Governments at all three levels in Australia federal, state and local are increasingly adopting competitive tendering and contracting philosophies. This has led to substantial changes in the way government deals with non-profit organisations.
The first significant change is that, for many services, government now relies more heavily on non-profit organisations to provide services which may once have been provided directly by government.
Government now also often enters into these service provision arrangements on a commercial or quasi-commercial basis, rather than through more traditional funding approaches. A good example of this phenomenon is the closure of the CES and its replacement by a created market place of service providers delivering employment services to unemployed people. The market place of service providers, called the Job Network, includes organisations from both the for-profit and the non-profit sectors.
Service providers were selected as the result of fully-commercial tendering processes, and have entered into standard commercial contracts to provide the services. During the life of the first round of contracts for employment services, it became apparent that many non-profit organisations (and indeed some commercial organisations as well) had not fully understood the scope of services they were contracting to provide or the service level expectations of the government.
The second significant change involves those services that have traditionally been provided mainly or exclusively by the non-profit sector, and which are still provided by this sector.
However, in some situations, government is now consuming much larger quantities of these services than previously, stretching the capacity of the non-profit organisation to deliver the quantities required to an acceptable level of service e.g. the growth in using charitable institutions to provide short-term emergency housing and food for unemployed or homeless people.
While non-profit organisations have always worked in these fields, the evidence presented appears to show that there is growing demand for these services. Anecdotal evidence also suggests that this may be a deliberate management strategy on the part of some elements of government.
Considering the issue as risk management activity, however, suggests some matters for further consideration. From the non-profit perspective, the risk of over-use of resources could be risk-managed by:
conducting research seeking evidence based data to support (or refute) the anecdotal evidence that there is a growing reliance on charitable support - governments typically respond better to a business case seeking increased funding than to a plea to 'do the right thing'
considering some forecasting of demand for services to better enable them to prioritise the services which should be delivered within the existing budget
