Not for profit organisations are now firmly embedded in the world of value add. Cross sector partnerships, flexible delivery platforms, innovation to meet consumer needs, multi point access to services and expanding the skill sets of staff to offer wider resources and expertise – value add has become the new norm for service delivery. Whilst these value add mechanisms have been a feature of service delivery for some time (employment agencies providing vocational training, aged care providers delivering health care, schools offering youth work initiatives), this approach initially grew through the innovation of staff members and organisations striving to improve service delivery at a grass roots level. Today, however, this approach is now a top-down requirement where value add is embedded in government funding requirements. These requirements dictate innovation, flexibility and the establishment of linkages to other programs, communities and mainstream services as key conditions of funding.

Value add, and in particular cross sector partnerships, are now a just as much a focus of organisations as the delivery of the primary service. The old program framework where organisations were funded to deliver a one dimensional service, and where reporting centred on a clean financial audit have long gone, together with the guarantee of funding of organisations for seemingly in perpetuity. Today, organisations need to win service delivery through a tender process. Funding is won, not granted, and it is a competitive game. Further, the expectation of organisations to report against quantitative and qualitative performance measures has changed the reporting landscape. There is a strong emphasis on the recording and reporting on the program/service outcomes in relation to impact on the individual, community and wider sectors and then to also include how the program benefits are impacting the mainstream economy.

With this more onerous approach to performance measures and competition to win, organisations need to decide: Should we tender? What are the risks? Can we afford to deliver the program? Will winning the contract send us into liquidation? With the risks associated in winning funding and the cost involved in meeting deliverables, organisations that choose to remain in service delivery must deliver professionally and at a competitive price point, while at the same time add value to the service by incorporate flexible and innovative services solutions and linkages, all while reducing costs.

Value add saves both state and federal government money through contracting organisations in a competitive tender process, by way of requesting organisations to focus on the wider goals of public policy and not just a tender to deliver the primary service to which the funding is allocated. To this end, governments want organisations to participate in the provision of holistic services, as stipulated in the tender. This approach ensures organisations detail linkages, partnerships and networking and other value adds into its tender that then form part of the contract of service delivery. This tender process contracts the winning organisation to deliver on the value adds, thus ensuring wider public policy and implementation of change is carried out by the service providers.

The implementation of public policy through the use of organisations saves the government time and money, and limits the political fallout of being seen to reduce the number of providers across the community and social sectors. The tender process injects the sector with a reality dose of economic sustainability with a raw hint of cannibalism. This method of tender ensures the government is overseeing a soft mechanism to force change in the sector.

This shift is changing the way organisations function, from Board level through to service delivery. Organisations must now allocate additional recourses to tenders, partnerships, data collection and reporting, rather than focus primarily on service delivery, and as such, savings must be made. Decisions on what to cut, reduce costs and assessing and accessing new funding streams may lead organisations to readdress its sustainability. There is a need for organisations to investigate and or pursue actions such as amalgamation, change of organisational direction/philosophy or wind up. In short the focus of organisations when looking to tender seems to fulfil the intentions of government, that is, ensuring a competitive price point, funding less organisations, and to deliver the same level of service but with the addition of value adds to fulfil public policy.

So what does this mean for carer organisations? Carers (consumers) have been and are supported by a network of organisations that are funded to deliver a number of programs related to counselling, respite, individual support and advocacy, inclusion and information provision. The current South Australian model has been in existence for some time, but things are changing. Carer organisations will now need to deliver a wider suite of services for carers and offer tangible linkages to community and mainstream services as well as deliver on other value adds. In theory, this is very positive and in practice there are benefits for carers through access to more information and stronger links with associated and mainstream supports. However, the flip side is that carer organisations will be more fluid in service delivery which has the potential to unsettle carers looking for a structured, standalone service offering a core (and seemingly) easily understood service.

The challenge for carer organisations is firstly to assess the risks to place itself in a position to win a tender, and then the organisation must have one eye on the carers’ needs and the other on the value adds. This two-eyed approach needs three eyes, and may be easier said than done.

Anthony Fogarty

Executive Manager Strategy and Operations