The community and voluntary sector is the glue that holds our communities together. We feed the hungry, care for the ill and injured, provide necessities to those without, nurture the environment, educate, empower, and bring people together in a thousand ways.
The community and voluntary sector comprises about 115,000 organisations. According to Statistics NZ, the sector contributes about $8.1 billion, or 2.8% of New Zealand’s GDP. Volunteers work about 159 million hours a year, with the value of their voluntary labour estimated at an additional $4 billion. 150,000 paid staff and over a million volunteers work in the sector.
The sector has been historically underfunded and now our services are facing rising demands due to the pandemic and subsequent cost of living crisis. A lack of sustainable funding means we are struggling to meet the growing need in communities.
We rely heavily on government funding
• The aftermath of the pandemic and economic downturn have squeezed income sources including philanthropy, our ability to fund raise and sales of goods and services and
• Other sources of income such as Local Government funding are under heavy pressure due to pressure on the rates base and their own increased costs
• Many of the services we provide are funded or devolved from central government (such as care work and social services).
However government funding is often inadequate
• Often funding is only provided for service delivery and doesn’t cover basic and ongoing expenses (like premises and staffing costs)
• Costs have risen significantly without equivalent funding increases
• The sector struggles to pay skilled staff adequately with resulting recruitment and retention issues
• Funding doesn’t match need because of capped delivery, inadequate forecasting, in addition community organisations receive referrals from government agencies such as Te Whatu Ora and NZ Police without accompanying funding
• Many organisations continue to deliver services they aren’t fully funded for
• many organisations are relying on Covid bridging funding that will soon or has already expired.
And securing funding is too difficult, particularly for small or volunteer-run organisations
• Short term and rollover contracts with no CPI increases are common
• The grant application and reporting treadmill is complex and difficult and keeps organisations from their core mission and
• There is a lack of culturally-appropriate funding models including models suitable for Kaupapa Māori organisations and other diverse organisations.
Because of these factors, we are reaching a tipping point where many community and voluntary organisations are cutting back services OR are close to collapse.
Fixing the funding
We think that this crisis can be averted. Ahead of the General Election 2023, we are calling on all political parties to commit to implementing the following fixes with urgency when in government.
Commitment to sustainable funding practices
Funding agreements with government must have as standard:
• Multiple year funding
• A minimum standard margin for core operating costs of 35%
• Inflation adjustments should be applied throughout the life of the agreement
• Adopting a high trust model of funding, similar to what occurred with funding through COVID
• Fast tracking the social sector commissioning mahi
Making funding more accessible
• Further investment in sector capability funding (including peak bodies, grant capability, work with iwi and ethnic communities)
• Work with the community and voluntary sector to simplify grant application processes and outcome monitoring
Diversifying funding sources
• Work with Philanthropy NZ to develop an action plan to drive up philanthropic giving through incentives and education.