Repercussions of the corporisation of charity organisations

Posted: February 4, 2011 in society
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The Age published an interesting article this morning by Vern Hughes on how our big not-for-profit organisation have succumbed over the years to corporatisation, and in the process have lost an important function they once add: to build social capital (which of course is not just an Australian phenomenon).

Non-profits lose sight of volunteer heritage

The Australian of the Year, Simon McKeon, has urged Australians to volunteer in community organisations and become involved in the non-profit sector. Both are easier said than done.

Australia’s voluntary, charitable and community organisations have changed over the past three decades, almost beyond recognition. Such transformation of the non-profit sector has attracted little public debate.

Many organisations that began life as voluntary associations have become corporatised instruments of government service delivery and no longer need, or even want, volunteers. Those that still have a place for volunteers are often trapped in a web of regulations and risk-management protocols that reduce volunteering to narrow, mechanistic and unsatisfying tasks.

Most found it easier to seek and obtain public contracts for their operations and to tailor their mission to the delivery of these contracts, than to rely on private fund-raising or commercial income generation.

In the process, their programs and operations came to reflect the silo structure of government, and their internal cultures mirrored the government’s risk-averse culture. They became accountable, not to their clients or founders, but to their funding departments.

A generation of non-profit managers rose to ride this service-delivery train, replacing their organisations’ once colourful and idiosyncratic cultures with a bland managerialism.

The result is a third sector in deep confusion, torn between its voluntary heritage and its managerialism. Most organisations with a history of more than three decades are unrecognisable from the groups that formed in church halls and around kitchen tables in a previous era.

Disability service organisations are a case in point. Most of the disability agencies now headed by chief executive officers, complete with a raft of risk-management, regulatory-compliance and brand-protection policies, were formed by parents of people with disabilities. These parents knew they needed to create, from scratch, the supports and services required by their sons and daughters.

They usually began around a kitchen table. Everyone was a volunteer. Consultants were unheard of. The only resources on tap were goodwill and a willingness to work together for no reward apart from securing something in the future for their loved ones.

Today many such parents find themselves referred to, in the annual reports of the bodies they created, as ”stakeholders” in the welfare of their sons and daughters. They appear alongside key stakeholders such local governments, suppliers and corporate partners. Many shake their heads in disbelief at the entity they unknowingly created. ”We gave birth to a monster,” some say.

Managerialism – in public, private and community sectors – is the prevailing ideology of our time. It has trumped entrepreneurship in the private sector, and perverted notions of service in the public sector. But in the non-profit sector it has swept all before it.

The news, then, that McKeon, a Macquarie Bank manager who has been immersed in these processes, plans to use his appointment as Australian of the Year to raise the profile of the non-profit sector, heralds an opportunity for Australians to look closely at the sector. Critical scrutiny of what has happened in the past 30 years is needed, not a fund-raising sales pitch on behalf of the large charities.

The managerial focus on ”outcomes” has been a two-edged sword for non-profits. It has been embraced with a passion by their chief executives and boards determined to prove their value for money for funders and donors.

But it has simultaneously subverted the generation of social capital – the capacity of people to associate voluntarily along horizontal rather than vertical axes for mutual benefit and service to others, independent of managerial prerogatives and directives, and government programs.

Voluntary association is an art, and if not practised, is lost. The instinct for, and the practice of, voluntary association is being choked all around us by managerialism. It is to be hoped that McKeon’s tenure as Australian of the Year will lead to a thoughtful, critical and wide-ranging public debate about the importance of nurturing the non-profit sector and the capacity of each of us for voluntary association.

Vern Hughes is the director of the Centre for Civil Society.

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