may be excluded. Here’s an extract: (However), there are concerns that the narrow focus of consideration of policy and capacity issues raised in the terms of reference, with a particular focus on government funded nonprofits, might exclude a large number of organisations that rely on public donations and are not directly related to public or government service delivery such as international development and arts organisations. It will be important to ensure that the relevant policy and capacity issues for these organisations are addressed in the Commission’s consideration of ways of enhancing the efficiency and effectiveness of the sector. The Roundtable also expressed a concern evident in many of the submissions – that despite previous extensive enquiries into the sector, there has been very little legislation produced. It says the Not for Profit sector has committed significant resources to government enquires into the sector, as seen in this current study, and many organisations feel that it government inaction means such efforts have been largely wasted. Here’s another extract from the Roundtable’s submission: There remains, however, very significant unfinished business from a number of previous reviews which need not be replicated but which still warrant attention and action by government. The nonprofit sector has committed significant resources to responding to various reviews from the 1995 Inquiry into Charitable Organisation in Australia to, most recently, the current review into Australia’s future taxation system organisations. From this significant commitment, few recommendations have been adopted and little change has been seen in the regulation of nonprofit sector. Queensland University of Technology’s Australian Centre of Philanthropy and Nonprofit Studies (ACPNS) estimates nonprofit organisations have contributed: 12,920 pages of public submissions 56 days of hearings, 45 site visits 1,344 pages of official reports resulting in: seven (7) pages of legislation about the definition of charity*. (*Industry Commission, Charitable Organisations in Australia, Report No 45, AGPS, Canberra, 1995; Inquiry into the Definition of Charities and Related Organisations, available at http://www.cdi.gov.au). This is neither effective nor efficient as a means for governments to seek advice and to effect change in the regulatory environment. Nor is it an effective or efficient way for nonprofit organisations to continue to use their resources in the belief that the government will finally listen and do something. The Australian Council of Social Services used their submission to call for an overhaul of the regulatory regime, in favour of a single national regulator. ACOSS also called on the government to implement the recommendations of the 2001 Definition of Charity Inquiry. Here’s an extract: A complete overhaul of the regulation regime applying to Not for Profits is long overdue – the complexity and duplication by the more than 20 means of incorporation, different fundraising and other laws is impeding the sector ability to respond to the global financial crisis, an ageing population and delivering more effective solutions to its clients. ACOSS reiterates its call for a single national regulator (a Not for Profit Commission). Australian Not for Profits, their voluntary Boards, the legal profession and government officials all struggle with definitions of charity based on British statutes from the 1600’s. The recommendations of the 2001 Definitions of Charity Inquiry have been widely accepted and the Federal Government should implement them without further delay. In their submission, the Asia Pacific Centre for Social Investment and Philanthropy alls for the development of a community financial institution to expand and strengthen the financing options available to the Third Sector, as well as creating new legal entities and regulation to encourage investment by philanthropists and private investors. Here’s an extract: Specifically, this submission identifies the need for the development of a robust community development financial institution (CDFI) sector in Australia to expand and strengthen the financing options available to third sector. Furthermore, it encourages consideration be given to the establishment of new legal entities and supporting regulation to encourage and facilitate investment by philanthropists and private investors alike in a socially inclusive Australia. In their submission, Changemakers Australia calls for changes to charity law, to allow Not for Profit’s to engage in advocacy and to campaign for public policy reform. Here’s an extract The law relating to charities places restrictions upon Not for Profit organisations (NFPs) whose main (or more than incidental or ancillary) purpose or activity is advocacy that supports or opposes a change to the law or public policy (that is, “advocacy for public policy reform"). In order for NFP organisations to effectively address the underlying causes of social ills, such as poverty, inequality, abuse of human rights and environmental degradation, they must have the capacity to pursue public policy reform. However, by doing so, NFP organisations may no longer be considered as charities under the legislation, potentially losing access to a range of taxation concessions, as well as to some philanthropic funding. The Draft Report is due for release in early September, with Draft Report submissions due in mid October. The Final Report is due to be released in December 2009.