Contribution of NFP's recognised - how about some pay equity?

The recent release of the Productivity Commission's report on the not-for-profit sector has revealed the huge contribution that the sector makes to the Australian economy and society, but has also sparked a great deal of debate.

The Commission was asked by the federal government to look at the contribution made by the non-profit sector to the national economy, and at anything that may be affecting its development.

And even if you're working in a not-for-profit job, the results might surprise you (one of the findings is that the wider community's understanding of the sector's role and contribution is poor!).

According to one of the Commissioners who wrote the report, "Australia has 600,000 not-for-profit organisations which contributed $43 billion to Australia's GDP, growing at an annual rate of 7.7 per cent since 2000. If you count the contribution of 4.6 million volunteers, with an imputed value of $15 billion, this would make it a similar contribution to the retail industry."

But for those working (or wanting to work) in the sector, probably the most important findings are around the pay and conditions for non-profit staff and volunteers, which the Commission wasn't too impressed with.

The report found that in organisations delivering community services, staff and volunteers face increasing workforce pressures (including pay discrepancy), increasing qualification requirements, rising human resource costs, increasing costs associated with meeting variable governmental reporting requirements, staff burnout and lack of career paths.

Here's some of the other findings:

• For NFPs, less than full cost funding of many services has resulted in substantial wage gaps for NFP staff. The challenges in retaining staff threaten the sustainability and quality of services. Greater clarity about funding commitment is an important step in addressing these issues.
• Volunteers play a critical role in delivering NFP services but rising costs are affecting the viability of their engagement. Streamlining of mandatory vetting requirements and investigation of portability between agencies and across jurisdictions would reduce one source of costs.
• The efficiency and effectiveness of delivery of services by NFPs on behalf of governments is adversely affected by inadequate contracting processes. These include overly prescriptive requirements, increased micro management, requirements to return surplus funds, and inappropriately short-term contracts. Substantial reform of the ways in which governments' engage with and contract NFPs is urgently needed.

While non-profit jobs also have other sorts of rewards for those that do them, this is still an unacceptable situation.

To remedy some of these problems and to help with workforce retentionthe report recommends the government increase community service base funding so that wages can be paid at market equivalent rates:

In order to ensure that not-for-profits can sustain their workforces, and as wages are a major factor in the successful recruitment and retention of staff, Australian governments purchasing community services need to base funding on relevant market wages for equivalent positions. Costings need to take into account the skill sets required to perform the purchased services and be indexed appropriately to market wage growth within that industry sector. (Recommendation 10.2)

This would be a huge step towards pay equity for ethical jobs. The report highlights the vital work the sector does and acknowledges the lack of recognition it has in the wider community. Hopefully, the report and its recommendations will help to increase the profile of not-for-profit jobs and ring about more equitable remuneration for the sector.