The not-for-profit community sector is a unique and valuable component of Australia’s economy and society, delivering value in many ways. It offers a diverse range of programs and services to help people overcome disadvantage and poverty, advocates strongly for policy solutions, supports a wide range of people with multiple and complex needs, can be innovative and collaborative, and generates significant income, employment and volunteering levels. In Victoria, as outlined in our Strengthening the state: A snapshot of Victoria’s community sector charities report, community sector charities contribute an estimated $13 billion a year to the Victorian economy and employ almost 97,000 Victorians, 3 per cent of the Victorian workforce. Its workforce is also more than doubled in number by volunteers, with almost 135,000 people estimated to be volunteering at community sector charities.
The South Australian Council of Social Service (SACOSS) and the ACT Council of Social Service (ACTCOSS), recently released a research report on the independence of the community sector. The report identified how independence is understood in the community sector as well as in the legislative documents creating the Australian Charities and Not-for-profits Commission (ACNC) and among ACNC staff.
The report identified three elements of independence:
- freedom of voice or freedom to advocate
- organisational autonomy
- financial independence.
Freedom of voice
The freedom of voice or freedom to advocate on matters of public policy is held dear by the community sector. The sector’s advocacy role is seen as vital to a well-functioning democracy as it can speak out with, and on behalf of people, who are all too often not heard in our society. Community sector organisations also have specialist knowledge about the needs of the communities and people they serve, and are often the first to identify the consequences of policy changes, poorly designed programs and legislative change.
There have been various attempts by state and federal governments to prevent community sector organisations that receive government funding from speaking out about matters of public policy. These ‘gag’ clauses in contracting and funding agreements seek to limit the ability of organsiations to seek legislative and other changes that may benefit service users. Gag clauses have been criticised by ACOSS as:
“…an attack on the legitimate role of civil society organisations and clearly diminish our capacity to represent and advocate for the people that we are here to assist.”
Organisational autonomy refers to independence from government and others regarding how organisations operate and manage their own affairs, true to the organisation’s mission.
Increasingly, governments have an increasing impact on the organisational autonomy of the community sector as a result of more and more services being ‘outsourced’. Increasingly governments can view funded community sector organisations as extensions of government agencies. This can be evidenced by prescriptive models of service delivery, such as for job service providers. At a recent Brotherhood of St Laurence Lunch time seminar, Professor Mark Considine presented research that showed job service providers feel they have less autonomy in what they can offer job seekers.
Further, highly rigid contracts give broad discretion to government funding departments allowing them to intervene into organisations and the prescribe non-service standards (e.g. accounting and record keeping) that go beyond those required by regulators such as ACNC or Consumer Affairs Victoria.
Competitive tendering arrangements are also seen to be impacting on organisational autonomy. Tendering processes result in more contracts with large over small organisations and mainstream organisations over Aboriginal controlled community organisations.
Government tendering and funding arrangements can strengthen the sector’s diversity through structures that do not pitch organisations against each other, or create reactive cycles where organisations are frequently applying and re-applying for funding to ensure their survival.
Financial independence refers to independence from government as a sole or main source of income. A financially independent organisation requires diverse sources of income from government and non-government sources so that it is not reliant on a single entity for its income. This, in turn, gives an organisation greater freedom to advocate and greater opportunity to develop services required by the community it serves.
While many organisations are funded from a wide range of sources, including government departments, philanthropic bodies, social enterprises and other fund-raising, a significant proportion of organisations are primarily dependent on one (government) source of funding.
The ACTCOSS and SACOSS Independence of the not-for-profit sector report found organisational autonomy and freedom of voice are fundamental to how independence is defined by community sector organisations. Financial independence is also crucial to a thriving community sector, which is more and more challenging in a fiscally constrained environment. VCOSS believes that a strong, innovative and independent community sector is vital to reducing poverty and disadvantage. VCOSS will continue to pursue a regulatory, funding and workforce environment that sustains a strong, innovative and independent community sector.
 Victorian Council of Social Service, Building on the value of Victoria’s community sector, 2015
 For example, see S Maddison, R Denniss, & C Hamilton, Silencing Dissent Non-government organisations and Australian democracy, The Australia Institute, 2004, p. 13.
 C Goldie, Community sector applauds proposal to legislate to ban gag-clauses, 2012. http://www.acoss.org.au/media_release/community_sector_applauds_proposal_to_legislate_to_ban_gag-clauses/
 M Considine, Getting Welfare to Work: Street-Level Governance in Australia, the UK, and the Netherlands, Brotherhood of St Laurence Lunch Time Seminar, 3 September 2015. This is the topic of a forthcoming book.
 Victorian Council of Social Service, Building on the value of Victoria’s community sector, 2015.
 Productivity Commission, Contribution of the Not-for-Profit Sector, Research Report, Canberra, 2010.