In 12 months, The National Disability Insurance Scheme is being rolled out across Australia. What can not-for-profits and disability providers do to ensure they're ready for the sweeping changes?
The National Disability Insurance Scheme (NDIS) will significantly alter the way many not-for-profits carry out their disability services. Although the government has been working on this scheme for some time and trialling the program in states across Australia, the coming years will distinguish those able to adapt from those that don't.
NDIS in a nutshell
Most organisations are already familiar with the idea behind the NDIS. In general, the change puts greater control into the hands of people with disabilities and their caregivers. Instead of allocating block funding, the government will work with each client to develop an individualised plan for care and budget.
These individuals will then have a choice of providers to attain specific services, and can even cherry-pick options from multiple organisations.
Because of this autonomy and different funding model, groups that provide these types of services will face greater competition and may need to re-examine their pricing, customer service, marketing and operational efficiency to attract people to their offerings.
What it means for not-for-profits
All charities and organisations that provide disability services will need to adapt to these changes, ensuring their strategies and pricing are both in line with the requirements of the program and financially feasible. However, some entities will face additional challenges and questions - in particular church groups, charities and other organisations that currently provide some disability services but aren't considered full disability service providers.
In other words, because of the competitive landscape for specific disability services as well as the end of grants and tenders that charities used to receive, not-for-profits may find themselves facing new cash flow challenges. They'll also need to get up to speed with invoicing and reporting requirements, creating a possible strain on staff members.
How charities can get ready
What can not-for-profits do to prepare for these changes and remain financially sound into the future? For some, it might be worth examining whether they should cease particular services in light of the financial impact the shifts in funding will bring.
Not-for-profits will also need to make wise investments and seek alternative sources of funding to make up the difference. In some cases, mergers and acquisitions can help organisations refine their purpose, consolidate resources and run more efficiently.
Similarly, utilising data and technology to make strategic operational choices and streamlining administrative processes might be the key to boosting productivity. For example, a data-driven analysis of the true costs of carrying out particular services in the context of NDIS pricing guidelines could help charities choose which services to continue providing.
Although the new scheme is being rolled out gradually and may take five to 10 years to be completely clear, the time to start making changes and planning for the future is now. The significance of this transition cannot be overstated - charities will need to learn how to thrive in a more commercial landscape, which means they may need to seek advice on the best approach for their particular organisation.
BDO is already working with a number of NFP organisations and committed to helping them prepare for NDIS, particularly well-defined transformational strategies.
Is the sector ready for transition in July 2016?
BDO is committed to helping the sector prepare for scheme, particularly with well-defined transformational strategies.