Philanthropic sector seeks action around social service funding gap

September 3, 2019

The philanthropic sector is calling on the Government to act after the release of a report showing chronic underfunding of essential social services.

The report estimates Government underfunds community organisations that it contracts to deliver vital services on its behalf, by about $630m a year.

Government is funding just under two-thirds of the costs of delivering the services. 83 per cent of social service providers rely on philanthropic funding to deliver the Government’s services.

Philanthropic funding is the biggest single contributor of non-governmental resource making up the shortfall. Public donations, service fees and investment funding make up the rest.

Social Services Providers Aotearoa (SSPA) contracted Martin Jenkins to produce Social service system: the funding gap and how to bridge it. Philanthropic and grant-making organisations and SSPA members funded the research.

Philanthropy New Zealand Chief Executive Sue McCabe said the philanthropic sector supported the research as it saw the impact of underfunding.

“Our sector is diverse, and different funders will have varied views and experiences of supporting the delivery of social services. A strong message from many philanthropists and grantmakers is that the current model of funding social services is unacceptable.

“Government fully funds our essential State Highway One network. Our question to Government is why is the provision of essential social services different?”

“The underfunding is inefficient as it means community organisations spend scare resource on fundraising just so they can deliver on Government contracts. This resource would be better directed to helping people.

“A serious impact of the underfunding is that staff in social service providers are underpaid and they work too hard. Another impact is that people are missing out on services essential for their wellbeing and that support their participation in society.

“The philanthropic sector currently works collaboratively with Government across all sectors on a daily basis around the country. We want to constructively work with the Government on this long-standing issue.

“We need to do this in a joined-up and transparent way for the good of those who work for social service providers and the people they help, rather than the current inefficient approach that burdens community organisations.”

Sue McCabe said there was strong support from many in the philanthropic sector for the report’s recommendations, including tangible steps in the 2020 Government Budget to close the gap.

“We want the action to start now. We know and appreciate that Government leaders are looking at ways to improve social service delivery. In light of this report, and in order for their recommendations to be workable, they need to meaningfully engage now with social service providers and philanthropy.”

The report can be found at:

https://www.sspa.org.nz/funding-gap

For comment you can contact:

Sue McCabe, Philanthropy New Zealand, 021 263 9639

Georgie Ferrari, Wellington Community Trust Chief Executive, 021 181 3400

Organisations supporting this release include:

J R McKenzie Trust

The Todd Foundation

Wellington Community Trust

Whanganui Community Foundation

TSB Community Trust

The Tindall Foundation

Trust Waikato

Vodafone New Zealand Foundation

D.V. Bryant Trust