CHAPTER 1 INTRODUCTION
1.1 PRODUCTIVITY COMMISSION RESEARCH REPORT 'CONTRIBUTION OF THE NOT-FOR-PROFIT SECTOR'
In March 2009, the Australian Government asked the Productivity Commission to undertake a research study into the contributions of the not-for-profit (NFP) sector with a focus on improving the measurement of those contributions, and on removing obstacles that might exist to maximising the delivery of services to society. The Report - Contribution of the Not-For-Profit Sector - was delivered in January 2010 (footnote 1).
The Report measured the contribution of the NFP sector using ABS and other data. In particular, the ABS Non-profit Institutions Satellite Account 2006-07, which brought together a range of data from ABS economic and social surveys, was a key source for the measurement of economic contribution. The satellite account provided financial and other data for broad groups of NPIs, and its availability was a major advance in the data for the sector. However, shortcomings were observed in terms of frequency, coverage, lack of detail and because it did not capture the wider social and wellbeing outcomes and impacts of NFP activity.
It noted that a range of administrative and other data might be used to extend or drill down in particular areas, but they were subject to various deficiencies including coherence and accessibility problems. Overall, the Productivity Commission Report considered that there is considerable scope for better measurement, while recognising that there are challenges, particularly when moving into the realm of outcomes and impacts measurement. The Report presented a Framework for measuring the contribution of the sector.
The Productivity Commission gave considerable attention to regulatory, financial and other reporting issues, particularly in the context of government funded service contracting. Evaluation measurement at the individual organisation or program level is often a requirement of contracts and is increasingly embraced for reasons of transparency, best practice in service delivery and for attracting donors.
In order to build better knowledge systems, the Report recommended that action is required on two fronts:
- Promoting national data systems - The Australian Government should initiate an information development plan (IDP) to address deficiencies in the availability, timeliness, scope, quality and accessibility of data needed to better measure the contribution of the NFP sector. The ABS should have responsibility for formulating the plan. (Recommendation 5.1.)
- Building a better evidence base for social policy - Australian governments should adopt a common framework for measuring the contribution of NFPs and implement a reform agenda for reporting and evaluation requirements for organisations involved in the delivery of government funded services. A new Centre for Community Service Effectiveness should be established whose functions would include a portal for the lodgement and dissemination of evaluations information and the promotion of best practice in evaluation and service delivery. (Recommendations 5.2, 5.3 and 5.4.)
It does not appear that the ABS would have a lead role in this second aspect of work, although it has a supporting role to promote the use of good statistical practice through its leadership of the National Statistical Services (NSS).
Productivity Commission Recommendation 5.1 states:
“The Australian Government should initiate an Information Development Plan for the not-for-profit sector. Given its central role in providing data on the sector, and its legislated responsibility for statistical coordination, the Australian Bureau of Statistics should be given responsibility for formulating the Information Development Plan.
Among the issues the Information Development Plan should address are:
- the appropriate frequency for publication of the satellite account on the sector
- the scope to develop administrative and other longitudinal data sets to support the analysis of net impacts of sector activities
- the collation of the information from these and other data sources to provide a more detailed assessment of the contribution of the not-for-profit sector over time
- the feasibility of obtaining accurate estimates of the number of unincorporated not-for-profit organisations in a cost-effective manner.”
(Productivity Commission Report 2010, p.98)
The Productivity Commission sets out what an IDP should aim to achieve on page 98 of the Report:
“The purpose of an IDP is to provide a coherent strategy for future statistical data development and research relevant to the sector. An IDP identifies ways to improve the scope and coverage of current data sources. The IDP must also identify areas where data standards are needed, who should be responsible for their development, and how they should be implemented. This is particularly important for administrative data sets where there tends to be more than one custodian. Through consultation with stakeholders, the IDP identifies gaps in the data, and other deficiencies, and recommends appropriate responses. It also identifies the extent to which existing data and information sources can be put to better use. Finally, the IDP must set out how information on the sector’s contribution is reported. What gets reported, the reporting format and medium, and its frequency depends on what information is valuable to the NFP sector stakeholders.”
The Productivity Commission Report made recommendations on a range of issues related to regulation and to improve the functioning of NFPs. While the ABS would not appear to have a direct role in these, a number of the recommendations, if implemented, would have important implications for the development of information for the sector. The report proposed:
- the creation of a Registrar for Community and Charitable Purposes that would have a number of functions, including the registration of NFP companies limited by guarantee and Indigenous Corporations, and the assessment of NFPs for Commonwealth tax concession status. It could also provide a single reporting portal for legal reporting requirements, including financial reporting.
- that the Australian government adopt a statutory definition of charitable purposes in accordance with the recommendations of the 2001 Inquiry into the Definition of Charities and Related Organisations. Although not part of the Productivity Commission recommendations, there would also need to be consensus around the definition and scope of NFPs that are subject to statistical measurement.
- that the Department of Finance and Deregulation develop a common set of core principles around government service contracting and other funding of NFPs in consultation with relevant government departments and service providers (Recommendation 12.8).
- that the Australian Government establish an Office for Not-For-Profit Sector Engagement. One of its roles would be to promote the development and implementation of the IDP. (Recommendation 14.1.)
This Draft IDP has been produced in response to the Productivity Commission's recommendation 5.1. The objectives envisaged by the Productivity Commission have been met to the extent possible with available resources.
The IDP aims to:
- present known metadata on currently available statistical information
- discuss gaps in available information and other statistical issues
- present a draft plan for future data development that could be used for discussion and negotiation with stakeholders.
The work was informed by the material already assembled by the Productivity Commission, by ABS research and experience in collecting information on NPIs and volunteers and by discussions with a limited number of Commonwealth and State governments, NPI sector peak bodies and academic institutions.
The extension of the statistical framework to include social indicators of outputs, outcomes and impacts is in its infancy. Substantial work would be required to investigate and develop the framework to scope what is feasible and what data are required. It was not feasible to do this in the context of this Draft IDP.
In recognition of the importance of data development work for the sector, the ABS is willing to work with other agencies to explore sources of funding.
There are a number of terms in use for the sector, most of which do not have a precise definition. Although the Productivity Commission has used the term ‘Not-For-Profit’, the term 'Non-Profit Institution' (NPI) will be used in this IDP to be consistent with the terminology and meaning in the United Nations "Handbook on Non-Profit Institutions in the System of National Accounts". When referring to or quoting the Productivity Commission Report and other sources, the term ‘Not-for-Profit’ or other terminology is retained.
Statistical collections require tight definitions and consistent terminology to define the target population. Section 2.4 of this IDP addresses the issue.
1 Productivity Commission 2010,"Contribution of the Not-for-Profit Sector
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