Why do we need a Code?
Most non-profit organisations receive no government funding. But for those that do, managing the diversity and complexity of funding arrangements requires technical and relationship management skills from funders and non-profits. Demands on both parties create the potential for tension. On the one hand, the requirement on government agencies to ensure the best use of taxpayer funds for public benefit drives funder behaviour. Against this, non-profit organisations exist to fulfil their mission. Their non-dividend distributing characteristics distinguish them from market organisations and for many, the disciplines and demands of contracting have the potential to diminish their mission-driven motivations.
In developing this Code of Practice, we drew on the combined experience of officials and non-profit organisations and over a decade of work by all parties to make contracting and grant-making more productive.
In recent years, government and the non-profit sector have sought to make ’outcomes‘ or ’results‘ central to planning. Given that we cannot easily contract for an outcome, it becomes critically important, therefore, that the funder and non-profit organisation share a complete understanding of two central ideas.
First, what does the government expect for the use of public funds (‘public resource for public benefit‘) and the accompanying accountabilities? Second, what does the non-profit organisation expect to achieve in relation to its own goals or mission, and its accountabilities and mandate? Non-profit organisations exist for a social purpose or mission. In order for the motivation of government and non-profit groups to coincide in a shared understanding, both parties must invest sufficient and proportionate time and energy in clarifying the goals of the contract or grant. Achieving ’a shared outcome‘ or common purpose is essential.
