Don’t reform, but transform, sector leader urges community directors

Speaking at the May 17–18 Communities in Control conference in Melbourne, the NSW Ageing and Disability Commissioner said a flourishing not-for-profit sector was fundamental to the restoration of societal trust.

“In Australia, like in so many other parts of the world, societal trust in our institutions has crashed,” he said.

Mr Fitzgerald said the pandemic had helped people understand that governments mattered, that citizenship mattered, that communities mattered, that connectedness mattered. These notions had been lost over the past two decades or so, he said.

“Why was it that we ever thought that communities didn’t matter? Why was it that this nation of ours, bright and intelligent though we are, actually thought that communities could be supplanted by something else?” Mr Fitzgerald said.

“We are in a historic moment and the question is whether or not we are brave enough, clever enough, to grab this moment or will we simply revert back to where we were?

“The signs at the moment are not encouraging. The signs are that many in society want to go back to what we had, to where we were. Well, I don’t. I want something better, something that is different, and so do you because you wouldn’t be here if you didn’t.

“I do think we have the capacity to do that. But we can only have the capacity if we use those four elements; that of government, citizenship, the notion of community, and the notion of connectivity.”

The sector needed not to reform, but to transform, Mr Fitzgerald said.

He highlighted six key barriers to transformation that not-for-profit directors needed to understand and address:

• Incrementalism – an unwillingness to embrace big ideas
• Dominance of market ideology – a belief that any type of organisation could deliver human services
• The “big is better” myth – a believe that only big operators can effectively deliver human services
• An obsession with service delivery – concentrating on delivery of services at the expense of the things that truly matter in helping people live a connected, dignified life
• Fear of failure – not-for-profit boards becoming too risk averse and not willing enough to innovate and embrace creativity
• Individualism – an increasing propensity to compete rather than to collaborate and share best practices.

Incrementalism

Mr Fitzgerald said Australia was blighted by a political culture that shied away from selling big ideas and big reforms.

“The Commonwealth is littered with public servants, advisory bodies and politicians who no longer believe that it is possible to achieve substantial transformational reform,” he said.

“Are they right? Have Australians given up on the big ideas? Have Australians given up on the capacity to embrace reform?

“If they are right, we simply live in the mediocrity of incremental reforms, and very small ones at that.”

Mr Fitzgerald said many in the not-for-profit sector had “given in” to the culture of incrementalism.

“We said okay, it’s not possible to achieve big ideas,” he said. “All we achieve is small things and half of those get wound down later on anyway.”

Market ideology

Mr Fitzgerald said Australians needed to be wary of opening human services markets to just any players.

“I am very clear now in my mind that in the human services areas, markets should not be dominated by for-profit operations,” he said.

“(Businesses) absolutely should be in the market, they absolutely have a role, and many of them are outstanding performers. But what not-for-profit organisations give to society is so much more valuable and yet it is not acknowledged.”

Mr Fitzgerald said governments must pay attention to who was delivering human services, how they delivered them, and the funding models by which they were delivered.

“There is a reason why not-for-profits and for-profits operate differently within marketplaces and human services areas, and those differences are important to understand,” he said.

Mr Fitzgerald said the value and impact of the sector went well beyond the delivery of services.

“The great value of the sector lies in what they call ‘externalities’ or ‘spill-overs’ – things like social cohesion, the restoring of social trust, social engagement and the reduction of social isolation; or, as we’ve been talking about, connectedness.”

The “big is better” myth

The delivery of human services – health, aged care, early childhood development, disability – must not become dominated exclusively by big players, Mr Fitzgerald said.

“Size doesn’t mean better. In fact, the … Aged Care Royal Commission explicitly said that the poorer performers were the larger agencies, the bigger homes,” Mr Fitzgerald said.

“It would be fatal to those human service markets if they are dominated almost exclusively by large for-profits or not-for-profit organisations.

“They have a role, they will be with us, and many of them are very good operators. But we do need to be very cautious about this notion that big is better, that big is the only way that you achieve efficiencies.

“That is not true and it’s a falsehood that is being propagated by far too many people who should know better.”

Obsessing over service delivery

Many in government, and the not-for-profit sector, were preoccupied with delivery of services, sometimes at the expense of what really mattered, Mr Fitzgerald said.

Referencing the aged care and disability care arenas, he said the manner in which services were rolled out must also be considered.

“At the end of the day, the very things that maintain the wellbeing of older people in their own homes and in their own environments are those issues of social connectedness,” he said.

“If you want to call them a service, fine, but they’re not really. They’re something very different and they need to be constructed and funded in a different way.”

Fear of failure

In business, and in most other parts of life, people understood intrinsically that failure was part of success, Mr Fitzgerald said.

“It’s almost a prerequisite. Trying things that don’t work is important.”

Mr Fitzgerald said the not-for-profit sector was being held back by a fear of innovation, including a fear of funding innovation.

“We get to social services and we take this sort of risk-adverse approach, as though innovation is somehow dangerous,” he said.

“Why is it, as a nation, we are reluctant to fund innovation in this sector with the risk that it may not work?

“We have to find that new energy, that new capacity to accept risk.”

Mr Fitzgerald said the boards of not-for-profit organisations had become more risk averse in recent times.

“It can’t be that we’re becoming more and more conservative at the very time that we need greater and greater innovation, creativity, in order to have transformational change” he said.

Individualism

Mr Fitzgerald said not-for-profit organisations needed to get better at working with each other and sharing best practices.

“A higher level of individualism [has] crept into the not-for-profit sector in recent years, largely born out of competition and market-based principles,” he said.

“So many in the sector want to do it themselves; they don’t see the value in peak bodies, they don’t see the value in collaboration.

“My view is that it’s collaboration that has actually made the Australian and civil society so strong – it’s the very essence of it.

“You can be a competitor for funding but still be collaborative, in terms of best practice, in working together to achieve the aims and objectives of low-income people or socially disadvantaged people in your own community. We can do that.”

Rearticulating the value of the social sector

Mr Fitzgerald said the not-for-profit sector needed to embrace and promote its distinctive character and value to government and to the wider community.

“This sector is strong, it is robust, it is innovative, it is passionate, it is committed and more often than not it is compassionate,” he said.

“But it has to rearticulate the value that it has to society in every forum, and governments and other leaders of our community have to reappreciate this importance.

“It’s not about saying that we’re better than anybody else – it’s not about saying business is bad, it’s not about saying governments have lost the plot.

“It’s to actually say that this particular sector – community engagement, community activism, if you want – has a real and legitimate role in the future of shaping Australia.

“COVID proved it, so we don’t need the evidence – we have it. The question is whether we have the will to do it.”