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Not-for-profits must adapt as one arm of government’s ‘three-sector solutions’

John R. Butcher writes in The Conversation (24.3.17) that governments have come to realise that no one sector acting alone has the capacity or capability to solve complex social policy problems.

‘Governments once had a virtual monopoly over the delivery of public services in Australia. But, during the past two decades, Australian governments – both state and federal – have retreated from direct service delivery.

‘Australia now has a mixed economy of service provision. Governments procure a wide variety of public (that is, government-mandated and funded) services that are delivered under contract by external, non-government providers.

‘Not-for-profit providers tend to predominate as providers of contracted human services, particularly in areas like disability, employment support, support for youth and families, poverty alleviation and community housing. This is due to their long experience working in these sensitive and complex policy spaces, and because governments are keen to leverage the legitimacy, trustworthiness and social capital they embody, as well as their lower operating costs.

‘For-profits are less engaged in human services markets, partly owing to lower profitability.’

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