The nature and evolution of growth in the not-for-profit sector – the end of easy growth in Australia?

By Trish Dodge, Manager – IOOF Foundation

The IOOF Foundation in partnership with Good Beginnings Australia, a national charity building better outcomes for children living in vulnerable communities, was proud to present the third annual Learning through Innovation Forum in Melbourne on 8 April.

Keynote speakers David Crosbie (CEO, Community Council for Australia) and Sandy Blackburn-Wright (Executive Director, Impact Strategist) discussed and debated the growth challenge for the not-for-profit sector, and the emerging opportunities for new funding models and markets.

David Crosbie highlighted the great opportunity for the sector to begin operating in a more cohesive way and demand a greater say in policy development and decisions by governments at all levels, given the over one million Australians are now employed by the sector (second only to the retail sector in Australia) and has a turnover of close to $100 billion per annum. The sustained growth of 5 per cent plus per annum enjoyed by the sector over the past decade will stall unless the sector develops a bigger voice and innovates.

David also highlighted the insanity of a focus on activities over outcomes that still exist in the way many services are funded, designed and delivered, and how not-for-profit organisations must lead the way in changing this mindset in order to be true to their purpose and values.

Good Beginnings Australia’s Chief Executive Officer, Jayne Meyer Tucker said “David presents a bold stance and it is one that Good Beginnings is keen to lead, as to truly fulfill the moral obligation of a good beginning for all Australian children. New funding models and ways of collaborating must emerge”.

Sandy Blackburn-Wright noted the growing funding gap between what the Government will be able to afford in basic services provision by 2020 and the level of demand (particularly in healthcare). There is a funding gap that will inevitably lead to a squeeze on the not-for-profit sector to ‘do more for less’ (a process which has arguably already begun), which will require organisations to seek new funding models to not only grow, but to maintain current levels of service provision.

Governments are beginning to ask how services can be funded with a better focus on outcomes over activities and over time this will lead to contracts with not-for-profit service providers that pay for outcomes – that is, how many people’s lives have you changed in what way with your service or program, rather than how many people did you see? This will lead to risk-sharing arrangements and put pressure on the not-for-profit sector to become more sophisticated in tracking and reporting on social outcomes.

Fortunately, there are exciting new developments in social innovation funding and new capital markets in Australia (with but one example being Social Impact Bonds), around which consortiums and intermediaries are beginning to form.

There is a challenge ahead for this sector. It is time for bold approaches that reflect an outcome focus, engaging with those that decisions affect the most and demonstrating collaborative models of practice. The opportunity is there.

For more information, please contact Trish Dodge, IOOF Foundation Manager.

good beginnings

From left to right: David Crosbie, CEO Community Council for Australia; Jayne Meyer Tucker, CEO Good Beginnings Australia; Ron Bunton, Director IOOF Foundation (host); Sandy Blackburn-Wright, Executive Director Impact Strategist.

Foundation news

For more information on projects supported by the Foundation, please read our Summer 2014 (link - http://www.iooffoundation.org.au/our_stories/publications).

Further information

Visit www.iooffoundation.org.au or contact Trish Dodge, IOOF Foundation Manager on 03 8614 4560.