The Social Economy and the NDIS

Jun 5, 2017

For the last couple of decades, the social economy has been changing.

While the disability sector has had little to no exposure to some of the innovative social changes being implemented around the world, in Australia there has been a steady convergence of the social and economic sectors and this will continue to develop.

The National Disability Insurance Scheme is demanding that traditional not-for-profits transition to a social business structure taking control of costs and balancing their mission and economic commitments for the best possible outcomes. This requires the development and application of commercial methods to operations in order to compete with market forces while at the same time, maintain the quality of organisational mission. It is really a quasi-market in which the disability sector is being asked to work because the price the sector is able to charge is limited by a third party namely, the National Disability Insurance Agency.

On the other hand, the traditional for-profit companies, are moving towards being more socially responsible and to be seen as a good corporate citizens. They also see the NDIS as an opportunity for social and economic development.

The combination of the two business streams brings together social and economic value where the distinction between not-for-profit and for-profit business is reducing. Elements of the for-profit sector have long been balancing social need with economic realities and are moving in on not-for-profit territory with greater interest and capacity to compete.

In the social innovation world, partnerships are being developed between not-for-profits, government and the private for-profit sector. Working together for social and economic good, these are powerful partnerships where the parties are open to changing the traditional ways of meeting social need. The Social Benefit Bond originating in the UK, is an example of these three sectors working together. The NSW Government has even set up an Office of Social Impact Investment within is Treasury Department. Evaluations of their Social Benefit Bonds trials are available and provide information on what can be achieved. However, while this type of initiative works best on large projects, the resulting partnership gives rise to social innovation. In Scotland, these three sectors working together has created a new sector called the Fourth Sector . Instead of being a “not-for-profit or third sector”, the “fourth sector” is called, the “for benefit sector.” Some organisations are using this sort of language in their transition to the NDIS especially when speaking to business groups.

Under the NDIS, the disability sector has the opportunity to work in partnership with others. This may be between organisations of like size, small organisations linked to a large organisation, two or more small or medium organisations working together. Being open to change, creating new links, ideas and resources, provides opportunities for social innovation and to improve economies of scale.

DCA Advisory Services encourages organisations to be open to partnership or collaboration options and has expertise and experience in working with organisations to improve their business options.

Len Airey has nearly 30 years’ experience in the disability sector following an extensive career in Local Government. He held the position of CEO for the Isis Shire Council; has held numerous voluntary positions in the community; held senior managerial positions in direct services to people with disabilities and was State Manager of the Qld division of National Disability Services. He has successfully worked across all facets of the Queensland not-for-profit sector. Len currently consults to the Disability Sector. He holds a Post Graduate Certificate in Management – QUT; Certificate in Business Management Practices – AIM; ISO Lead Auditor qualifications; and is a Certificated Local Government Clerk.


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