Not-for-profit organisations
About this guide
Find out how not-for-profit organisations can partner with the South Australian Government through procurement and funding arrangements, and access support to help navigate these processes.
Not-for-profit organisations (NFP) provide vital frontline services as key government partners, including community health services, homeless services, disability services, the environment, arts, sport and recreation, child protection and education.
The South Australian Government is committed to support and strengthen collaborative partnerships between the government and the NFP sector.
The Department for Premier and Cabinet's circular PC044 South Australian Funding Policy for the Not-for-Profit Sector aims to provide a consistent approach to government funding, with clear requirements for agencies which reduces the administrative burden on NFPs and maintains their independence.
A Common Goal: Review of the South Australian Not-for-Profit Funding Policy
In 2023-24, Procurement SA partnered with the Not-for-Profit Advisory Group (NFPAG) to jointly carry out a review of PC044 South Australian Funding Policy for the Not-for-Profit Sector.
The purpose of the review was to identify the challenges and barriers experienced by NFPs working with government, to improve efficiency and reduce administrative burden, and achieve better value for money.
Procurement SA, in conjunction with the NFPAG, consulted with the largest and most diverse NFP cohort ever engaged by the Department of Treasury and Finance, alongside representative South Australian Government participants. The full review is available for download: A Common Goal: Review of the South Australian Not for Profit Funding Policy report.
The government’s response to A Common Goal
The government is committed to working in partnership with the NFP sector to realise benefits and improved outcomes for South Australia. The review identified opportunities to strengthen collaboration between government and the NFP sector, informed by the insights and experience of both parties.
Of the 29 recommendations made by the NFP Advisory Group, 18 have been fully supported and 11 supported in principle. Implementation of these recommendations will take place over the next 4 years.
How government buys from the NFP sector
South Australian Government agencies use a commissioning approach to plan, fund and deliver services in partnership with the not-for-profit sector.
The cycle consists of four key phases:
- Needs assessment and market analysis– understanding community needs, service demand and the provider market
- Service design– developing service models and determining how outcomes will be achieved
- Selecting providers and contracting – choosing service providers and establishing funding or contractual arrangements
- Monitoring and evaluation – tracking performance, measuring outcomes and identifying opportunities for improvement. (insert image below)
Supporting not-for-profit organisations
The South Australian Government has introduced a range of initiatives to make it easier for not-for-profit organisations to work with government.
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Government uses a standard not-for-profit funded services agreement to simplify and standardise the funding arrangements for services delivered by NFP organisations on behalf of government. This agreement is typically used for block-funding arrangements.
Funded services agreements are generally used where a NFP organisation delivers services on behalf of government in exchange for block funding. The specific funding model and agreement type will depend on the nature of the services being delivered.
More information can be found on the Department of Treasury and Finance website.
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Where there is an ongoing need and funding is available, agencies may establish longer-term contracts with not-for-profit organisations. This approach provides greater certainty and stability for NFPs delivering services over an extended period. Longer-term arrangements generally apply where services are required for more than two years and are not linked to Commonwealth funding.
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Indexation helps funding arrangements keep pace with increasing costs over the life of an agreement, providing greater certainty for service delivery.
More information can be found on the Department of Treasury and Finance website.
Supporting resources
These resources provide guidance on funding, agreements and government partnerships for not-for-profit organisations.
The South Australian Funding Policy for the Not-for-Profit Sector
Sets out the government’s approach to funding not for profit organisations, including principles and requirements for consistent and effective funding.
Department of Treasury and Finance
Information, policies and resources to support not-for-profit organisations working with the South Australian Government.
NFP funding services agreement
A standard agreement used by government agencies when funding not-for-profit organisations to deliver services, programs or community outcomes.
A Common Goal: Review of the South Australian Not for Profit Funding Policy report
Outlines findings and recommendations to reduce red tape and improve how government funds and works with the NFP sector.
The South Australian Government’s Response to A Common Goal: Review of the South Australian Not-for-Profit Funding Policy Report
Describes the government’s response and planned actions to strengthen funding arrangements and partnerships with the NFP sector.
Frequently asked questions
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A not-for-profit (NFP) supplier is an organisation that operates for a social, community, charitable, cultural, educational or other public purpose rather than to generate profits for owners or shareholders. Any surplus income is generally reinvested in the organisation and its activities.
Being a NFP organisation does not prevent you from supplying goods or services to government. NFP organisations can compete for procurement opportunities, enter into contracts and be paid for delivering goods or services in the same way as other suppliers.
Government may engage with NFP organisations through either a procurement or a grant arrangement, depending on the nature of the requirement. If government is purchasing services from your organisation, you may be engaged under a contract. If government is providing funding to support a project, program or community outcome, a grant or funding agreement may be more appropriate.
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A procurement is when a government agency is purchasing goods or services from a supplier to meet a business need. If you are awarded a contract, you are responsible for delivering the agreed goods or services and meeting the contract requirements in return for payment.
A grant is funding provided by government to support a project, activity or initiative that delivers a public, community, economic or social benefit. While grant recipients are accountable for how the funding is used and may have reporting obligations, they are not supplying goods or services to government under a procurement contract.
If you are responding to an opportunity, the documents will indicate whether the opportunity is a procurement or a grant. This is important because different application processes, assessment criteria, funding arrangements and contractual obligations apply.
Related resources
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