“Cause” and effect: Looking at the not-for-profit aged care sector from an Australian perspective

Judith Davey

7/7/16

A wealth management and stock-broking firm is not perhaps the first place you would look to for an analysis of the not-for-profit sector. The Cause Report, recently published by JBWere in Australia, does not tell us about social wellbeing, alleviation of social ills, or quality care[1].  Its focus is funding and investment, balance sheets and staffing. Even so, it presents some interesting data and comparisons, and has a section on aged care.

How does New Zealand compare?

First, there are some international comparisons, including  Australia, New Zealand, Canada. Japan, the UK and USA. Taking the sector as a whole, New Zealand has the lowest number of staff per NPI (non-profit institution) and the smallest number of people per NPI. In other words, in comparative terms, our NPIs are small, but many. The sector’s contribution to GDP is 2.8%, as against 7.1% for Canada and 5.5% in the USA.

Differences in funding sources are interesting. Among the six countries listed above, the not-for-profit sector in New Zealand has the lowest percentage of funding from government sources – 9% as against 51% in Canada and 47% in the UK (the data comes from a variety of recent sources). But the sector in New Zealand has the highest percentage from philanthropy – 24% – the USA coming next at 13% (data based on tax deductible donations).  Even bearing in mind the difficulties of measurement and comparisons, it appears that in New Zealand the government is much less generous in its support, but that Kiwis are better givers to charity.

So what about aged care? The report notes that this is one of the fastest growing segments of the “charity field” in terms of income and assets and that this growth is likely to accelerate. The report compares not-for-profit aged care with other groups in the sector, from the Australian perspective.

Aged care outranks the other areas in terms of income, staff and assets and also government grants (along with not-for-profit health, welfare and education organisations). Aged care is second only to education in number of employees, and ranks highest for employee costs as a percentage of total costs. On the other hand, aged care scores low on average wages – the average is only about half of that for higher education and research. This is something which could have been predicted, given that aged care in New Zealand also is a low-wage sector.

I found it interesting to see how the non-profit sectors compared in the receipt of donations and bequests. The highest dollar totals were for religious charities (not welfare groups run by religious organisations), research (mainly medical), higher education, social service and health NPIs.  Aged Care ranked very low in terms of the value of donations.  Does the Australian population not think of aged care as worthy of giving or bequests, or does the sector not “pitch” for such funding compared to private schools and universities, the Red Cross, Salvation Army, or World Vision. I wonder what the picture would be in New Zealand.

 Predictions for the future

The Cause Report predicts the future of the not-for-profit sector, influenced strongly by JBWere’s business orientation. These verge on recommendation and include:

  • Finding new ways of operating; new operating methods and delivery models, greater and more imaginative use of IT, quicker and wider knowledge-sharing.

  • A greater focus on measurement to argue for better funding (financial rewards in JBWere-speak) from funders or beneficiaries.

  • Coping with increased transparency, benchmarking and relations with news media.

  • Partnerships between profit and not for profit organisations – blurring of the lines between them. “NFPs (not-for-profits) need to better value the knowledge they bring to the relationship and develop an understanding of how they are helping the for-profit (s) while also enhancing their own mission.”

  • Rapid growth may lead to mergers and acquisitions.

  • Improving volunteering –attracting the next generation of supporters as the current volunteer workforce ages. This is also true for board membership. It “may result in having a potentially smaller but more engaged and mutually useful volunteer workforce.”

  • Trying to improve areas where there is potential for philanthropy. NFPs need different skills to address corporate giving compared to a mass market (which I interpret as standing on street corners shaking a tin).

[1] John McLeod (April 2016) The Cause Report – 20 years of (r)evolution in the not for profit sector. JBWere Australia

 

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About Age Concern New Zealand 'on research'

At the heart of everything Age Concern does is a passion to see older people experience well-being, respect, dignity, and to be included and valued. We support, inform and advise older people on issues such as access to health care, transport, housing, financial entitlements, and social opportunities. We also work to combat real problems in our society, like elder abuse and neglect, chronic loneliness and social isolation. We provide specialist services with trained and qualified professionals able to give expert advice and assistance. Age Concern is a charity and relies on the support of volunteers and public donations to do much of the work we do. To help us help older people, please consider making a donation of your time or money. To see how, visit www.ageconcern.org.nz
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