Not-for-profits Commission – good or bad?

The Australian Charities and Not-for-profits Commission (ACNC) is fighting for its existence before it even begins.  The establishment of this regulatory authority is embroiled in a political debate that has the Government on one side, the Coalition on the other and the Greens in the middle.  Why should the debate about this be different to any other political debate in this term of Government?

Politics aside the question the not-for-profit sector is asking is, is the formation of the ACNC a good or bad thing?

In theory the idea of having a body which oversees the ridiculous amount of organisations in the sector makes sense.  There are 600 000 not-for-profits in Australia and the sector itself is worth over $50 billion a year, between Government funding, donations, volunteer time and taxation expenses.  This was according to a report published on the Department of Finance and Deregulation website in May 2011.  A recent report by the University of Adelaide has gone further to suggest that volunteering in Australia is actually worth $200 billion and is therefore worth more than the mining sector.  This begs the question, why should a sector worth so much money not to mention the investment of good-will fly under the radar?  Could we create a more efficient sector through decent regulation?

The Opposition argue that the ACNC is simply adding a new layer of complexity and requirements for a sector already suffering with finding the resources for administration.  What the figures mentioned above don’t tell you is that the majority of money and volunteer hours provided is for direct service provision.  Not-for-profits are no different to the business sector in that they need administration and management to ensure they are paying the bills and operating within laws and funding requirements.  Some organisations find themselves dealing with state and federal bodies who often have very different requirements.  If you then add the ACNC over the top of this the concern expressed by some not-for-profits is that it will cost a lot more for the organisations to be able to adhere to the requirements.  But there is no money for the administration already.

The reality is the not-for-profit sector is generally inefficient when it comes to administration.  There are no shared resources.  There are no real market forces currently at play.  Unlike your local shops which all compete with one another, there is no real sense of competition, because unlike a business they can survive on no real money, just volunteer hours.  Nobody has ben forcing these 600 000 organisation to look at how they might more actively merge or at least form partnerships and share costs.  There are some exceptions, but they are the minority.

The question we have to ask is whether the ACNC can create efficiency without creating more work.  There has already been suggestions from Pro Bono Australia that the ACNC are looking to hire 90 staff to operate.  Wow, there is nothing efficient about that.  Surely the job can be done by 10 staff at the most.

When we ask the question, ‘Not-for-profits Commission – good or bad’, we need to be clear in understanding what they will bring to the table.  I am still not sure we know enough.  All we do know is that the aim is to reduce the number of not-for-profits.  For the sector the question is who will survive?  Going back to the ACNC the question is whether they are going to go about it in the right way.  Like I said, we still don’t know enough.

I will declare an interest here in that CommTogether does much of its work for the not-for-profit sector.  I do work for a number of organisations and sit on the Board of a charity.  My question to the ACNC and those considering its makeup, why aren’t you talking to CommTogether because we know the sector from a communications and marketing perspective?  The focus has been on regulation, when the focus should be on the market.  Allow market forces to help drive greater  efficiencies, not by creating regulations but by delivering paltforms that encourage greater transparency and understanding of the sector.  If people understood the importance of administration and long term sustainability better you would see market forces drive the need for efficiency.

For what it’s worth, to the ACNC and any politicians reading this, be they Labor, Liberal, National, Green or Independent – come talk to us because CommTogether has some ideas that could really make a difference.

If you are a not-for-profit then I encourage you also to talk to us, because the not-for-profits who have engaged us for a project or regular retainer work will survive long term regardless of what the ACNC brings – the reality is many organisations can’t say that.  So, Not-for-profits Commission – good or bad?  The question for those in the sector is really can you afford to wait and see?