Saturday, March 21, 2009

Is Alberta's Not-For-Profit Voluntary Sector Doomed?

The not-for-profit (NFP) voluntary sector in Alberta faced some challenging and changing financial times in 2008 but nothing like they are likely to face in 2009.

A recent survey comparing 2007 and 2008 NFP revenue sources and program demands has some interesting and disturbing trends, especially if we project into the emerging recession reality of 2009.

In 2008 51% of the sector sustained the same level of donor support but that is definitely not the 2009 expectation. Calgary and Edmonton have the highest expectations of support retraction and are likely to face the largest growth in social service demands in this recession.

There is a lower expectation of government contracts, a major source of some service agency revenues. These are likely to be reduced as the province deals with its own declining revenues from resources and taxes. That means the NFP sector will seriously suffer further decline as this semi-substitute for core funding dries up for many of them.

The NFP community based voluntary sector is responding with 57% of them hoping for new funding sources in 2009 – Good luck! Others (53%) think they can squeeze the nickel even more to meet the continuing and growing shortfalls – Good luck! In the 30% range is a group of agencies who hope to use a combination of reduced staffing, program or shared services to cover the gap. Doing even more with less in an already seriously stretched sector is potentially dangerous. This is particularly true for those social service agencies who are under staffed and dealing with vulnerable clients like kids-at-risk, seniors and the disabled. People are going to suffer and get hurt.

How is it possible to meet increasing demands with declining resources? The impact of the recession shows that the NFP social services sector believes that demands for its services will increase over 70% in 2009. Estimates show that health service demands on the sector are going to be up over 50% so how does staffing stretching and program cuts make any sense? This is a recipe for disaster and burnout in this vital social services sector.

If government was smart and strategic they would realize this NFP community based voluntary service sector is the best and most effective program provider. It is also a prime source for fiscal leverage to meet most of the local social pressures being caused by the recession. They should be adding fiscal and other resources into these NFP community-based volunteer supported local agencies in times of recession. That is the best way to ensure local needs have responsive and reliable program design and competent agencies with the capacity to meet the increased local demands.

There is a catch to achieving this that goes beyond more money. Volunteers are not easily controllable, particularly from the top down. The sector is prone to caring, resourcefulness, innovation and adaptability, especially if they are encouraged and enabled. To be most effective this sector must be freed up to use those strengths, wisdom and professional talents to the best of their abilities. They ought not be burdened with fiscal fears, administrivia and even intimidation as happens in some cases these days.

Unfortunately we see an emerging governing philosophy that is increasingly driven by dollar tracking accountability measures and a hardening of the auditors approach. A focus on effective outcomes for people needing services gets lost in this kind of narrow accountability culture.

We have evolved from the days of debt and deficit slaying into a fiscal accountability model that seeks to know how to track the cost of everything. In the process the system tends to ignore the real value and any meaningful evaluation of program service outcomes for citizens. Those in need also become victims in this new narrow accountability culture.

The community based social services sector has proven that it can deliver good results. They do not always fit nicely into prescribed and pro forma program accountability models that are designed mostly to make auditors happy but not necessarily serve the clients or the community. We need a balance but I fear we are not headed in that direction and the policy pendulum is swinging and shifting...perhaps too far.

To make matters worse, the individual agency volunteers, those folks with the heart, energy and courage to deal directly with addressing local social issues and pressures are facing burnout, policy backtracking and the harmful effects of funding shortfalls. My speculation is that the pending GOA budget constraints are going to cause the dismantling of many of the community based volunteer agencies as they just give up and close their doors. Those that survive will see fundamental changes in their roles and relationships with government and with clients.

I am speculating but I would not be surprised to see a new GOA fiscal, command and control approach, institutionalized within government, thereby causing the demise or forced amalgamation of a bunch of NFP volunteer community-based service provider agencies. That may not be a totally bad thing so long as we do not lessen the overall capacity of locally based not-for-profits to serve their communities needs effectively.

I suggest we may even see big changes and the possible dismantling of some of the government appointed Agencies, Boards and Commissions (AB&Cs). Because some of them are no longer needed while others are ineffective and should just go. My concern is, as a consequence of some shortcomings in some AB&Cs, especially in the social services sector, that may hasten the end of many community-based volunteer supported NFP service provider agencies. If this happens it will be politically justified in the name of fiscal efficiency and auditor-type accountability demands. Such justifications will discount any necessity for improved program performance, service delivery systems and enhanced client outcomes due to the recession.

For example, remember the Calgary Health Authority governing board? It was consistently out of control, over budget and demanding perpetual bail outs from the province. Instead of just changing the Calgary Health Authority the GOA dumped and disbanded all of the local health authorities across the entire province and put in a single Super Board to run things.

I personally think that is a good precedent to follow in terms of some other regional governing board structures like those in Children’s Services and Person With Developmental Disabilities. This is because they, like the old health authorities, have delegated authority, power and influence, but they seem to be more of a buffer that protects the government from the realities of the rabble rather than being locally astute and effective policy advisers to Ministers and departments.

There has been a thorough and independent review of Alberta's system of governance covering all of the appointed AB&Cs. There are changes coming in their governance structures as well with a new Bill 32 that has been recently tabled in the Alberta legislature. Since these AB&Cs spend about half of the annual provincial budget and there is a need to cut costs, I expect their will also be fiscal changes imposed on the AB&Cs in April 7th Budget too. I anticipate the coming provincial budget will also require more policy alignment of the AB&Cs with more fiscal and program delivery transparency, accountability too. All worthy endeavours for fiscal efficiency but that should not trump program and policy effectiveness. We need both.

I also expect there will be more fiscal pressures put on the NFP community-based voluntary sector for the same reasons. There will be pressures for agency consolidation and even elimination in some cases. There are about 19,000 registered NFP groups in Alberta engaged in a wide range of activities. In the end, I'm betting there will be fewer of these community-based volunteer not for-profit groups in the province by the end of 2009.

The end result will also see more centralized funding approvals with more program design and delivery decisions being made in the provincial bureaucracy level. Those functions will likely be brought back into the direct control of provincial government departments and become even more rigid and rule bound than before. This will be politically justified as part of the journey towards more fiscal prudence and accountability for taxpayer dollars. My guess is many social program outcomes and effectiveness will suffer along with the vulnerable Albertans who depend on those services.

These changes will put the local MLAs in the direct line of fire. They will be expected to personally get the government support needed and to get things done in their local constituencies and communities. They will have too know much more, and in more detail, about the local social needs, trends, implications and consequences as the recession impacts grow and deepen. They will have to be more activist, engaged and representative of their constituencies to the government and not from the government.

MLAs will have to become the overt and activist champions within the government to get the provincial resources needed to address the local social needs of their constituencies. Bottom line, political success will be measured in how well MLAs deliver the government resources needed to resolve the various concerns of their constituents. The competition amongst MLAs for limited and declining provincial resources will be fierce. I'm betting that caucus and committee meetings will be more volatile and differences will be more personal amongst politicians.

The Lobbyist Act is scheduled to be finally proclaimed in November and the regulations are to come into effect then too. It will set the rules of the game for the NFP voluntary sector to pressure their MLAs to better understand, deliver and to satisfy local needs. I think the Lobbyist Act will not inoculate the local MLA and Ministers from feeling some profound political and public policy pressures coming from local citizens and community interests groups. I think The Lobbyist Act will actually enable and embolden more local citizens and groups to be more aware, engaged, aggressive and politically overt in lobbying techniques to achieve the desired ends of their communities.

If my speculations are right, we can only hope any new centralized public policy decisions review processes will be based on sound principles and not just by politics-as-usual depending on what "big wheel" has the most squeak, influence and access to power.