Benevolent Capitalism – why fees are good

For some people, the idea of a non-profit organisation charging fees and making a profit is an oxymoron. But that is to misinterpret what the term non-profit means.

Take, for instance, the Australian Taxation Office’s definition of a non-profit organisation:

“A non-profit organisation is an organisation that is not operating for the profit or gain of its individual members…”

or better yet, Wikipedia’s definition:

“… an organisation that uses its surplus revenues to further achieve its purpose or mission rather than distributing its surplus income to the organisation’s directors (or equivalents) as profits or dividends.”

So it is not a problem for a non-profit organisation such as a Local Council organisation or an Aid organisation to make a profit. In fact it is important that they do make some sort of profit in order to remain viable, pay wages of staff and provide a quality service to those they seek to serve.

I was discussing this with one of my good friends who mentioned that care organisations needed to start thinking of fees and charges as Benevolent Capitalism. Seeking to make a profit in order to be able to provide better and more improved services. Lets see how this could work.

Take a typical aged care service operating under a Local Government organisation or a health service. The program tries to provide the best care and support to the frail aged within its funding allowance. Staff need to be paid, fuel put in vehicles, power to operate the kitchen for meal on wheels, and the list doesn't stop there. After all the costs are taken out, service managers often find they struggle to provide anything more for the clients than basic care support. But clients want more than the basics – they want options, more choice and flexibility, but these come at a price.

I hear coordinators and managers talking about wanting to run activities programs, offer more than just a meals and laundry service but there just isn’t enough money. The vehicles are getting older and need replacing, where does the money come from? The buildings need upgrading to meet environmental health standards but there is no money to do it, so ‘we’ll just have to put in for a grant and hope for the best’. These are normal maintenance issues, not expansion of services, but client demands are changing, they want more.

This brings me to the subject of fees. We need to start looking at fees as a contribution towards making a service even better. Consider this: if your service had 20 clients who all contributed $50/fortnight in fees your service would have an extra $26,000/year. This could pay for a part time activities officer, contribute to the upgrade of a vehicle for transporting clients, or purchase new chairs or tables for your centre.

So coordinators and managers shouldn’t be afraid of the introduction of fees. Talking about money is always a touchy subject with a population group who often don’t have a lot of spare cash. Perhaps you could introduce the idea of fees at a client meeting where you discuss their ideas for extra support and activities. Together you could make a plan of what they want to see happen within the service. When broaching the subject of fees with an individual, you then can refer back to the ideas for activities and/or service expansion.

Of course, when fees are charged, the person paying will want to see something for their money so it is important that organisations inform clients what their fees have contributed towards. The purchase of a new set of adjustable leg chairs for client use in your centre can be communicated to your clients in a community newsletter, local radio station or simply by word of mouth.

We know that fees are new for many of the organisations we are currently working with. There is a lot of uncertainty around the introduction of them. In my experience however, as long as the fees are seen as ‘fair’ and ‘value for money’, people get used to paying them. Your service and clients will ultimately benefit from the application of Benevolent Capitalism.