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Responding to pressures on community organisations to be bigger: understanding and considering your options

In New South Wales, especially since the mid 1990s, there have been numerous changes affecting human service systems that are increasing pressures on human service organisations to be bigger - because ‘bigger’ has advantages over ‘smaller’ for organisations in the current human services context.

There may or may not be advantages for the individuals, families, neighbourhoods and communities that the organisations exist to serve.

Changes and pressures

The changes and pressures include:

  • Changing from funding to tendering:
    Competition brought about through the tendering process
    Increases in the complexity of tenders and the amount of work required to put tenders in.
    The way in which tenders are put out - eg tenders require services to be provided in larger rather than smaller geographic areas.
  • Increases in accountability measures including:
    More programs requiring accreditation and the complexity and demands of the accreditation processes
    Increased reporting and accountability requirements.
  • Increases in the amount and complexity of legislation to be complied with including taxation, occupational health and safety, child protection, privacy, industrial relations etc.
  • Increases in the requirements for evidence based practice and the implications of this for research and evaluation - for example organisations are expected to be aware of evidence for their practice and to be building knowledge about practice
  • Increases in the complexity of systems particularly IT and related systems and the need for specialist expertise to develop and maintain these systems
  • The need for financial independence from government in order to be a “community organisation” rather than just a “government sub-contractor”.

All of these change have in common the consequence that larger organisations have advantages of scale over smaller organisations.

In essence ‘scale’ has become an important factor in getting contracts, maintaining organisational infrastructure, having access to specialist knowledge and skills, having the ability to generate other sources of income, and so on.

Individual, family and community connections

Human service organisations provide services to individuals and families in neighbourhoods and local communities. At their best, human service organisations have the capacity to:

Be closely connected with the local community
Understand the needs in the local community
Flexibly meet the needs of individuals and families
Be responsive and timely.

Small organisations have their own history, values and identity - that is often tied to a local community. Small organisations typically value being connected with their local community, flexible meeting people’s needs, etc and have the capacity to do this.

Larger organisations value these things but can easily become ‘bureaucratised’ and in turn less well connected with the local community and the people who live there. Economies of scale also bring standardised policies, systems and ways of doing things. It can be easy for a larger organisation to become less flexible and responsive from the client’s point of view.

How are the pressures for economies of scale balanced with the need for responsive flexible services well connected with and ‘owned by’ the local community?


Small and medium organisations are finding themselves in situations where they must make tough choices. Some possible responses include:

1. Do nothing (for some organisations the consequence of this will be they don’t win new contracts and so become unviable).

2. Identify what you most value about your existing organisation and work to ensure what’s most valued continues in one form or another.

3. Get known and develop a wide support base in your local community.

4. If your organisation is not likely to be viable, then acknowledge this is the case and actively transfer your contracts to another you see as being able to best meet the needs of the local community.

5. Establish formal partnerships with other organisations to gain economies of scale.

6. Collaborate with other organisations to develop “service hubs” that can provide specialist support services to several small organisations.

7. Be part of a consortium where several organisations come together to create a new entity which all the participating organisations own/control.

8. Amalgamate with one or more other organisations.

9. Advocate for changes to the tendering process.

10. Be part of the restructure of the entire funding system in your community (begin with a clean slate and start again - a somewhat radical option).

Larger organisations also have tough choices. Some of the options are similar to those above - identifying what's of value, partnerships and consortiums. Others include re-defining the ways in which they relate to smaller organisations and dealing with the intended and unintended consequences of this.

Local government may have an important role to play. It is ideally located to work with the local community to identify the community's vision, values, needs and directions. It is also in a position to facilitate work with human service organisations in collaborating together to achieve the local community’s vision and directions and meet the local community needs. If Local government plays these roles it could make a significant contribution to supporting organisations working in the local community in meeting local community needs in flexible and responsive ways.

Government departments which let contracts for services also need to give full consideration to the impact of the way they let tenders - both the intended and unintended consequences.

Whose best interests?

In considering the tough choices to be made it is important to ask whose interests are being served? What is in the best interests of:

The individuals and families in the community needing services?
Local neighbourhoods and local communities?
The human service organisation?
Local government?
State and Commonwealth government Departments?
State and Commonwealth governments?

What are the competing values?

In considering the tough choices it is important to recognise the competing values. For example:

  • Is a more efficient organisation that is less connected with the local community more or less important than a less efficient organisation that is more connected with and ‘owned by’ the local community?
  • Is an organisation more accountable to government with less community connections more or less important than an organisation less accountable to government and more accountable to, connected with and ‘owned by’ the local community?
  • Is a more efficient human services network based on competition more or less important than a stronger human service network based on collaboration?


Organisations are making tough choices. In thinking about what choices are to be made it may be important to consider what stories you are in:

  • Is the story about effective and efficient delivery of human services through a human services network?
  • Is the story about the transfer of power from the local communities to organisations and then from organisations to government?
  • Is the story one about the inevitable consequences of social and technological changes made in recent decades?
  • Is the story about how we collaborate together to create the future we dream about?

Note: These reflections were prompted by the Workshop Thriving Organisations? held in Nowra on 27th April 2007

Paul Bullen