For three decades, Australia’s voluntary, charitable and community organisations have been assaulted on three fronts.

From one side, governments have colonised a large proportion of these bodies by turning them into service delivery instruments for the state, creating, in the process, a field which is now rather charmlessly labelled the “human services”. From another side, private sector operators have made significant incursions into this field, especially in child care, health care, the Job Network, and the burgeoning counselling, spirituality and therapeutic self-care scene. And from within, a generation of not-for-profit managers have emerged to capture the internal culture of many organisations, replacing their once colourful and idiosyncratic cultures with a bland managerialism. 

The result is a third sector in tatters. This threefold assault over the last thirty years has been less a series of periodic challenges than a kind of blitzkrieg. Most organisations with a history of more than three or four decades are now completely  unrecognisable from the groups and associations from which they formed in church halls and around kitchen tables in a previous era.

Disability service organizations are a case in point. Most of the bodies now headed by CEOs, complete with a raft of comprehensive risk management, data protection and brand promotion policies, were formed by parents of people with disabilities who knew they needed to create, from scratch, the supports and services needed 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 now find themselves referred to, in the Annual Reports of the bodies they created,  as ‘stakeholders’ in the welfare of their sons and daughters, alongside either 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 entrepreneurialism in the private sector, and perverted notions of service in the public sector. But in the third sector it has swept all before it. A deathly silence in the public arena has accompanied this clean and quiet strangulation.  

The dynamics of this process have been clear enough. The mass output of social science professionals from universities in the 1970s in a range of new human service disciplines was the driver for an expansion  of services in fields such as health, welfare, employment and training, housing, education, child and family services, aged care, child care, youth services, drug and alcohol services, disability and mental health. With a proliferation of service and program types, built around new disciplines and new client groups, a service system emerged characterised by a bewildering complexity in organisational and regulatory structure. Providers of services  were required to ‘professionalise’ their operations and adopt ‘standards’ imposed by funders and regulators who, in turn, were prevented from differentiating between the public, private, or community status or identity of diverse and competing providers. Many  formerly voluntary, charitable and mutual forms of social support were absorbed into this emergent service system. 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 solely on private fundraising or commercial income generation. In the process, their programs and operations reflected the silo structure of government.  Their internal cultures mirrored the risk-averse culture of government. They became accountable, not to their clients, and certainly not to their founders, but to their funding Departments. And they were run by an emergent  class of managers whose career paths wound between government, community and private sectors. The march of the managers’ feet across sectoral boundaries soon trampled any residual notions of sectoral differentiation between the ‘public’, ‘private’, and ‘voluntary’.

The question is: does any of this matter?  

It certainly doesn’t matter to the generation of not-for-profit managers who have ridden this wave. Yes, some will complain about their hands being tied by contractual restrictions on their ability to criticise government policy decisions. But these restrictions can usually be loosened to their satisfaction, and the Rudd Government has undertaken to make these adjustments. Having found their place in the contractual state, most managers have proven willing to tailor their organisation’s mission to secure their place. 

Nor does it matter to politicians on either side of politics. Since the electoral contest in Australia is about claiming credit (or assigning blame) for the adequacy of government service delivery, no politician willingly seeks to widen the operational gap between the public funding of services and their delivery on the ground. That makes it too difficult to play the credit/blame game. Most large not-for-profits now have communications and public relations departments whose focus is to cultivate political support on both sides of politics so that future ministers will always understand that the issue is never the method or quality or structure of service delivery – it is always about the volume of spending , and more money always means more and better services (or so they say). This merry dance between politicians and service providers works for both sides. 

Nor does it matter to policy makers, who have inherited a highly instrumentalist approach to social policy. Voluntary, charitable, self-help and mutual forms of association are now typically deemed by policy makers to be simply instruments for the achievement of policy objectives. These objectives are usually prescribed in terms of the transfer of units of service or care or knowledge to a specified client group. The instruments of the transfer are not assigned any intrinsic value. Social capital – the capacity of people to voluntarily associate with each other for mutual benefit or service to others –  has no intrinsic worth or place in this policy instrumentalism.  

What then is to be done? A line needs to be drawn under the instrumentalism which has shaped social policy over the last three decades, and a new page opened which begins with the dual cultivation of social capital and individual responsibility as the two primary social processes to which good social policy should be attuned. 

This requires a brave new leadership in social policy thinking. It is akin to the shift in economic policy thinking that took place in the 1980s when both sides of politics agreed that financial regulation and protectionism had run their course.  A new leadership emerged then to chart the new territory. A new leadership is needed now in social policy and innovation. 

New technology makes it feasible to direct government funding across jurisdictions and portfolios into individual budgets, managed by a variety of agents, for the acquisition of individually tailored, person- and family-centred suites of services that fit the unique needs of each individual and family. In disability, aged care, chronic and mental illness, this is increasingly being done on the quiet in several Australian states. It is not publicised, by and large, for fear of alienating the powerful provider peak bodies who remain implacably opposed to  the funding of consumers, but it is proceeding, steadily, in all jurisdictions. 

Service providers who are innovative need have no fear of a shift in funding paradigm from providers to consumers. Consumers will still require supports, information, brokerage, and a myriad of specialist interventions, and responsive providers will prosper if they meet these needs creatively.

But the principal advantage of funding individuals and not providers is that it makes possible a re-invention of the third sector. The instinct for, and the practice of, voluntary association has been smothered by the managerial blanket for a long period. Voluntary association is an art, and if not practiced, is lost. Cultivating the capacity of people to associate with each other along horizontal rather than vertical axes is a task that can only be undertaken with, and between, individuals. It cannot be delivered by a service provider.

Voluntary association gave birth to the third sector; managerialism has all but killed it. Funding consumers, individuals and families, and not providers clears the decks for a re-investment in people and their capacity for association. It allows for a new generation of third sector activity to begin afresh. 

What might that look like?  

In 1908, residents in Altona, then an outer suburb of Melbourne, created a Bush Nursing Hospital in their community, funded by subscription from their own pockets. In 1960, the Victorian Health Department absorbed the small hospital into the public system (that seemed like good public practice at the time). In 1996, the Kennett Government tried to sell the hospital site to property developers (even as a survey was dutifully being conducted on local health needs by a lowly Departmental official). But deep in the psyche of the older residents were some residual memories: beds and equipment bought with donations from locals did, perhaps, belong in Altona; something funded by subscription shouldn’t easily be dismantled and the assets transferred to the other side of Port Phillip Bay. 

In 1999, Altona residents signed a contract (through an old-fashioned co-op they cobbled together) to purchase the hospital and site for redevelopment as a health and community centre, through a mix of commercial loans, corporate support, philanthropic investment, and yes, a local subscription.