In the current funding climate for community service organisations, there is a lot of pressure to collaborate.

The introduction of the National Disability Insurance Scheme (NDIS), Aged Care “packaging” and Youth Services “recommissioning” are part of governments’ responses to the twin pressures on them to provide for more integrated personalised services and where possible, at cheaper or at least steady cost.

There is no doubt that individual care packages are a welcome change for many service users who want more choice in the providers they access. It’s also true that such arrangements are likely to be more responsive to individual needs.

For not-for-profit organisations that have traditionally been block funded by governments to provide specified community services, these changes are a challenge, since in future they will need to have service users choose to access their services from among a range of providers, if they are to secure their finances. Governments may still offer service agreements but this type of funding will be available for a limited range of services providers and be much less common in the future.

Just what the future holds for community services providers is not yet clear. The NDIS is being rolled out and the models of assessment, funding packages and service delivery are being trialled and rolled out in different States and Territories at different rates. What does seem clear is that governments around Australia are keen to reduce the numbers of organisations with whom they wish to contract for the delivery of funded services. This does not necessarily mean fewer service providers, but it almost certainly does mean fewer “lead agencies” with who governments deal directly.

All of the rhetoric is around encouraging service providers to work together so as to reduce duplication, obtain economies of scale and to build capacity by sharing resources and “know-how”.

Strategic assessment

In any strategic assessment about the future of an existing service provider organisation in the new “customer-directed-care” government funding environment, a careful assessment of the strengths, weaknesses, threats and opportunities of the organisation is essential.


Very honest and well informed answers to the following questions will help to build a picture of the likely future directions of the organisation:

  • What is the organisation really good at?
  • On what basis do we assess we are good at it?
  • What are our current services – will they be relevant in the new environment?
  • What are our “unit costs” for each type of service?
  • Are those costs competitive?
  • In what areas can we deliver those services at that cost?
  • Are there any ways of reducing those costs, without effecting quality?
  • What are our “indirect costs” per unit of service delivery?
  • Are there any ways of reducing those costs?
  • Could our “back office” services remain competitive with services expansion?
  • Are there any technologies that could reduce costs per unit of service delivery?
  • What do we do that others are better at than us?
  • Can we significantly improve our performance of these activities?
  • Which other organisations do these things better than us?

Weaknesses or threats

The following questions are designed to have the organisation address those aspects of their activities that likely to be weaknesses or threats in the new environment:

Area of operations

  • What is the economically sustainable area of coverage of our services? Is our area of operations too small on our own?
  • Who else provides services in the same or much the same area?
  • Which larger organisations provide the same service types in the adjacent areas?

Access to capital

  • How sustainable is your organisation?
  • How much untied financial reserves do you have?
  • Who are the “big players” in the region?
  • What is known of the intentions of the “big players”?

Relationships with government

  • Are you actively engaged in consultations with the relevant government funding agencies?

Strengths and opportunities

The following questions may assist organisations to identify those characteristics of their organisation that are likely to improve their competitiveness in the new government funding environment:

  • What is it about your organisation that would make it attractive to government funders?
  • Does your organisation have the organisational capacity and expertise to become a “lead agency” for the delivery of a range of services in the region in which you operate?
  • Does your organisation have a leadership team that is ready to explore all options for new relationships, both with the government officials and with the other providers with a view to finding new ways of providing integrated services?
  • Do you already have working relationships with other similar agencies?
  • Have you negotiated suitable agreements for working together in the event of winning a joint tender/contract?
  • Is your organisation “contract ready”?
  • Are you well informed about government timetables for offers and tenders?
  • Do you have the specifications of the service types that are likely to be approved?
  • Do you know the government’s selection criteria?
  • Do you have your unit costs already worked out?
  • Do you know who else in your region may be submitting?
  • Does your organisation have all the appropriate track-record, accreditations and other qualities that the funding agencies will be looking for?
  • Do you have quality systems in place?
  • Do your services staff have appropriate qualifications?
  • Do you have suitable risk management processes in place?

The answers to these question and other similar questions are likely to assist the organisation’s governing body and management team to make realistic assessments of the courses of action open to them in order to make a successful transition to the new government funding environment.

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