The non-profit sector
Worldwide, governments are looking increasingly to third parties (community and the market) for service delivery and to achieve policy goals. At its best, the non-profit sector has the potential to tackle some of society’s most entrenched challenges. In the last decade, government funding of the non-profit sector has grown to over $3 billion annually for services and activities as diverse as aged care, mental health, care and protection of children, sport, the arts, conservation and international aid. Funding arrangements for these activities range across a continuum from highly specified services negotiated across a sector, to grant-aid for collaborative arrangements to support community outcomes.
As an independent part of society, non-profit organisations are set up to meet a social purpose. The New Zealand non-profit sector contributes 4.9% to gross domestic product. It employs over 200,000 paid staff and volunteers across a diverse range of activities from sport and the arts to social services and the environment. International trends suggest growth in non-profit sector activity as New Zealand emerges from the recession. Communities will seek to develop their own solutions to issues that affect their lives and will look to the government for assistance.
Although the general principles of the Code may apply to a wider range of funding arrangements, the Code is primarily aimed at the funding relationships between government agencies and the non-profit sector. The Johns Hopkins Comparative Nonprofit Sector Project (2006) uses the following structural-operational factors to define a non-profit organisation:
- organised membership
- private, that is, not of government
- non-profit distributing
- self-governing
- non-compulsory.
Such factors are common to many organisations set up for specific social purposes. These purposes motivate organisations across all their primary activity areas from social services to health, from sport to education, and international aid to conservation. Statistics New Zealand uses these criteria to define New Zealand non-profits in the Non-profit Institutions Satellite Account.2
Many iwi/Māori organisations meet these five criteria. In terms of the non-compulsory criterion, the New Zealand Committee for the Study of the New Zealand Non-Profit Sector noted that, in some cases, membership of these organisations derives from birthright, often accompanied by a sense of cultural obligation.3
2 Statistics New Zealand. Non-profit institutions satellite account: 2004. Wellington, 2007.
3 Tennant, M. et al (Ibid) and Sander, J. et al. The New Zealand non-profit sector in comparative perspective. Wellington: Office for the Community and Voluntary Sector, 2008.
