Gina Anderson | CSI Blog

2012 looks to be a defining year for the not-for-profit, social enterprise and philanthropic sector and Gina Anderson outlines why she is looking forward to the next 12 months.

I think it will be a defining year for the sector. I gave my forecast for the next 12 months some consideration over the break.

First: social policy and regulation reform. Slow, grinding and often – but so critical for systemic change. This has been at the forefront of the agenda for the past year and as a result, three big issues will have significant social impact in 2012:

1.    The introduction of National Disability Insurance Scheme (NDIS)

Most Australians assume that if people are born with a disability or acquire one later in life, that some system, somewhere, will take care of them. Nothing could be further from the truth. And, as the population ages, the number of people with a disability will increase. At the same time, the number of unpaid carers – family members and friends – willing and able to provide support will decrease.

The NDIS represents an urgent and fundamental reform to the way disability services are funded and delivered. It is a social reform on the scale of the introduction of Medicare and compulsory superannuation – two safety nets now taken for granted by every Australian.  Prime Minister Gillard has now identified the NDIS as a key Federal Government reform.  Visit the Every Australian Counts website for more information.

 2.  The establishment of a new independent statutory agency: the Australian Charities and Not-for-Profits Commission

The Australian Charities and Not-for-Profits Commission (ACNC) will commence operations from 1 July 2012 and will initially be responsible for determining the legal status of groups seeking charitable, public benevolent institution, and other NFP benefits on behalf of all Commonwealth agencies.

The ACNC will also implement a ‘report-once use-often’ reporting framework for charities. It will provide education and support to the sector on technical matters, and establish a public information portal by 1 July 2013.

3.    The introduction of the Pokies legislation.

‘The Federal Government has proposed gambling reforms which include “pre-commitment” technology that will require pokies players to have a card registered to their name and pre-programmed to prevent them losing more than a set amount in a 24-hour period.’

Other trends

Coupled with policy reform, the rise of engaged philanthropists such as Gates and Buffet and their interest in social investment are changing way we all think about social sector.  Established trends such as the move in expectation and measurement of not-for-profit practice from outputs to outcomes, and the realisation that we need multiple sector partnerships to solve our intractable issues, are being accompanied and supported by other trends. These are:

1.    Crowd funding or Micro-Philanthropy

As conventional fundraising struggles, increasingly charities and social enterprises will look to crowd-funding or micro-philanthropy (using the internet to solicit pledges of small amounts of money from individuals) to source money. This is often referred to as the “Obama effect” referring to the US President Barak Obama’s use of the internet to source small donations to fund his electoral campaign.

Importantly donors see their contribution as a ‘social investment’ rather than a donation and as most of these donations are small, the donors do not seek a tax deduction.  In this way donors at all levels are able to invest in social innovation – funding new ideas and processes that move or cause or organisation to greater sustainability, durability, impact, and scale.

2.    Blended capital

The use of blended capital will grow as social enterprises and charities seek finance and capital from outside the not-for-profit sector.  While many will continue to make grants or donations, others will use their capital for impact investing rather than giving a grant.

There will be loans and guarantees to non-profits and gradually, we will see the use of debt and equity instruments.  While others will directly invest in social enterprises seeking a ‘blended return’ on their investments – a financial return on their investments that may not be as high as other possible returns but will better align their investments and their social aims.

3.    Intermediaries

To support this new world of social investment we will see the growth of intermediary organisations and products for different ‘social investors’.

Social finance intermediaries play a crucial role in bringing together the key sources of capital with social businesses and there is a crying need to develop such intermediaries in Australia.

It is exciting time to be working in the not-for-profit sector and I look forward to 2012 with great enthusiasm.

Gina Anderson is the Philanthropy Fellow at the Centre for Social Impact (CSI) at UNSW. This blog first appeared on the CSI blog.