Faith-Based NGOs in the Australian Welfare Economy

Church-affiliated or ‘faith based’ organisations (FBOs) occupy a major role in the Australian welfare services sector. Their sense of mission and core values of achieving social justice for the needy and vulnerable in society animate these organisations in the provision of social services to individuals, families and communities around Australia. In contemporary times, the sector stands at a critical juncture, with uncertainty surrounding its future, identity and integrity, as funding practices push FBOs towards both corporatisation and secularisation. Despite wanting to outsource welfare services to the community sector and FBOs, governments rarely appreciate the unique value-add offered by the FBO sector in planning frameworks, as suggested by the Shergold Review. Facing uncertainty and pessimism, the sector must rediscover its core mission and values, and advocate for the conditions necessary for it to fulfil its potential as a high-quality service provider and community asset. This essay will examine the development and role of the FBO sector in Australia’s welfare economy, before analysing the unique value of the sector and challenges it faces. Through this analysis, this essay will identify the conditions necessary for the survival and success of the FBO sector, offering tentative suggestions for a way forward.

Contemporary Situation and Historical Origins

Faith-based organisations, or FBOs, play a major role in Australia’s mixed landscape of welfare services. NGOs provide over half of all welfare and social services in Australia, with church-affiliated organisations essential to this provision (Oslington, 2015: 80). Of the 25 largest charity organisations in Australia, 23 are directly associated with Christian churches (Crisp, 2014: 101). The Australian Charities and Not-for-profits Commission reported in 2015 that faith-based organisations are ‘by far the largest single category of charities in Australia,’ with 12,253 NGOs reporting ‘advancement of religion’ as one of their charitable purposes, collectively employing over 133,000 staff and utilising the services of at least 467,000 volunteers as of 2013. However, this is considered a significant underrepresentation of actual figures, as a large number of faith-based and church-affiliated organisations did not report ‘advancement of religion’ or ‘religion’ as among their activities. The real size of Australia’s FBO sector is therefore much larger, and difficult to measure. Cleary’s 1994 study of Catholic human service agencies in Australia, for example, estimated that in the Catholic sector alone there were at least 130,000 paid employees. The 1995 Australian Industrial Commission (IC), despite failing to differentiate between faith-based and secular NGOs, reported that the largest social welfare organisations in Australia had ‘church sponsorships going back to the last century.’ Australian FBOs deliver services relating to emergency relief, housing and homelessness, health, mental health, education, community development, advocacy, research, income support and other ‘social services,’ covering a wide and diverse range of community welfare needs.

The historically large role of FBOs in welfare provision in Australia has its origins in colonial times and British middle-class disdain for the ‘Poor Laws’ system, with welfare receipt seen as undignified and demeaning. In the ‘working man’s paradise’ of Australia, where wages were high and employment abundant, widespread belief in the entitlement to work in the ‘wage earner’s welfare state’ diminished belief in the entitlement to welfare (Murphy, 2006). As such, the colonial governments in Australia and New Zealand deliberately tried to keep formal welfare at a minimum, hoping to produce ‘a new world without welfare.’ For those without access to a wage, provision of emergency relief fell to voluntary organisations such as the Ladies Benevolent Society, the Charity Organisation Society, or the Brotherhood of St Laurence. The experience of the 1930s Depression made clear the necessity of state intervention in welfare provision, and the post-war period was characterised by the growth of the Australian welfare state. This centralised assumption of responsibility for welfare by the state in this era was, however, a historical exception, and was not to last. The neoliberal policies of the Howard Government that saw so many welfare services outsourced to churches and FBOs were ironically reminiscent of the early Australian tradition of ‘practical cooperation’ between the state and the churches.

Regardless of the debates surrounding the rightfulness or justification of this arrangement, the history of Australian colonial society established the path trajectory for our modern mixed economy of welfare. Commonwealth and State governments have demonstrated bipartisan approval of this arrangement, with the Rudd-Gillard Government increasing funding and the freedom to advocate for the NGO sector, while conservative governments have increased the practice of outsourcing although in a less supportive framework. However, various leaders in the FBO sector have decried that modern purchaser-provider funding contracts have led to a competitive race among FBOs to corporatise, professionalise, amalgamate, and diminish service quality (Nicholson 2014; Smyth 2014). Together with causing loss of religious identity and mission for FBOs, and loss of volunteers and motivated staff, this trend threatens to usher in a dominance of ‘supersized welfare business, for-profit in nature’ (Nicholson, 2014) in contracted welfare provision to the exclusion of smaller FBOs. Beyond the loss to the FBO sector itself, this change would inflict upon society the loss of the unique value-add that FBOs offer to individuals, communities, and civil society in the provision of welfare services.

The Unique Value of the FBO Sector

In assessing the ‘unique value’ or ‘value-add’ of the FBO sector, we examine what positive value the FBO sector can offer that the market and state cannot, and also that which sets it apart from secular welfare NGOs. The value-add of the FBO sector differs depending on perspective (‘value to whom?’), whether value to the state, to individual clients, or to civil society. Accordingly, this analysis of the value-add of the FBO sector will be conducted across three perspectives: the value to the state (budget savings and transferral of risk/responsibility); the value to clients and service users (more motivated and compassionate staff, higher quality services, positive relationships), and value to communities and civil society (community development, social capital, better democracy, etc). Underlying these different sources of value, however, is a common denominator: the spiritual — or theological — identity and mission of these organisations.

Many faith-based social services organisations are motivated and animated by elements in their religious traditions that emphasise social justice and service to the needy. Anglicare Australia, for example, state on their website, “[God’s] love, shown to us in the life and death of Jesus Christ… motivates us to meet the physical, emotional, social and spiritual needs of others,” and that “Our faith in Jesus Christ compels us to act with compassion, help the vulnerable, and be a voice for the disadvantaged.” In the Christian tradition at least, a duty to care for others, to volunteer one’s time and service for others, has its origins in the text of the New Testament, and is taken to heart by many believers. The capacity for religion to attract and motivate volunteers is well documented: studies of volunteering in Japan and the United States show a clear positive correlation between religion and volunteering, i.e., that religious individuals were more likely to volunteer in the community than non-religious members of the same society (Park & Smith 2007; Taniguchi 2010). As a result, FBOs are able to draw upon the efforts of motivated volunteers and staff who share the values and beliefs of the organization are also likely to be powerfully motivated by their beliefs in their work. Professional staff are less likely to be specifically religious, but usually share in the core values of their organisations and draw inspiration from their values beliefs, if not spiritual beliefs.

With this in mind, we may consider why governments would want to outsource social services to FBOs in Australia. Outsourcing welfare services provision to FBOs is often cheaper for governments than providing these services themselves. For example, by outsourcing the Job Network employment services to the FBO sector in the ’90s, the Howard Government saved up to a third of previous operating costs for the Commonwealth Employment Service. There are arguably greater incentives for private organisations, including FBOs, to manage scare resources efficiently and innovatively compared to the state, as the organisations’ funds are usually at stake, and ‘links between managerial incentives and the bottom line are stronger in a privately owned organisation than in the typical government bureaucracy.’

Governments may also want to outsource to FBOs or the NGO sector as a means of avoiding responsibility and risk. Failures can be deflected to the service providers rather than the government, and the government has less need to invest in service innovation. The existing infrastructure of church organisations also allows governments can ‘free load’ on existing church buildings, membership, databases, training, etc., with costs involved in investing in human capital in the sector born by FBOs themselves. These political and financial advantages tie in with neoliberal beliefs that “the default position of government should be that services are likely to be most effectively implemented by non-government providers” (Shergold 2013:20).

For individual clients and service users, FBOs tend to provide more compassionate and ‘humane’ treatment than government welfare departments, and are less judgemental in practice and disinclined to issue sanctions. Clients and staff interviewed in Reeves’ study of eight NSW FBOs reportedly ‘felt that Centrelink treated people like numbers, whereas [the FBOs’] really cared for people at a deeper, more personal level’ (Reeves 2010: 116). Others refer to FBOs as being more capable of providing ‘personalised and friendship-based’ care to clients which may be more conducive to long-term change (Melville & MacDonald 2006: 77). Of this sort of care for clients, Wuthnow (2004) suggests ‘it is probably their ability to forge encompassing whole-person, personally transforming relationships with clients that accounts for any special success [FBOs] may have.’ In the case of community-based and grassroots FBOs, these organisations are in an ideal position to assist clients in participating in their communities and accessing social capital. The primary benefits to clients are therefore access to services that are oriented towards the wellbeing and dignity of the human person at their centre and therefore offer care that tends to be more personal, holistic, compassionate, and relationship-based.

FBOs also offer a significant positive value-add to civil society and communities in general, as hubs of social capital, and vehicles of democratisation. FBOs transmit and advocate for important values within their communities, acting as ‘civilising influences’ in public discourse, while contributing to social cohesion. Grassroots organisations and FBOs also strengthen civil society and democracy, particularly through advocacy work. Strong civil society can also contribute to stronger and higher quality democracy and less corruption. The important place of FBOs in Australian grassroots civil society movements can be seen, for example, in the Victorian Refugee Advocacy Network, with a large number of church-associated or religious organisations among its coalition of NGOs, unions, associations and FBOs.

Limitations to the FBO Sector’s Value

Funding contracts introduced by the Howard Government in the late 90s were notorious for their non-advocacy or ‘gag’ clauses. These clauses made receipt of funding dependent on an agreement by organisations to not speak to the media without explicit approval from the relevant Minister’s office, and to not criticize government policy or advocate for law reform. Melbourne City Mission CEO Ray Cleary stated in 1999 that such practices “eat at the very heart of the mission and the value base of church-based agencies, which are there to demonstrate God’s preferential or special interest for the marginalised and those at risk” (Ray Cleary, interview on ABC Radio National, 24 March 1999).

In 2013 the Rudd Government passed the Freedom to Advocate Act, prohibiting gag clauses in Commonwealth funding contracts. Nonetheless, the Queensland Newman Government reintroduced gag-clauses into many NGO funding contracts, and the Abbott Government stealthily reintroduced gag-clauses into funding contracts for community legal centres. It is therefore evident that conservative governments may wish to both outsource the burden of social services to FBOs, while also acting to stifle their voices and discursive policy input. Such silencing undermines the value of FBOS to communities, but also to individuals, robbing FBOs of their power to advocate and speak up for the needs of their clients.

Purchaser-provider funding agreements and competitive tender processes push FBOs towards corporatisation, entailing professionalisation, agglomeration, and secularisation. These trends reflect the transition of a welfare agency from a community-based local organization to a large, corporate agency, depersonalised and delinked from community, and with fewer and fewer traces of original mission and spiritual identity. When this occurs, the unique value-add of the FBO sector is again compromised for clients and communities. As organisations become large, they become increasingly detached from their local communities; as they become impersonal and bureaucratic, organisations’ capacities to offer personalised, relationships-based services are also reduced. The loss of religious identity and mission is also a HR challenge, as this reduces the appeal to volunteers and many staff.

This trend was exemplified in 1999 with the outsourcing of the Job Network, and further contracts issued since. Many FBOs, which had up until then been small and grassroots in nature, had the opportunity to receive large amounts of funding in return for professionalising and taking on services for the government. This trend incentivised organisations to expand, merge, and professionalise. This presents a double-edged sword to many FBOs, as increased funding is attractive to organisations for many good reasons, including staff salaries and the nature and scope services that can be offered. However, the further than organisations drift from their faith-based and grassroots community origins and affiliations, the more they become like secular NGOs and welfare agencies, and lose the unique value they add as FBOs in themselves. Such organisations, secularised and corporatised, may lack capacity to resist when their values foundations are compromised, and risk becoming absent from public discourse and losing their role in advocacy and policy work. This is even riskier under conservative governments that actively attempt to stifle the sector’s discursive contribution.

Competitive government tenders for funding and service delivery contracts now mean that FBOs, and other NGOs, must compete with one another to offer better services more efficiently. This severely weakens the value and strength of FBO community networks, with competition leading to the breakdown and diminution of previous cooperation, especially in the loss of information-sharing. This undermines the value that FBOs offer to communities, as both members of local communities and in the context of a ‘network’ of NGO/FBO actors.

Discussion and Conclusion

From our analysis it seems clear that the main value-add offered by FBOs to governments is at odds with the value-add offered by FBOs to individual clients and communities. The opportunity to cut costs and transfer risk and responsibility, taken up by governments subcontracting services to FBOs, leads to funding practices and systems that damage the FBO sector and undermine (or negate) the unique value-add that the FBO sector offers to clients and communities.

With abundant volunteer labour and hard working staff, motivated either faith or a strong set of altruistic values, FBOs with a strong sense of identity and mission have much to offer. In their provision of services, they tend to be less discriminating and more compassionate in treatment, helping to integrate and engage clients in their communities through authentic relationships and social connections. The quality of services and care from FBOs then reaps further dividends in quality of outcomes for clients and society at large. As hubs of social capital and connections, FBOs strengthen both democracy and the civil society sector, and represent important values in public discourse and can drive community development. However, the sector only possesses the capacity to fulfil these roles when it is firmly rooted in both a values orientation (which may be explicitly theological, or a broader ‘commitment to social justice’ or other values) and in the authentic social connections of the grassroots local community.

Funding practices such as purchaser-paid contract agreements, wherein the government pays for the delivery of specific services within a tight regulatory framework as opposed to annual ‘core funding,’ are usually issued through tender processes. The result of these tenders is that FBOs and other NGOs must compete against each other for funding, and are pushed to therefore professionalise, expand, and merge. Usually they must either secularise or become increasingly distant from their ideals and values-orientations. The result is that FBOs lose what previously attracted volunteers to them, along with motivated skilled staff who were willing to tolerate lower salaries due to their sense of duty or ‘charism’ they found in their work. They also become increasingly detached from authentic grassroots communities and the social connections and networks of the civil sector, especially when they need to compete against other NGOs for funding. The threat of gag clauses stifles the voices of the sector in public debate and discourse. All of these influences damage the capacity of FBOs in respect to their unique value to clients and communities as outlined above.

That the FBO sector in Australia faces an existential threat in Australia is no secret. In order for the FBO sector to flourish and continue to provide that which it has to offer — that which distinguishes the value of the sector from both other NGOs and the state and private sectors in welfare provision — it must fight for the conditions necessary for its flourishing. It must use whatever means appropriate — perhaps even industrial action — to fight and advocate for better funding paradigms, such as co-operative rather than competitive service delivery. An alternative funding paradigm must be sought that allows FBOs to remain high quality but not be forced to merge and corporatise.

The sector also must undergo considerable ‘soul searching’ and reflection on its own ecclesiology and missiology. It must ground and re-orient its mission and activity in a strong sense of values, purpose, worldview, and/or faith. A strong identity and sense of mission, animated and motivated by convictions and beliefs, is what the FBO sector has drawn power from all along, and must be rejuvenated in order for the sector to thrive in the future. Additionally, the threat of non-advocacy or gag clauses in funding contracts is particularly insidious for FBOs who advocate for the vulnerable, poor and needy from a deep sense of moral responsibility. The sector must fight hard against non-advocacy clauses and other means used to gag NGOs, potentially using industrial action and broad-based grassroots activism if necessary. Perhaps the influence of the major churches could be used more effectively in politics to enhance the capacity of the FBO sector.

Altogether, it is clear that the FBO sector plays a very important role and has much to offer. However, its capacity to offer special value to communities and clients relies on the fulfilment of certain conditions. Certain funding practices used by governments have the effect of gagging the sector or forcing it to corporatise, which undermine the value of FBOs to clients and society. Accordingly, the sector must work hard to ensure in future the necessary conditions required if the FBO sector wishes to survive. If necessary, the sector must engage in activism, industrial action, advocacy and policy debate needed to ensure its continued capacity to provide special help and care to individuals and to strengthen communities.