Whose mission: the historical role of the church in delivering welfare services and the challenges presented in the contracting era

Welfare services are being reshaped again as governments pursue commissioning policies that blur the boundaries between the government, for-profit, secular nonprofit and faith-based sectors. In this article social policy consultant Wilma Gallet captures this historical movement and the inherent threat to faith-based organisations of being seduced away from their mission by government agendas.

The various denominations of the Christian church have been actively involved in caring for people in need for over 150 years in Australia, undertaking an important role to ensure that people at risk of social and economic alienation are provided with services that enable them to develop their full potential.

In the 19th century the church responded to social needs as they emerged and delivered services largely independently of the state. With the advent of the welfare state in the 1940s, governments increasingly became responsible for providing social services. There was a major expansion of social security system in 1945 and Commonwealth unemployment and sickness benefits were introduced to provide income support to people who were out of work. The Commonwealth Employment Service was also established to provide assistance to unemployed people in seeking employment.

Many thought that the rise of the welfare state would spell the end of the charitable sector, especially given that income support was now being provided to the poor. However, this was not the case, church groups continued to respond to local needs focussing their efforts on community support. They also expanded their work in children’s homes and moved into new areas of work such as the provision of homes for the aged (Murphy, 2011).

Religious based charities are amongst the largest in Australia and they currently deliver a range of social services; many of these services now receive government funding. Until recently, governments have taken a ‘grant in aid’ approach to funding services provided by church groups. This means that whilst public funding is providing for specific programs, these services are allowed to operate largely independently of the state. However the relationship between government commissioners and organisations contracted to deliver services has been changing under the contracting regime that has emerged over the past decade and continues to evolve.

Since the early 1990s, the doctrine of economic rationalism has been an increasingly dominant intellectual force shaping the views of key policy makers. This, combined with the rise of new public management has seen privatisation of public services and the establishment of market type approaches in the provision of welfare services.

The privatisation of employment services in 1998 saw the establishment of a quasi market with for-profit, nonprofit and church-related organisations competing for contracts to deliver services. The entry of ‘for profit’ providers into service areas that have been traditionally seen as the domain of nonprofits has had a significant impact on the social service landscape in Australia. This has produced a more commercial focus on achieving outcomes. It’s argued that these market type approaches change the relationships between nonprofit organisations and their clients; the relationship becomes one of a commercial transaction between supplier and consumer. For-profit providers are expanding their reach, they are becoming global providers of public services, such as prisons, immigration detention services, health services, education, consultancy, IT solutions and support, and welfare to work. There is a stronger focus on commercialism and corporate management.

The contracting state brings faith-based groups into competition with each other as well as secular nonprofit organisations and for-profit firms. The boundaries between the government, for-profit, secular nonprofit and faith-based sectors are blurring. There is also blurring of boundaries between the market economy and civil society and this raises questions about values and norms particularly for faith-based groups whose values are rooted in the Gospel message and compassion for the poor and marginalised.

The pervasive nature of the government contracting has seen church-related organisations being drawn very closely into the state, particularly in areas such as privatised employment services. Under the contracting regime, the welfare state has been extended through private, nonprofit and church-related organisations with these organisations representing the state to citizens (Smith & Lipsky, 1993:98). Church-related organisations have been described as ‘little fingers of the state’ (Evans, 2004) and are seen to be in danger of becoming little more than pawns or pseudo-state organisations (De Carvalho, 1994: Gregg, 2000: Austin, 2003).

Some argue that these arrangements make it difficult for church agencies to provide services that are consistent with the church’s mission. This also creates the potential for ethical compromise. In particular, there is a sense that church-related agencies may retreat from the important role of advocating on behalf of disadvantaged people, thereby limiting the church’s ability to effect worthwhile social change, in case this is viewed as criticism of government policies and jeopardises funding contracts.

The traditional role of faith-based groups in caring for people who are disadvantaged and empowering them to reach their potential can be undermined as they take on the role of the state. One of the most contentious issues in the privatised employment services in Australia is the central role that the private organisations have in facilitating welfare reform, specifically ensuring that job seekers comply with job search requirements in accordance with Mutual Obligation. Being required to police the unemployed has presented ethical dilemmas for church-related employment service providers.

The government’s intent to diminish its role in social protection and the stated role for civil society will see faith-based agencies, particularly larger providers, being encouraged to take on more public services. This is likely to involve prescriptive contracts where the outcomes are specified by the purchasing department and in some instances the specified outcomes may not be in the best interests of clients.

Contracts will be shaped to reflect government priorities and government policy. In the current climate, welfare reform and reducing the numbers of people reliant on government income support is a key priority. The welfare reform agenda is influenced by paternalistic methods intended to manage the poor through punitive and coercive approaches and includes measure such as increased mutual obligation and job search requirements, work for the dole, and in some instances compulsory income management. Contracted providers will be expected to deliver services that accord with welfare reform priorities.

Church-related organisations delivering services in this climate are likely to experience some tension in trying to provide appropriate support to disadvantaged people.

Religious organisations in Australia are often recognised as leading the way in addressing social concerns, often ahead of secular nonprofits and government.  This trend is evident throughout Australia’s history, where church agencies have been regarded as reputable providers of social services and have often been the pioneers in the development of new and innovative models of care.  The church in Australia has a strong tradition in identifying social concerns and delivering services that address all dimensions of the human person being attentive to ‘the spectrum of social, emotional and spiritual support needs of individuals’ (Evans, 2004).  It is this holistic mission that contributes to the unique characteristics of religious based charities. It is this mission that is under threat in a competitive contracting environment.

The question needs to be asked by all faith-based organisations delivering government funded services: whose mission are we delivering?



Austin, M J, (2003), 'The Changing Relationship Between Nonprofit Organizations and Public Social Service Agencies in the Era of Welfare Reform', Nonprofit and Voluntary Sector Quarterly, vol. 32, no. 1, pp. 97-114.

De Carvalho, D, (1994), ‘Does Charity Begin At The Marketplace?’ Quadrant December 1994.

Evans, C, (2004), ‘Valuing Care: A Heathen Perspective’, in ‘Church and Civil Society: A Theology of Engagement,’ Eds. Francis Sullivan and Sue Leppert,  ATF Press, Adelaide.

Gregg, S. (2000), 'Playing with Fire: Churches, Welfare Services and Government Contracts.', Issue Analysis [CIS], vol. 14, pp. 1-8.

Murphy, J. (2011), 'Church and State in the history of Australia welfare', Hilary Carey & John Gascoigne (eds), Church and State in Old and New Worlds, Brill, Leiden/Boston, pp. 261-285.

Smith, S. R., and Lipsky, M. (1993), ‘Non-profits for hire: The welfare state in the age of contracting’, Harvard University Press, Cambridge MA.


Wilma Gallet is a social policy consultant who has worked with many of the major church-related charities in Australia. She was the founding CEO of The Salvation Army Employment Plus which went on to become the largest provider of government funded employment services in 2000. She is currently undertaking a PhD focussing on the impact of government funding on the mission, values and behaviour of church-related organisations operating as part of Job Services Australia.

Posted by Kathy Landvogt