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Not for Profit Organisations in the New Zealand Public Health Sector

Free essay example:

MNFP590-06A (NET) Directed Study
Not for Profit Organisations Essay

Tim Antric


Public health is most commonly defined “in terms of its aims - to reduce disease and maintain health of the whole population” (Beaglehole & Bonita 1997).  It is a broad discipline which has at its core the promotion of wellness and the prevention of disease.  In Aotearoa New Zealand, the mix of international and indigenous approaches to health have led to the development of a holistic approach to the promotion of health supported by a range of Government and Not for Profit (NFP) agencies.  I use public health in this paper as an all-embracing term, cutting across “housing, income, deprivation, local safety and security, transport, communication, children, transitions, old people, training, employment and refugees” (Larner & Craig 2002).

My experience of work within this sector, in forming partnerships between Government agencies, NFP organisations (NFPO’s) and communities, and in developing new projects to address social, health and environmental matters has enhanced my understanding of issues affecting life in Aotearoa New Zealand.  In this paper, I seek to introduce my understanding of NFPO’s in this country, setting clear limits to the area of the sector I will consider.  I will then consider how the Not for Profit sector has developed in this area over the last two decades before presenting my own thoughts around the current situation for this  part of the sector.  

What is a Not for Profit Organisation?

Wikipedia (2006a) defines a NFPO as “an organization whose primary objective is to support some issue or matter of private interest or public concern for non-commercial purposes”. This definition fails to acknowledge the huge diversity of NFPO’s, ranging from hugely commercial operations such as Saudi Aramco, the largest oil corporation in the world, through to the local chess club.  The Free Encyclopedia’s definition of NFPO’s embraces the vast majority of organisations but effectively excludes state owned commercial operations, including Genesis Energy, Landcorp and New Zealand Post.  I shall focus on NFPO’s that provide avenues for the advancement of public health and within that those that see themselves as advocates and service providers.  In doing so I do not seek to detract from the contribution to wellness, social capital and community cohesiveness contributed by sporting clubs, women’s groups and others, nor from the tremendous contribution Housing New Zealand Corporation, Accident Compensation Corporation and other NFP Corporations make to this country, but rather to acknowledge my own limitations in seeking to understand the entirety of this massive sector.

Statistics New Zealand uses a United Nations (UN) definition of NFPO. These government officials define the NFP sector as consisting of agencies that

  • are organised to the extent that they can be separately identified
  • are not for profit and do not distribute any surplus they may generate to those who own or control them
  • are institutionally separate from government
  • are in control of their own destiny, and
  • are non-compulsory in both terms of membership and member’s input
    (Statistics NZ 2005)

The UN is an international organisation established in 1945.  This organisation draws its representation from fifty member states and has within its aims to promote human rights, sustainable economic development and social development across the globe.  New Zealand has shown its commitment to the ideals of the UN through being a signatory to the United Nations Charter and through the ratification of various documents, including the United Nations Convention on the Rights of the Child and through enshrining human rights in law (www.hrc.co.nz).  This current Government’s commitment to the ideals of the UN has allowed the space for development of many NFPO’s as it is their core business to promote and work for the rights of the disadvantaged.  Although it should be noted that prior to World War II, Aotearoa New Zealand had a strong non-Government sector with politicial clout (Piddington 2005) which is only now recovering.  If, as the Human Rights Commission articulates, “everyone has a responsibility to act to end violence” and all New Zealanders have a right to health then there is much scope for NFPO’s to work with Government to achieve human rights for all.  This is of particular importance when one considers our founding document, Te Tiriti O Waitangi, which guarantees the same rights for Māori as for Tauiwi and yet it is the tangata whenua who are most affected by violence and have the poorest health expectations.

The UN definition of NFPO’s narrows down the organisations that might be deemed to constitute what  in Aotearoa New Zealand is now frequently called the NFP or Third sector. Through identifying NFPO’s as “non-compulsory”, however, attention is deflected from the organisations created by statute which we are required to contribute through taxation, levies, and so forth.  Within this country, these institutions include District Health Boards and the Accident Compensation Corporation, whilst having a contribution to Public Health, these organisations sit outside the scope of this paper.  

Being “in control of their own destiny” is a defining criteria that few of the agencies of interest to me would feel able meet!  Yes, they have Management Committees or Boards but their increasing reliance on Government contracts has effectively limited their ability to set their own agenda and direction.

I shall use the term NFPO to refer exclusively to those organisation that fulfil the Wikipedia definition but also have a focus on service provision which supports the development and wellness of individuals and communities.  These organisations will have non-commercial purposes as their primary concern, that is to say their primary concern is the arts, education, welfare, research or some other philanthropic goal.  I shall focus on those organisations that fit the Inland Revenue Department’s definition of “non-profit organisations”, that is to say “any society, association or organisation that is not carried on for the profit or gain of any member and has rules that do not allow money, property or any other benefits to be distributed to any of its members” whilst also having a focus on public health in its widest sense.  

The place of Not for Profit Organisations in Aotearoa New Zealand

The formal NFP sector in Aotearoa New Zealand has its roots in the churches and communities of this nation although recognition must also be given to the Māori institutions of whānau and hapū that have supported communities in this country for a thousand years.  It is only relatively recently that these institutions have been formalised by the state and perhaps as a means of controlling Māori in the wider project of colonisation. The Maori Trust Board Act for instance was an attempt by the Crown to reduce its interactions with hapū, despite it being the hapu leaders who were signatories to our founding document, Te Tiriti o Waitangi.    

The history of social change in NZ and the configuration of Public and non-Government organisations in that change are well documented by the Royal Commission on Social Policy (1987).  Public sector provisions before the reforms of the 1980s were based on an assumption of “a bounded national economy, government by official agencies . . . a single notion of society and the male breadwinner” as citizen (Larner & Craig 2002).  It was a period when, argue Larner and Craig (2002), the public sector had significantly reduced the “role and influence of non-governmental agencies” in both developing policy and providing services. The welfare system assumed social security ‘from the cradle to the grave’, starting with the old age pension introduced in 1898, the subsequent social security legislation in 1938 and finishing with the introduction of the Domestic Purposes Benefit in 1973 (Knutson 1998).  Because Women, Māori, non-European immigrants and other non white male able bodied people were systemically excluded from formal posts in the government sector, this approach effectively excluded these groups from engagement within both the state sector and much of the formalised NFP sector. However, strong discourses could be seen in the Māori, women’s and community development movements.  These groups effectively worked in the community, developing strong and vibrant networks of services through the likes of Rural Women New Zealand, Maori Women’s Welfare League, Kingitanga movement, and others.  

The NFP sector as it can be seen today has been shaped by policy and practice over the last twenty years.  Beginning with the election of the fourth Labour Government in 1984 the changes began which shaped the sector into its current form.  The emergence of neo-liberalism within Aotearoa New Zealand (and elsewhere) saw a reformation of social policies primarily based around the notion of paid work as the main means of ensuring the welfare of individuals (Boston, Dalziel & St John 1999). Kelsey (1995) notes that up until the 1980’s, civil society in Aotearoa New Zealand was organised around single issues, most of which were social whilst the reforms introduced by the fourth Labour Government organised society around economic reforms.

The economic reforms introduced at this time were, and still are, the most major structural changes Aotearoa New Zealand has seen and the pace with which those changes happened left many in the NFP sector reeling with “major cuts in government funding… growing demands on dwindling resources… [and] a bureaucratic nightmare for community organisations” (Kelsey 1995).  One of the core principles of the reforms was that “consensus amongst interest groups on quality decisions rarely if ever arises before they are . . . implemented . . . it develops after they are taken, as the decisions deliver satisfactory results” (Douglas 1993).  Little if any account of the experience and knowledge of the sector was involved in developing the reforms.  It must also be noted that whilst the changes were made with little consultation with the NFP sector, it was also at this time that the need for NFPO’s was at its greatest, The Economist (cited in Kelsey 1995), makes the observation that income inequalities increased as a result of the economic reforms and Kelsey (1995) herself notes that the “traditionally marginalised had been joined by growing numbers of newly poor”.  With the increasing role of Treasury and Finance departments under the reforms, an increasing focus on audit and output measurement and a move to greater significance of contracting, the changes in the NFP sector had begun.  As Government reduced the ability of many citizens to effectively participate in society, it also funded research such as the Royal Commission on Social Policy (1987) that identified how the very supports it was removing contributed to a fair society (Kelsey 1995); at least they knew what effect they were having on the “ordinary New Zealander”.

Prior to the reforms of the 1980’s and 1990’s, the NFP sector was funded to provide generalised outcomes (Curtis 2003).  This allowed NFPO’s to commit time to networking and collaboration, working to address the needs of client groups, developing community defined services and focusing on prevention.  The move from grants to contracts for service damaged the ability of the sector to work in this manner. The Plunket Society, for example, found itself contracted to deliver “highly specified outputs, satisfying central government monitors but stultifying initiative and perhaps delivering less [value] for money” (Curtis 2003).  The move to contractualised relationships moved the sector from a place of strength and security where social objectives were at the core of policy and planning to a radically changed position, focused on the need to secure contracts and achieve pre-determined outputs.   The alienation of the NFP sector from Government’s decision-making processes combined with the introduction of the competitive marketplace essentially removed any power NFPO’s might have once had and brought with it a new place for these organisations – a service delivery arm of Government (Larner & Craig 2002).

NFPO’s were then placed firmly within the new discourse by their place as ‘little arms of the state’, required by the new contracts to become less political (a debate which re-emerged in 2005 as the Opposition challenged Government’s right to fund agencies to advocate for change, particularly in relation to the smoking lobby) and to have their day-to-day practices undermined through an emphasis on reporting frameworks and narrowly defined outputs as opposed to the broader outcome framework utilised prior to the reforms (Larner & Craig 2002, Curtis 2003).  Larner and Craig (2002) also identify how these changes pressured community based staff to professionalize and thus created a new army of educated professionals able to engage effectively with the political system – something perhaps unforeseen at the time.

However, the principle change for the sector was the loss of coordination as a result of the focus on the increasing commitments to contractual type relationships.  Agencies were required to compete with one another although conversely in many areas, the need to challenge this strengthened shared values between agencies and provided a rallying call for activists.  As part of this focus on contracts, the Government funding was channelled into “narrow output classes” (Morris & O’Brien, date unknown) resulting in a very different practice and significantly restricting the range of services NFPO’s were able to provide.  Morris and O’Brien identify that NFPO’s changed “the services they provide in order to… secure Government funding”.  This resulted in services being funding not need driven.  Of concern also was the tremendous increase in resources required in order to maintain funding levels, McClellan and Warren (1996) identify that some agencies were spending two-fifths of their time on monitoring activities and funding applications.

Foremost in the reasoning behind the reforms was a pressure towards families and individuals taking greater responsibility for wellbeing.  This reduction in the services provided by Government increased the burden on the NFP sector and their communities.  The changes associated with neo-liberalism were immense and the NFP sector did not respond overnight however, the subsequent two decades have allowed for the sector to reposition itself and to produce skilled and articulate activists able to effectively harness new opportunities within society.

The most recent change to the NFP sector has been the introduction of the Charities Act 2005.  The Act establishes a Charities Commission whose role is to register and monitor the charitable sector, encourage the effective use of resources, educate the sector around good governance and stimulate and promote research around the charitable sector (Charities Commission 2006).  The Charities Act defines “charitable purposes” as “the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community” (Charities Act 2005).  The Commission has been presented as a means of making information on charities more accessible to the public. There is some concern, however, that this Commission is an attempt by Government to regulate the NFP sector through its principle functions relating to the monitoring and compliance of charitable bodies and ensuring they are adhering to Government defined obligations (Prebble 2004).

The neo-liberalism brought in by the incoming Government in 1984 focused purely on economics and the free market, eventually it would be realised that this approach would not create long-term social cohesion and solve the myriad problems existing before and created by neo-liberalism.  A new solution was needed, a third solution, the third way!  It is however worth noting that the development of the Third Way was long overdue in Aotearoa New Zealand given that the same Government’s Royal Commission on Social Policy (1987) had identified that many of the measures being introduced did not contribute to a fair society.

The Third Way has been adopted as the way forward by those countries that most enthusiastically embraced the reforms of the 1980’s (The Economist cited in Kelsey 1995). The Third Way builds on “the traditional social democratic perspective [and] usually stands for deregulation, decentralization and lower taxes” (Wikipedia 2006b).  Giddens (1998) explains this Third Way as a construction between socialism and neo-liberalism; it brings together work, family, gender and traditions as the new building tools for society.  He presents an inclusive society built on (1) equality as inclusion; (2) limited meritocracy; (3) renewal of Public Space; (4) beyond the work society; (5) positive welfare; and (6) the social investment state (Giddens 1998, Fitzgerald, date unknown).

The Third Way differs from the neo-liberalist approach by claiming to look beyond work in the marketplace as the sole means of support for individuals and families; it claims to embrace facets of the welfare state and to provide for social investment. This social focus compliments a stated intention to take a firmer policy in employment conditions, to enter into community and market sector partnerships to deliver a more just society.

The Third Way reverses some of the changes brought about in the 1980’s and 1990’s; collaboration is promoted by the current Government as a central part of sustainable social development (Clark cited in Curtis 2003).  This focus on collaboration has seen a move away from the contractual relationships of the 1980’s and 1990’s to less formal agreements between the different parties, commonly known as Memoranda of Understanding.  These agreements spell out the relationships between agencies without the need for the specifics necessary in contractual relationships.  Through defining the relationships between agencies, the notion of silos within Government and society is being challenged and readdressed.  The Review of the Centre identified the need for Government to take a citizens focused, relationships based, balanced and collaborative people centred approach to services (http://www.executive.govt.nz/minister/mallard/ssc/proposals.htm).  This fits well with the many Government strategies developed since that time, where a focus on collaboration between Government Ministries and Departments, Local Government and NFPO’s is espoused (for example, New Zealand Injury Prevention Strategy, Te Rito: New Zealand Family Violence Prevention Strategy, Opportunities for All New Zealanders).  The place of the NFPO in Aotearoa New Zealand, is according to Government, that of ‘a partner’ in achieving Government’s social goals, only time will tell whether this proves to be true.

The ‘whole of Government’ approach promoted since the Review of the Centre stresses the need for coordinated responses and ‘circuit breaker’ teams developing solutions for societal problems (Larner & Craig 2002) however, the actuality is not often as simple as the ideas with reluctance from Government agencies to take a lead on joint issues resulting in the work happening at the flax roots but not at the Centre.

As a former member of the National Family Violence Funding Circuit Breaker Project I had the opportunity to witness this disconnection not only between the various Government agencies but also between those agencies and NFPO’s at first hand.  Six Government agencies mapping their involvement in the funding of the family violence sector, identifying the need to work together in order to maximise the effect of the available funding and then everything grinding to a halt as one of those agencies reprioritised their areas of work.  At a local level, agreement had been reached to develop a closer working relationship between the Public sector and provider organisations yet the lack of direction from the Centre prevented the work from going forward despite consensus on need!

The place of the NFP sector within Aotearoa New Zealand in the early Twenty-first Century is that of a sector with an intended ‘closer working relationship’ with Government.  The ‘Statement of Government Intentions for an Improved Community – Government Relationship’ “demonstrates the government's commitment to creating an environment where community organisations are treated with respect, and will make it easier for organisations to work with government” (Clark 2001).  Since that statement, Government agencies have developed tools to support themselves in working with NFPO’s, developed forums which allow such organisations to directly feed into the groups that advise Ministers (such as the Taskforce on Violence within Families which includes CEO’s of numerous Government agencies as well as CEO’s from relevant NFPO’s).  The Government has made clear their intention to work with the NFP sector and the many New Zealanders involved in it.

This intention to work closely with NFPO’s to develop strategy and policy is to be lauded however, much remains to be addressed.  The budget process, in my experience, still relies on secrecy to develop new Government led projects, inviting minimal if any input from NFPO’s despite the majority of expertise in developing and delivering community based services lying with those organisations.  I found it particularly frustrating when developing a budget bid for the Minister of Social Development earlier this year that Ministry policy prevented me from actively working with the NFPO sector to ensure that the proposed work would fit with the needs of them and their client groups.

NFPO’s today are still essentially a service arm of Government, contracting with various Departments and Ministries to deliver essential services to communities.  However, a major change has been that those agencies are now able to work more closely with their funders to develop and improve existing services.  For example, whilst family violence services are funded by six different Government bodies, those funders have agreed to keep funding within the existing sector to prevent further expansion of the sector. The need for this was highlighted to me when doing a community profile of Te Tai Tokerau as part of Work and Income New Zealand’s Family Violence Intervention Project.  There are currently 61 different agencies providing family violence services (www.familyservices.govt.nz) for a population of 54,576 (www.statisticsnz.govt.nz), this agreement between funding agencies prevents the limited funding being spread even more widely than the level that previous practice has allowed.  This commitment to supporting NFPO’s has also extended to the development of joint auditing practices although much else remains to be done to eliminate the disproportionate amount of time spent on administration and reporting as a result of previous reforms.

I also note that the NFP sector allows Government to provide services at a lower cost than if those services were provided directly.  For example, if we accept District Health Board’s (DHB) as a branch of Government given their place as both provider and funder of health services, the current pay rates for DHB nurses are 20% higher than those employed in the NFP sector due to the levels of funding provided by Government to support the District Health Board New Zealand’s Multi-Employer Collective Agreement not being extended to cover NFPO’s staff (Health and Disability Sector NGO Working Group, date unknown).  This inequality in pay rates extends to doctors, support workers and other staff in the NFP sector.  Alongside the inequality in pay rates, current funding levels do not allow the necessary opportunities for professional development and other necessary areas, such as compliance costs for the appropriate professional bodies.

NFPO’s allow an increased service to be sourced by Government at a reduced cost through the passion and commitment of community members and the enthusiasm and generosity of citizens who are already funding said services through their taxpayer dollar.  For example, in 1998 it was reported that the Community Funding Agency was providing as little as 25% of funding for some agencies (Dialogue cited in Morris & O’Brien).  However, this freedom from a total reliance on taxpayer dollars does provide NFPO’s with the scope to advocate with Government for their own needs and that of their client groups.

The Future for Not For Profit Organisations

The Twenty-first Century has already seen the release of the ‘Statement of Government Intentions for an Improved Community – Government Relationship’, the further development of tools to support Government in working with NFPO’s and the development of a raft of tools for NFPO’s to support best practice governance and administration.  Added to this has been the development of the Office for the Community and Voluntary Sector, the establishment of a Charities Commission and the Community Sector Taskforce.  The NFP sector is perhaps in its strongest position ever, whilst still in many ways, being ‘little arms of the state’; the sector has its strongest position in decades in terms of its influence on the Governance of this country.

It must however be noted that all the power in this relationship between Government and the NFP sector remains in the hands of the Ministerial few.  Elections are unlikely to be won or lost on the basis of Government’s relationship with NFPO’s, despite the outcry as individual NFPO’s are damaged by funding decisions (the removal of funding for Plunketline being one such example).  This relationship can only ever be one of paternalism until such time as pertinent research can persuade those with the power to begin to relinquish it!  NFPO’s forced to accept the dictates of Government agencies, albeit that they have the most opportunity to have their voices heard, should those voices disagree with the voices of the elected few then they will not be heard.  If nothing else, during their time in the wilderness, NFPO’s learnt to manipulate, to lobby and to manoeuvre as befits the politicians they have become.

In a study conducted by Grant Thornton (2005), it has been identified that the three most challenging issues for the sector are financing, fundraising and governance.  This must however be tempered by the fact that these are exactly the areas Grant Thornton are able to provide support and consultancy.  Whilst these are valid issues and doubtless at the forefront of the minds of NFPO managers and governance groups there are other more pressing matters for the sector as a whole.  These issues largely relate to the marketplace that NFPO’s have been forced to contend with over the last two decades.

The issues with finance largely come down to finding a balance between the goals of NFPO’s and their existence in the marketplace.  Fundraising however links directly to the ongoing survival of NFPO’s in a sector dependent on Government for its major source of income, particularly as the majority of theses agencies have become social enterprises, becoming ‘little arms of the state’.  Governance issues also weigh heavily on NFPO’s as the huge numbers of organisations requiring skilled board members can only mean that finding people with the necessary skills has become harder and harder.  The passion is there but the skills to lead the organisations in to the future are often lacking.  There is also an increased focus on governance from funding agencies and regulatory bodies without any funding attached to support this.


The NFP sector has been firmly reshaped by the last two decades.  The role of the sector had been significantly reduced over the year preceding the reforms begun in 1984 however this has been reversed by the impact of ‘Rogernomics’.  Whilst the 1980’s and 1990’s brought an increased role for NFPO’s in providing services for New Zealanders the impact of contracts resulted in a narrowing of the focus of the NFP sector as its members sought to retain funding and achieve the narrow outputs demanded by Government.

The move from neo-liberalism to the Third Way has been a positive one for the future of the NFP sector.  Government has recognised the need to work in ‘partnership’ with the sector in working towards a civil society.  Government has been increasingly active in supporting the needs of the NFP sector and in increasingly involving members of the sector in the decisions that affect them.  Whilst NFPO’s remain an arm of the state in the delivery of services for New Zealanders, they have increasing involvement in the development of new areas of work and the values of networks and collaboration is finally being recognised.

Aotearoa New Zealand still has many years to travel on its journey to a civil society however, the journey has begun, the lessons of neo-liberalism are behind us and the horizon looks promising as Government, NFPO’s and communities paddle together towards the distant horizon.  In comparison with the situation in the 1980’s and 1990’s, we are clearly moving towards a fairer, more inclusive society however the workfare system still exists and those in greatest need continue to be those that are increasingly marginalised by Government policy.  There is a long way still to go on our journey to equity and wellness.


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Boston J, Dalziel P, St John S.  1999.  Redesigning the Welfare States in New Zealand: Problems, policies, prospects.  Auckland: OUP.

Charities Commission.  2006.  A Guide to the Charities Act.  www.charities.govt.nz.

Clark H.  2001.  Speech Notes: Statement of Government Intentions for an Improved Community - Government Relationship.  http://www.executive.govt.nz/minister/maharey/community/02.htm.

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Douglas R.  1993.  Unfinished Business.  Auckland: Random House.

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Health and Disability Sector NGO Working Group.  date unknown.  Current Financial Pressures for NGOs: An Overview from the Health and Disability Sector NGO Working Group.  http://www.moh.govt.nz/moh.nsf/0/6F62DE7DCE338326CC256FA200126754/$File/financialpressures.doc.

Inland Revenue Department.  2006.  Inland Revenue.  http://www.ird.govt.nz/notforprofits/.  

Kelsey J.  1995. The New Zealand Experiment: A World Model for Structural Adjustment? Auckland: Auckland University Press.

Knutson D.  1998.  Welfare Reform in New Zealand: Moving to a Work-based Welfare System.  www.fulbright.org.nz.

Larner W, Craig D.  2002.  After Neoliberalism? Local partnerships and Social Governance in Aotearoa New Zealand.  http://www.fas.umontreal.ca/pol/cohesionsociale/publications/larner%5B1%5D.pdf

McClellan V, Warren J.  1996.  Youth at risk: service coordination barriers and improvement opportunities.  Wellington: Ministry of Youth Affairs.

Morris L, O’Brien M.  date unknown.  A World of Difference: Significant Changes in the Provision and Delivery of Social Services over the last Fifteen Years.  www.aucklandcitymission.org.nz.

National Collective of Independent Women’s Refuges.  About Women’s Refuge.  

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