In this essay, we explore the institutional embeddedness of the Sydney nonprofit sector via its changing relations with the state, market, and civil society. We explore the historical development of these relations and how these durable relations have shifted in recent years, putting pressures on the sector. The federal government’s effort to constrain advocacy practices has resulted in a tense relationship between the sector and the state. The push to introduce market mechanisms to generate resources for the sector and the rise of impact investing have pushed nonprofit organizations to explore financial innovations and into the now locally labeled “social economy.” These developments directly impinge on how nonprofits perform their roles by circumscribing the scope for advocacy and by putting nonprofits on a different path for financial sustainability. Compounding these shifts are the COVID-19 pandemic and the sector’s relationship with civil society. The pandemic underscored the importance of the work carried out by nonprofits and saw a resurgence in the sector’s relationship to civil society, while revealing the sector’s chronic fragility. By examining the institutional embeddedness of the nonprofit sector in this way, we provide a common framework for understanding a local nonprofit sector in the context of global changes, fostering future comparative work.

The Sydney nonprofit sector is home to some of the country’s oldest and most iconic charities. Along the coastline, one can find the now iconic Australian nonprofit that started in Sydney: Surf Life Saving (SLS) Sydney is the administrative arm for fifteen Surf Life Saving Clubs stretching from North Bondi Beach south to Burning Palms in the Royal National Park. It is an emergency service organization, with 16,557 volunteer lifesavers who are very proud of their record of never having recorded a drowning between the flags while on patrol since the organization’s establishment in the early 1900s. The role of SLS Sydney is to coordinate lifesaving activities, including club-based patrols and support services such as offshore rescue boats and rescue watercraft, as well as surf sports activities such as competition, coaching events, and representative teams. Having only admitted females into full active surf patrol duty in 1980, its recent emphasis on addressing inclusion and connecting with civil society in new ways focuses on women in leadership roles, elderly members, and joining celebrations of the globally renowned annual Sydney Mardi Gras Festival. It also has a growing role as an emergency service provider beyond the coastline, which has seen Sydney lifeguards providing support for flood events in parts of Western Sydney in 2020, and growing partnerships with New South Wales (NSW) state government in expanding services across remote areas of Greater Sydney national parks (Surf Life Saving Sydney 2021). In terms of its financial viability, this is an ongoing pursuit, yet the president of SLS Sydney recently commented that “the NSW Government has been generous with grants and capital works funding for our clubs. The Federal Government have also funded a sizable slice of our education and public safety programs at a national level” (Surf Life Saving Sydney 2021), with other major financial support coming from deep relations into the private sector including long-standing corporate partnerships, such as the twenty-year relationship with Sydney Airport.

Another iconic Australian nonprofit, yet one facing different challenges, is the Returned and Services League (RSL) and its subbranches across Australia. The largest veterans’ charity in the country is a membership organization founded in 1916 in Sydney. One of its earliest subbranches was established by the NSW government Maritime Services Board, at the time located at Circular Quay on Sydney Harbour. The Maritime Services Board relocated over the years away from the Harbour and the Central Business District to its current location in a far cheaper suburb in the inner west of Sydney, and the charitable RSL branch associated with it continued and persisted. It now hosts its meetings for veterans at Parramatta RSL Club, twenty-five kilometers from the Central Business District in what is considered Greater Sydney’s second major commercial center. As one of the earliest established branches of the national RSL network, it has members who are veterans of World War II and the Vietnam War, meaning that today, given their age, member numbers are declining. Holding meetings during Sydney’s first COVID-19 lockdown in 2020 was difficult, with members unfamiliar with or unable to use or access online communication options, such as Zoom or Facebook. Phone calls from member to member were used to check in, or the odd email for those who were online. Yet there are also other challenges. The branch, one of 340 branches of the national RSL, is also battling to remain relevant in its support for veterans in an increasingly crowded charity landscape. An increasing number of non-member-based veteran support organizations are attracting younger veterans who served, for example, in Afghanistan. The advocacy space is changing, as newer veteran organizations openly critique the government, leading to the establishment of a Royal Commission into Defence and Veteran Suicide in 2021. As the head of the NSW RSL reflected, “It’s a very competitive area. The public are very supportive of the RSL and what we do, but in this competitive landscape this is an important issue for us.”1

RSLs and Surf Life Saving Clubs and their divergent fortunes help us reflect on the factors shaping individual nonprofits in the Sydney sector’s evolving institutional environment, highlighting the shifting relations to the state, market, and civil society. With their high-touch, inward orientation coupled with the aging demographic profile and lack of technological savvy, RSLs seem out of tune in today’s highly competitive field of veteran’s services. The external reach of Surf Life Saving Clubs provides a stark contrast to the inwardness of RSLs. This volunteer-based organization has managed to reach out to and entrench itself firmly into local communities by participating in local events and providing support during crises beyond their normal duties. The organization’s scattered yet ubiquitous presence along the beaches hugging the coastline of Sydney belies its institutional connectedness, which has been cultivated through collaborative relationships with the state in different levels of jurisdiction and local businesses.

Cast in a slightly higher level of abstraction, they are typical nonprofits common in other cities around the world: membership-based organizations that help their own, and volunteer-based organizations that enrich associational life and quality of life. Indeed, the Sydney nonprofit sector has a lot in common with its counterparts in other places—for example, its diversity or heterogeneity with regard to activity, values, mission, and organizational attributes; the (growing) importance and contribution of the sector and its organizations to the economy; the complex and often fast-changing environments to which nonprofits need to adapt; and the relational dynamics and challenges facing nonprofit organizations as they interact with individuals and organizations from other sectors such as governments and businesses, as well as other nonprofits, in their efforts to achieve their mission and purpose (see Gilchrist and Butcher 2016). But what makes a particular national or local sector interesting is its embeddedness in a local institutional environment as reflected in the patterns of relations to other constituents of that environment. Thus, what makes the Sydney or even the Australian nonprofit sector interesting is both its similarity to others and its specific contours of differences.

In the context of both the common trajectory of development in the nonprofit sector around the world and the persistent variation across national contexts, there is much analytical and theoretical purchase in comparing the sector’s relation to the state, market, and civil society. It is the variation in these relations across levels of jurisdiction that serves as the basis for comparative analyses and can map the similarities and differences in the organization of civic life. In this essay, we draw on secondary data on the Australian and Sydney nonprofit sector to explore their institutional context, and draw on preliminary organizational data from an online survey that is currently underway to provide insights into the current organizational responses to shifts in relations with the state, market, and civil society. Thus, we ask: how have the sector and its organizational inhabitants responded to the changes in the sector’s institutional environment, particularly in relation to the state, market, and civil society?

Institutional embeddedness refers to the relations and interconnections between a population or community of organizations and its institutional environment (DiMaggio and Powell 1983). The nonprofit sector is situated in a set of relations to the state, market, and civil society because of the sectors’ indispensable contributions to social service provision and civic engagement and advocacy. Nonprofits provide necessary services and programs for their communities—geographic and otherwise—and fulfill important associational, civic, political, and advocacy functions, often against the state and other entrenched and powerful interests, on behalf of their constituents and other un(der)represented groups in society. In so doing, they enact civil society by generating participation and solidarity through their organizational activities (Clemens 2006; Hwang and Suárez 2019; Sampson et al. 2005; Alexander 2006; Mosley, Suárez, and Hwang 2022). They may establish private-public partnerships for service provision, compete and collaborate with for-profit businesses, and form alliances with other nonprofits for collective action and efficacy. Anheier, Lang, and Toepler (2020, 656) describe the relational embeddedness of the sector in terms of institutional complexes: “the nonprofit sector emerged over time in ways that involved complex and conflictual interactions with other institutions. In many cases, it created overlaps with them: markets with social enterprise or cooperatives; the state with public authorities, quangos, and public-private partnerships; and civil society with social movements and forms of civic engagement.”

Our theoretical perspective also draws on the observations of Powell and Bromley (2020, 599), who show that “there has been a massive expansion of nonprofit activity worldwide and an explosion of advocacy activity including social movements, especially since the 1990s.” In this period, the proliferation has not been limited to liberal systems but has occurred across national contexts that “differ in their most elemental features” (Bromley 2020, 123; Schofer and Longhofer 2020). Worldwide, the expansion of the nonprofit sector has also been accompanied by the sector’s increasing formalization and professionalization (Hwang and Powell 2009). And yet paralleling these broad global shifts are the enduring differences across national traditions and contexts reflecting cross-national variation in terms of the sector’s shape, size, and composition (Anheier, Lang, and Toepler 2020; Anheier 2014; Salamon and Anheier 1998; Fourcade and Schofer 2016; Schofer and Fourcade-Gourinchas 2001). Thus, the nonprofit sector’s position in the institutional environment as depicted in the patterns of relation to the state, market, and civil society provides a useful analytical framework to make sense of variation and commonality in the nonprofit sector around the world.

In mobilizing this theoretical perspective, we first present the organizational landscape of the nonprofit sector in Australia and in the Sydney metropolitan region (Greater Sydney, as it is formally known) and discuss some of the local and historical conditions that have shaped the contemporary nonprofit sector. We then discuss current relations to the state, market, and civil society by investigating concerns and challenges around advocacy, nonprofit financing, and COVID-19. In doing so, we reveal the shifts in these relationships: (1) the currently tense and hostile relationship between the state and the sector due to the state’s increasingly intrusive efforts to circumscribe the scope for advocacy and the sector’s resistance; (2) the increasingly close relationship between the market and the sector as the financing of nonprofits moves toward more market mechanisms and models; and (3) the fragile yet critical relationship with civil society, as recently revealed through nonprofit capacity in terms of the COVID-19 crisis. We then discuss implications for the future of the Sydney nonprofit sector and the value of theoretically focusing on the relations to the state, market, and civic engagement to understand the institutional fabric of the sector locally and globally.

Composition of the sector. Historically, it has been estimated that “Australia has a relatively large third sector…equivalent in size to the third sector in the United States” (Lyons [2001] 2020, 97). A more recent observation from the Johns Hopkins Comparative Nonprofit Sector Project based on its database as of 2016 estimated that the size of the Australian nonprofit sector as measured as a share of the economically active population was 5.9 percent, which was slightly larger than the average of the forty-one countries included in the dataset (5.6 percent) and slightly smaller than that of the United States (6.2 percent) (Anheier, Lang, and Toepler 2020, 651–52).

The latest organizational profile of the sector, the seventh edition of the annual Australian Charities Report, published in 2019, portrayed a thriving nonprofit sector in Australia. Based on the data from 2019 on more than forty-eight thousand charities registered with the Australian Charities and Not-for-profits Commission (ACNC), the report captured the state of the sector before two catastrophic events—the Australian bushfires of 2019 and 2020 and, of course, the still unfolding COVID-19 global pandemic. In 2019 the sector, while employing 11 percent of the country’s workforce (or 1.38 million workers), saw its revenue grow by AUD 10.5 billion or 6.8 percent to AUD 166 billion and outperformed the Australian economy, which grew by 2.2 percent. Government funding, which is the single largest item in the sector’s overall revenue, increased by AUD 4.4 billion to AUD 78.1 billion, but this increase was smaller than the increase in the previous year, which was AUD 5.6 billion. Donations increased by a bigger margin (AUD 1.3. billion) to AUD 11.8 billion. The contribution to revenue from the sales of goods and services also increased, totaling AUD 56.7 billion, an increase of AUD 3.5 billion from the previous year. The sector’s total assets reached AUD 350 billion—an increase of AUD 30 billion from the previous year. Of the more than forty-eight thousand organizations covered in the report, 30.1 percent had annual revenues of less than AUD 50,000; 21.3 percent had between AUD 50,000 and AUD 250,000; 14 percent of the charities had a revenue between AUD 250,000 and AUD 1 million; slightly over 18 percent had revenues of more than AUD 1 million; and 16.3 percent did not report financial information. These organizations are “basic religious charities” that are not required to report their financial information, but 83 percent indicated that their revenue was less than AUD 250,000. The aggregate financial data point to a thriving, expanding sector. However, the number of volunteers declined from the previous year, which is a concern for a sector in which 51 percent of the organizations are purely volunteer-based, operating without any paid employees. Smaller nonprofits relied more heavily on volunteers and donations, and larger organizations tended to rely more on government funding and revenues from market sources (sales of goods and services and investment incomes). In terms of the activity areas, the most populous field was religion (29.8 percent), followed by education and research (19.5 percent) and social services (9.7 percent).

Historical and institutional conditions shaping the sector. While a comprehensive historical treatment of the sector is beyond the scope of this essay, it is worth noting several historical events that have importantly shaped the current contours and relational configurations of the Sydney nonprofit sector and the nation. Lyons ([2001] 2020, 22), a foremost historian of the Australian third sector, describes how Australia’s colonization by the British, some two hundred years ago, and the importation of ideas and practices from the colonial center shaped the sector’s development: “middle class notions of charity and a strong lower class tradition of mutual association and democracy…and a powerful commitment to amateurism in sport.” Charitable works were a strong part of the Victorian notion of duty, which laid the seeds for a society with comparatively high rates of volunteering. Government encouraged business enterprise, bringing in labor and capital, building national transport infrastructure, and ensuring that every child received an education. Yet at this time, government authorities were reluctant to intervene in other areas of social policy, and instead of “directly providing for the poor and sick, they encouraged leading colonists and their wives to form and support nonprofit organizations to provide services”; these were called “public charities” (Lyons [2001] 2020, 14). Managing colonial disputes between Catholics and Protestants led to the creation of a sectarian public education system, and in response the development of nonprofit religious schools and associated religious service providers in education and other areas of health and social policy. Some of these religious providers are now the largest providers of education, aged care, and disability services in Sydney and across the nation, which provides insight into the high proportion of religious nonprofit organizations in our primary data collection on the sector.

Over this period, as the wealth of the colony increased thanks to wool, wheat, and gold, Australians who had regular work or were self-employed were able to make provision for possible hardship, such as sickness or unemployment, and save to purchase their own home via mutual associations (such as friendly and building societies) and credit unions, also imported from Britain (Lyons [2001] 2020). Many of these have now demutualized and have become for-profit endeavors. The same spirit of collective action drew many employees into trade unions and led farmers to form cooperatives. Sporting associations also thrived during the nineteenth century—there was geographic space, good climate, and leisure time (thanks to the forty-four-hour week won by the unions), with the amateur sporting movement encouraging participation in activities from cricket to surfing as character building and part of national identity. Many of these organizations are based in Sydney and have professionalized over the years, becoming national and global for-profit enterprises. Australia’s participation in both world wars profoundly affected the country, of course, and led to the creation of the national ex-services charities (such as the RSL, mentioned above) and an expanded federal government role in taxation, with the consequent provision of pensions and health and social services, as well as a decline in individual philanthropy. Immigration dramatically changed the demographics of Sydney and Australia in the post–World War II period (with Sydney being a first point of arrival), and the increased ethnic diversity was also expressed in associated cultural, educational, and religious nonprofit organizations. Moreover, when indigenous Australians were counted in the population census for the first time in 1970, a network of legal, medical, housing, and land cooperatives emerged to support First Nations peoples and those in remote communities.

In more recent years, since the 1990s, under global waves of neoliberalism, the state has retracted in its role in the direct provision of social services: “…all Australian jurisdictions have outsourced significant shares of human services delivery to NFP organisations—usually via competitive contracting and tendering or, more recently, via experimental instruments such as social benefit bonds” (Gilchrist and Butcher 2016, 7). In Sydney, the sector was shaped by this approach at both the federal and the state levels, where a focus on social enterprise and market mechanisms for financing social services has been the dominant approach.

A restrained culture of philanthropy by the wealthiest in the population is reflected in the low rate of giving among the rich in Australia compared to their counterparts in comparable countries such as the United Kingdom, Canada, and the United States; indeed, of those earning more than AUD 1 million per year, 37 percent did not claim a single dollar of tax-deductible charitable giving (Dalton and Cham 2016). Nevertheless, Sydney boasts a large proportion of the nation’s philanthropists, and vast sums of philanthropic money in recent years have come from the mining boom and consequently have been distributed to others. In 2001 foundations—known as private ancillary funds, or PAFs—became a very popular legal form and are the main vehicles for philanthropy in modern Australia. PAFs are private funds established for public purposes, and government policy provides significant tax concessions. Yet rather than bastions of altruistic giving, they are more commonly considered forms of tax minimization, and there are many calls for Australia to adopt the US practice of “glass pockets,” where foundations are legally compelled to provide data on their activities and distributions (Dalton and Cham 2016). These historical events and processes illustrate the changing patterns of institutional embeddedness of the nonprofit sector, and the historical development of its relations with the state, market, and civil society.

Greater Sydney and its nonprofit sector. According to the Australian Charities Report, about 70 percent of charities are located in major cities, and 28.1 percent operated only in the state of New South Wales, which has the largest concentration of charities among the states and territories. As part of the Civic Life of Cities project, we chose to study the nonprofit sector in the Sydney metropolitan region in the state of New South Wales—the most populous metropolitan region in the most populous state in Australia, home to 31.8 percent of the nation’s population.

Figure 1. Greater Sydney.

Source: https://www.abs.gov.au/websitedbs/censushome.nsf/home/factsheetsgeography/$file/Greater%20Capital%20City%20Statistical%20Area%20-%20Fact%20Sheet.pdf.

Figure 1. Greater Sydney.

Source: https://www.abs.gov.au/websitedbs/censushome.nsf/home/factsheetsgeography/$file/Greater%20Capital%20City%20Statistical%20Area%20-%20Fact%20Sheet.pdf.

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Geographically, Greater Sydney is fringed by the Tasman Sea to the east, the Blue Mountains to the west, the Hawkesbury River to the north, and the Woronora Plateau to the south. Greater Sydney, as classified by the Australian Bureau of Statistics, covers 12,368.2 square kilometers and is made up of thirty-five local councils. As of 2016 the population of Greater Sydney was more than five million; thus, more than one of every five Australians live in the Greater Sydney area. Economically, Sydney’s influence is even greater, as the economic and financial center of Australia. Its estimated GDP as of 2016 was more than AUD 400 billion, or approximately one-quarter of Australia’s total output.

European settlement began in Sydney in 1788, and since then Sydney has been the hub of a number of migrant communities. In the nineteenth and early twentieth century, people came from England, Ireland, and China. Today, Sydney has notable Fijian, Ghanaian, Lebanese, Korean, and Nepalese immigrant communities. As such, the area is culturally and linguistically diverse, with close to 40 percent of the population having been born overseas. In the 2016 census, Sydney’s most common ancestries, as a proportion of persons who listed their ancestry, were English (27 percent), Australian (25 percent), Chinese (10.8 percent), Irish (9.2 percent), Scottish (6.8 percent), Italian (4.5 percent), and Indian (4.3 percent).

Sydney is culturally and demographically diverse and prides itself on being a global city. It developed as the financial hub of the nation and the first port of entry for waves of immigrants, international travelers, and global corporate subsidiaries. It is constantly ranked in the world’s most livable cities indexes, often narrowly behind Melbourne. It also ranks as one of the most expensive cities in the world. While Melbourne is perceived as the “cultural capital” of Australia (for its support of the arts in particular), Sydney promotes its natural beauty and Harbour, and continues to maintain political and economic influence over Australia, with all three prime ministers over the past decade coming from Sydney (White 2021).

Table 1. Sydney Charities, 2019
Overview 
Total number of organizations 15,577 
Small charities (revenue less than AUD 250,000) 10,034 (64%) 
Medium charities (AUD 250,000–999,999) 2,741 (18%) 
Large charities (AUD 1 million or more) 2,802 (18%) 
Distribution by main activity 
Religious activities 4,750 (31%) 
Primary and secondary education 1,455 (9%) 
Other education 1,402 (9%) 
Grant-making activities 1,081 (7%) 
Social services 903 (6%) 
Culture and arts 870 (6%) 
Economic, social, and community development 721 
Other health service delivery 545 
Civic and advocacy activities 427 
Aged care activities 405 
Environmental activities 290 
Emergency and relief 289 
Higher education 228 
Research 207 
Housing activities 203 
International activities 202 
Mental health and crisis intervention 198 
Animal protection 174 
Other philanthropic 161 
Other recreation 154 
Employment and training 142 
Hospital services and rehab activities 117 
Sports 116 
Income support and maintenance 70 
Law and legal services 61 
Overview 
Total number of organizations 15,577 
Small charities (revenue less than AUD 250,000) 10,034 (64%) 
Medium charities (AUD 250,000–999,999) 2,741 (18%) 
Large charities (AUD 1 million or more) 2,802 (18%) 
Distribution by main activity 
Religious activities 4,750 (31%) 
Primary and secondary education 1,455 (9%) 
Other education 1,402 (9%) 
Grant-making activities 1,081 (7%) 
Social services 903 (6%) 
Culture and arts 870 (6%) 
Economic, social, and community development 721 
Other health service delivery 545 
Civic and advocacy activities 427 
Aged care activities 405 
Environmental activities 290 
Emergency and relief 289 
Higher education 228 
Research 207 
Housing activities 203 
International activities 202 
Mental health and crisis intervention 198 
Animal protection 174 
Other philanthropic 161 
Other recreation 154 
Employment and training 142 
Hospital services and rehab activities 117 
Sports 116 
Income support and maintenance 70 
Law and legal services 61 

Source: ACNC database, 2019.

Table 1 provides the distribution of organizations based on the size of revenue and also by main activity in the Greater Sydney nonprofit sector in 2019, the most recent year for which data are available. There were 15,557 organizations that submitted the 2019 annual information statement (AIS). As with the national population, most of the nonprofits were small (64 percent). The proportion of nonprofits with more than AUD 1 million in revenue was also identical to the national figure (18 percent). Religion and education were the top two categories in terms of main activity. As we discussed earlier, in the historical development of the Australian nonprofit sector, religion played a significant role in the sector’s formation and growth in multiple ways (Lyons [2001] 2020). Charities have been a vehicle for maintaining the organizational presence of one’s belief in society, and the proliferation and density of organizations indicating religion as their main activity point to the growing diversity of Australian society after waves of immigration in recent decades. Religion also has had a central role in the growth of education, resulting in the formation of schools with religious identities and affiliations. Therefore, these two activity areas reflect a historical legacy and the present-day diversity of Greater Sydney. Although not reported in table 1, Sydney charities rely heavily on volunteers: 9,150 organizations were completely volunteer-based with no paid employees, a much larger number than the national figure. Twenty-nine percent of the charities received some form of government funding. Fifty-five percent reported having received donations.

To develop a sample of nonprofits operating in Greater Sydney, we identified all the charities operating in the Greater Sydney area (based on the postcodes) that have registered with the Australian Charities and Not-for-profits Commission, the national regulator of charities. The Charities Act establishes the statutory definition of charity. In order to be recognized as a charity, an organization must (1) be not-for-profit; (2) have only charitable purposes that are for the public benefit; (3) not have a disqualifying purpose; and (4) not be an individual, a political party, or a government entity.2 Charities are not required to register with the ACNC, but with registration charities become eligible for the Commonwealth’s tax concessions (such as income tax exemption and tax deductible donations) determined and administered by the Australian Tax Office. Once registered with the ACNC, charities are required to submit an AIS about their activities and finances. Certain charities are exempt from this requirement. The most notable exceptions among them are basic religious charities, which are registered with the purpose of “advancing religion.” When these organizations meet certain criteria such as not receiving government grants greater than AUD 100,000 in the current reporting period or the two previous reporting periods, they are not required to submit an AIS.

When drawing a random sample, we used the most recent data available to us in late 2019 from the ACNC. We first eliminated basic religious organizations. Their exemption from submitting financial information, as with churches in the United States, makes systematic comparisons with other types organizations difficult. However, organizations with religious affiliations including churches that are not classified as basic religious organizations remained. We also excluded organizations whose primary purpose was grant-making.

The primary data were collected as part of international research collaboration—the Civic Life of Cities Lab (CLC), exploring what nonprofit organizations in different cities (San Francisco, Seattle, Shenzhen, Vienna, and Singapore) around the world contribute to society (see www.civiclifeofcities.com). After several disruptions precipitated by Australian bushfires and COVID-19 lockdowns, we are still collecting data. Therefore, we report preliminary results from our survey based on the responses to the relevant questions by seventy-three sample organizations from Greater Sydney. Further, we consult secondary sources (including media and sector-wide reports from varying associations and enterprises, and documentary sources from individual nonprofits such as annual reports and websites) extensively to examine the changing institutional relations and organizational responses. Overall, our strategy is twofold: to use the data and analyses from secondary sources in our portrayal of the institutional context and to delve into our original data from the survey to detail the responses by Sydney-side nonprofits.

Although the seventh edition (2019) of the annual Australian Charities Report portrays an expanding, if not thriving, nonprofit sector in Australia, our preliminary data analysis and other sources of sector commentary beyond the regulator present contrasting views on the challenges confronting the Sydney sector and the institutional pressures to which it is responding. We identify three key issues that provide insight into the shifting institutional context via the relations between the Sydney nonprofit sector and the state, market, and civil society, highlighting concerns over advocacy, financing, and operating in the ongoing pandemic.

State-nonprofit relation: Advocacy and contesting the federal government. Advocacy occurs when a nonprofit “focuses on supporting, promoting, or defining a certain cause or proposal in an attempt to change laws, policies, practices, and attitudes” (Almog-Bar and Schmid 2014, 13), engaging in a process of social change. McCarthy and Castelli (2002) defined advocacy as an activity that enables the protection of basic civil rights. It involves lobbying or disseminating information directed toward broad societal objectives or collective goods rather than outcomes of benefit only to their own members (O’Neill 1989). Advocacy can be explicitly political in that it attempts to influence government policies and decisions to improve the lives of underprivileged people and protect their basic rights (Boris and Krehely 2002; Jenkins 2006; McCarthy and Castelli 2002).

Shifting institutional context. For nonprofit organizations in Sydney, as for all charities in Australia, advocacy is protected as a charitable purpose of “advancing public debate” in the Federal Charities Act (2013). According to the national regulator, this means that “A charity can promote or oppose a change to any matter of law, policy or practice, as long as this advocacy furthers or aids another charitable purpose.” However, a charity must not have a “disqualifying purpose.” The ACNC states:

purposes that will disqualify an organisation from being a registered charity are: - engaging in, or promoting, activities that are unlawful, - engaging in, or promoting, activities that are contrary to public policy, or - promoting or opposing a political party or candidate for political office.

While the state-nonprofit relations are multifaceted, the advocacy function of the nonprofit sector in Sydney and Australia more broadly has become the focus of new government legislative amendments. In 2021 a proposed bill sought to expand the powers of the sector’s regulator, the ACNC, by allowing it to investigate and deregister charities for engaging in or promoting a range of minor offenses. The proposed bill was one recent example of the coalition government’s efforts to silence Australian civil society. Maddison and Carson (2017, 12) chronicled the development under the coalition government:

The election of Tony Abbott in 2013 saw a return to some of the Howard era ideas about the role of civil society in public debate and renewed attempts to stifle dissenting voices from the sector… Malcolm Turnbull’s government seems less overtly hostile to civil society advocacy but, as discussed above, constant change in the regulatory and political environment has left many organisations feeling anxious and vulnerable. Indeed, there remains considerable concern that the current federal government is “chipping away” at the foundations of Australian democracy.

Representatives from the sector warned that the changes would threaten entire organizations with deregistration on the mere suspicion of a minor offense —trespass or harassment, for example—and would restrict their ability to engage in protests. When the federal Senate voted against the proposed changes in late 2021, some of the sector’s largest organizations, such as Sydney-headquartered Anglicare Australia, said “the vote is not just a win for charities and the people we serve, it is a win for democracy. If they had been allowed to stand, the rules would have meant that charities could be targeted and shut down for subjective reasons…They were designed to stop organisations like Anglicare Australia from speaking up for our communities by punishing us” (Karp and Knaus 2021). Human Rights Law Centre’s Alice Drury said, “This is an important win for human rights and for charities across Australia at a time when their advocacy is more important than ever” (Karp and Knaus 2021).

However, another bill, labeled as the “political campaigners bill” and passed by the Senate at the same time, lowers the threshold for disclosure of political spending from AUD 500,000 to AUD 250,000. It also broadens the definition of “electoral matter,” requiring political campaigners to declare any spending “in relation to an election,” a broad definition that nonprofits fear will exaggerate their attempts to influence voters. The amendments also broaden the definition of political campaigners to organizations that operate for the dominant purpose of fundraising for electoral expenditure—a move some fear is directed at grassroots nonprofit fundraising organizations.

In a recent “commissioner’s column” published on the ACNC website, in a similar vein, the Honorable Dr. Gary Johns reminded charities: “…with a federal election looming, it is important that charities and their Responsible People ensure any advocacy or campaigning complies with ACNC guidelines and does not threaten the charity’s registration. Just this week we wrote to a charity over some material they were distributing which was likely to be construed as opposing a political candidate or party.”3

Responses to the shifting institutional context. Our preliminary analysis based on the survey data collected so far shows that Sydney nonprofits engage in a variety of activities that could be broadly considered organizational advocacy (Mosley, Suárez, and Hwang 2022) Overall, almost all nonprofits in the sample indicated that they engage in advocacy (95.9 percent), as reported in table 2; table 3 shows that a significant portion of the sample charities reported that they engage in some form of political activity (75.3 percent). These overwhelming responses suggest that almost all Sydney nonprofits embrace the dual role of service provision and advocacy (Hwang and Suárez 2019). Although nonprofit taxonomies like the one we used to describe the activity distribution earlier include advocacy as an activity area, advocacy is a fundamental part of nonprofit identity for most nonprofits. They promote, in a narrower sense, political civic activity (such as signing petitions, boycotting brands and products, and contacting political representatives) and in a broader sense engage in public discourse (e.g., issuing public statements, speaking at public workshops, or being a voice of a group or a topic). Indeed, most Sydney nonprofits indicate that the civic engagement and advocacy role is an essential part of their work.

Table 2. Promotion of Political Civic Activity (N=73)
Vote in elections 30.1% 
Run for public office 17.8% 
Organize a rally 5.5% 
Participate in a rally 16.4% 
Attend public meetings 34.2% 
Boycott brands or products 9.6% 
Sign petition 34.2% 
Contact government representatives 49.3% 
Discuss the organization’s cause with others 63.0% 
Any political engagement 75.3% 
Vote in elections 30.1% 
Run for public office 17.8% 
Organize a rally 5.5% 
Participate in a rally 16.4% 
Attend public meetings 34.2% 
Boycott brands or products 9.6% 
Sign petition 34.2% 
Contact government representatives 49.3% 
Discuss the organization’s cause with others 63.0% 
Any political engagement 75.3% 
Table 3. Advocacy Activities/Goals (N=73)
Developing standards in organizational domain 76.7% 
Being a public voice for a group or topic 82.2% 
Speaking at public workshops 76.7% 
Issuing public statements 67.1% 
Hosting public meetings or hearings 17.8% 
Hosting a rally, demonstration, or march 6.8% 
Any advocacy activity 95.9% 
Developing standards in organizational domain 76.7% 
Being a public voice for a group or topic 82.2% 
Speaking at public workshops 76.7% 
Issuing public statements 67.1% 
Hosting public meetings or hearings 17.8% 
Hosting a rally, demonstration, or march 6.8% 
Any advocacy activity 95.9% 

Given the importance of advocacy, nonprofits responded to the growing encroachment by the state to constrain this unique feature of the sector: collective action. Indeed, our preliminary survey data show that 46 percent of sample organizations indicated that they collaborated with other nonprofits on advocacy. So naturally, in response to these legislative changes, an alliance of charities named Hands Off Our Charities (HOOC) mobilized and claimed that the category of political campaigner “conflates independent, issue-based advocacy with ‘party-political’ or partisan campaigning.” HOOC is an alliance of more than one hundred diverse charities (religious, indigenous, environmental) that formed in 2017 in response to a number of proposed federal government bills that they claim would have silenced charities on issues of national importance. Under the Charities Act, nonprofits are not permitted to be politically partisan and may engage in advocacy only in support of a charitable purpose. However, the alliance claims that this bill is “the latest of a long line of government attempts to silence civil society voices speaking” (Karp and Knaus 2021). Our data reveal that this national issue is dominant in the Sydney nonprofit sector, with many national charities headquartered in Sydney and publicly vocal about the impact of these changes.

Market-nonprofit relation: Financing and moves toward the market. In Sydney as elsewhere in Australia, the nonprofit sector increasingly plays an important role in delivering social services on behalf of the NSW and federal governments. The chairman of the Community Council for Australia, an independent member-based peak body of the nonprofit sector, recently stated that in Australia “much of what we think of as the social safety net that the government provides is actually dependent on charities that are contracted by government, to be the arms and legs, to be the vehicle of that safety net” (Secombe 2020). With the sector characterized by a few large, national nonprofits mostly headquartered in Sydney that operate large-scale social service contracts, the rest of the sector relies on philanthropic grants and personal donations. Yet there have been challenging times in recent years, with national taxation data showing declining rates of personal giving, an economy experiencing low wage growth, and suggestions that the rise of crowd funding sites are now competing for the charitable dollar (McGregor-Lowndes 2020).

Shifting institutional context. There has been a growing push by the state and philanthropists to introduce market mechanisms to complement and eventually supplant the traditional grant sources of nonprofit funding and finance. This intensified over the past decade, catalyzed by an investigation into the financial viability of the sector in 2010 by the federal government’s Productivity Commission. The commission was instructed to review the nonprofit sector and to investigate further measures to capture the contribution of the sector to Australian society and tax deductibility of donations, identify unnecessary regulatory burdens, and, more broadly, to look for ways to improve government funding to the sector and options to “optimise the relationship between government, business and the sector for the sector’s contribution to society” (Productivity Commission 2010).

The submissions to the commission and debates at the time led to a final report that suggested a role for social finance in funding the needs of the sector, the need for development of nonprofit governance and financing capabilities, and a role for government in building a market for social finance, or impact investing. These recommendations were perhaps unsurprising given the local and especially Sydney-led calls (from philanthropists and investors) for Australia to emulate the United Kingdom and its focus on impact investing, social impact bonds, and other payment-by-results contracting instruments being trialed in the United Kingdom. This new set of relationships that social finance and impact investing would require sees the federal government becoming an “enabler” and “catalytic investor” (Productivity Commission 2010), while other stakeholders are positioned on either the “supply” or the “demand” side of the impact investing market. Nonprofit organizations found themselves on the “demand” side of the desired market. And there were calls for the sector to adopt a market-based mindset and move away “from grant dependency towards an investment orientation” and become “investor ready enterprises,” which, in turn, would provide a new stream of resources (Social Ventures Australia 2011).

This push for a market for social finance has been reinforced by the Australian philanthropic sector’s effort to promote venture models, social enterprise, and impact investing instruments. Although usually only the largest nonprofits are engaged in novel market-based mechanisms such as impact investing deals (given the scale of deals required to attract investors and the staffing required to organize and govern in, for example, social impact bonds), many philanthropic organizations encouraged nonprofits to explore alternative organizational models such as social enterprises. For example, in recent years Philanthropy Australia (a membership organization for the philanthropic sector) partnered with one of Australia’s largest banks to provide matching funding (from contributions from their trust and foundation members) to create a grants program aimed at growing the number of social enterprises managed by not-for-profits (see https://www.philanthropy.org.au/about-us/Impact-Investing/). The same partnership also runs an educational program “designed to grow the number of trusts and foundations using impact investment as an investment strategy” (see https://www.philanthropy.org.au/about-us/Impact-Investing/).

This sustained interest and engagement in social enterprises is reflected in a national survey conducted in 2010 and 2016 titled “Finding Australia’s Social Enterprise Sector” (FASES) (Barraket, Mason, and Blain 2016). The report estimated that there are at least twenty thousand Australian social enterprises, taking into account that some not-for-profit organizations have multiple business ventures and not all social enterprises are incorporated as not-for-profits. “The FASES 2016 data suggest that, while the social enterprise sector includes many mature organisations, we are seeing growth in new entrants to the field, with 33.8% of the study’s sample being between two and five years old.” The report points to the range of nonprofit and for-profit organizational models in the sector: “As popular and policy interest in social enterprise has grown, we are seeing a substantial number of new entrants addressing a range of missions and using a diversity of business models.” Indeed, the nonprofit sector in Sydney and Australia now finds itself more market-like, with closer relations to the market than ever before, swept into what the government describes as the “social economy” (Productivity Commission 2010).

Responses to the shifting institutional context. Preliminary analyses of our survey data provide insights into the financial streams on which nonprofits are reliant. For the Australian nonprofit sector as a whole, government funding was the largest source of revenue. For the population of charities in Greater Sydney, 29 percent received some form of government funding, and over 50 percent relied on individual donations. Our sample data provide a more fine-grained look at the revenue sources. At the organization level, the largest source was individual donations (on average 33.1 percent), followed by earned or program-related income (on average 24.1 percent), and then government funding (20.7 percent). Corporate donations and foundation grants contributed on average 6.7 percent and 5.2 percent respectively to nonprofit revenues.

Table 4. Innovation in funding (N=68)
 Using Considering 
Crowdsourcing 10.4% 19.4% 
Impact bond 0.0% 4.5% 
Impact investment 3.0% 4.5% 
Increasing earned revenue or fees for service 18.2% 22.7% 
Program-related investments (PRIs) 6.1% 10.6% 
Strategic/venture philanthropy 9.1% 25.8% 
Taking contributions in cryptocurrencies  0.0% 0.0% 
 Using Considering 
Crowdsourcing 10.4% 19.4% 
Impact bond 0.0% 4.5% 
Impact investment 3.0% 4.5% 
Increasing earned revenue or fees for service 18.2% 22.7% 
Program-related investments (PRIs) 6.1% 10.6% 
Strategic/venture philanthropy 9.1% 25.8% 
Taking contributions in cryptocurrencies  0.0% 0.0% 

Confronted with a challenging funding environment, Sydney nonprofits in our sample are already experimenting or using alternative forms of financing or funding innovations. Not only have nonprofits sought to increase earned income (18.2 percent) and to invest in programs (6.1 percent), they have also pursued nontraditional sources of funding such as crowdfunding (10.4 percent) and strategic/venture philanthropy (9.1 percent). Moreover, more nonprofits in the sample indicated that they were considering crowdfunding and venture philanthropy going forward. In other words, Sydney charities are exploring a variety of ways to improve their financial sustainability, particularly further engagement with the market (earned revenues, program-related investments, impact investments, and impact bonds), and technology-aided approaches to expand individual donations such as crowdfunding. The emerging picture from our sample data is that of a sector that is at once reliant on shrinking government funding and individual donations, and responsive to the shifting funding environment to consider more commercial forms of financing and market-based forms of organizing.

Such organizational adaptation to the changing funding environment is illustrated by the iconic and long-standing Sydney nonprofit, the Wayside Chapel—known for its progressive pursuit of novel services, avoidance of government funding, and high-profile political and celebrity supporters. This nonprofit very recently expanded its operations from Kings Cross, an inner-city suburb of Sydney known for its nightlife, to Bondi Beach, to set up a social-enterprise café. The expansion was due to an opportunity to take over an existing chapel with a declining congregation yet in a prime locale in the expensive beachside suburb. It enabled the nonprofit to realize its desire to create a social enterprise that would provide employment pathways for unemployed youth. It also was a move to address other Sydney-based challenges. For example, Wayside was established in 1964 in an area of Sydney considered a mecca for disaffected youth, the city’s red-light district, known for its illegal gambling and drug culture. Today, Wayside finds itself in a rapidly gentrifying neighborhood, with new and expensive real estate developments vying to capitalize on the unaffordable Sydney housing market alongside upmarket wine bars. Wayside still remains close to its beneficiaries, who drop in daily and are provided with hot meals, showers, and medical support, but Sydney’s changing demographics mean that Wayside is increasingly far from the more vulnerable population now located in outer suburbs of Greater Sydney. The success of Wayside’s move into Bondi and more market-based activities led the nonprofit to develop an expanded range of social-enterprise projects and to relabel existing services—such as its existing op-shops (selling secondhand clothing) and other opportunities for employment training and pathways—as social enterprises.

In Greater Sydney, and in Australia generally, it is collectively understood and taken for granted that in times of crisis—bushfires, floods, droughts, and pandemics—charities will be there to help. Coming on the heels of a difficult summer of bushfires, however, the global spread of COVID-19 created a perfect storm for the nonprofit sector and its inhabitants. These two successive catastrophic shocks, as expected, sharply increased demand on the services provided by the sector, magnifying the sector’s characteristic resourcefulness yet also its chronic fragility.

Shifting institutional context. The demand for services, particularly in social and health services, increased dramatically during the first year of the pandemic and continued to rise into the second year, surpassing the sector’s capacity for service provision. A massive spike in demand for services coupled with government-imposed lockdowns required a shift in service delivery. Some nonprofits reported a “substantial digital uplift… as part of the reorientation of service responses and delivery channels,” either going partially or fully online in service delivery (Muir et al. 2020, 6). Predictably, the pandemic has significantly impacted the sector’s financial health and resource base. Most organizations reported a decline in revenues (Muir et al. 2020, 2021). Immediately after the bushfires of 2019–20, the sector saw a temporary surge in donations, which, ironically, meant that organizations not directly involved in bushfire relief efforts saw a reduction in donations. Indeed, donors appeared “tapped out” or were giving and redirecting funding to frontline charity groups that provide crisis services (Secombe 2020), which meant less money available for donations once the pandemic started. Charities were also limited in their fundraising options under lockdowns; they had no direct access to potential donors and/or were unable to organize fundraising events. A recent report by Social Ventures Australia and the Centre for Social Impact, investigating the role of charities in economic recovery based on modeling the latest financial data submitted by charities to the ACNC, found that a 20 percent reduction in revenue would see 88 percent of charities immediately experiencing an operating loss and would put 17 percent at high risk of becoming unviable and “closing their doors within six months, even when taking their reserves into account” (Social Ventures Australia and the Centre for Social Impact 2020).4

Further, volunteering, which had been in decline even before the pandemic, dipped significantly during the pandemic. Volunteering Australia (2020) reported that about 65.9 percent of volunteers stopped volunteering in the early months of the pandemic, estimating the reduction in volunteering at 12.2 million hours of volunteer work.5 The second year of the pandemic saw a continued decline in volunteering. Given that more than 50 percent of the ACNC-registered charities in Sydney are volunteer-based and operate without paid staff, the lost volunteer hours further diminished the capacity to respond to the increasing demand.

Responses to the shifting institutional context. The open-ended comments in our survey provide initial qualitative insights into the Sydney nonprofit sector’s responses. For example, a quick shift online was necessary, particularly during lockdowns, but created another set of issues: “The biggest challenge has been IT. We were not prepared to work from home with limited capacity for emails and access to files,” said an executive in one survey response. Digital capabilities and accessibility are not distributed equally among service-providing staff or the client base in need of services and support. An executive director of a nonprofit promoting physical exercise commented that “Moving services online…teaching face to face was not possible in lockdown. Reliable technology and/or devices were not available to all our participants.” Nor is digital delivery an appropriate or effective form of service provision for certain service recipients requiring more hands-on interaction. The leader of an early education center, when asked about the impact of COVID-19 and the organization’s plan for recovery, responded, “Main challenges have been to maintain active community involvement without physical gatherings. We will recover by increased attention to online service delivery and slowly introducing safe community gatherings.” The executive director of a community health organization identified “reduction in fundraising events and income” as a challenge but said, “we are continuing to engage with the community and establishing new channels for support.”

During the pandemic, as the western and southwestern suburbs of Greater Sydney were locked down with several more restrictions tied to outbreaks in 2021, a grassroots distribution network of food delivery emerged. As one local mayor commented at the time:

Our residents have been the most affected during this lockdown. We are a vulnerable multicultural community in need of assistance. Our community is very working class. The majority of them cannot work from home. They cannot take a laptop home and do their work from home. And many have exhausted their finances in staying home this long. People are hurting. They are struggling to pay the mortgage, the rent, their bills and put food on the table. People have been crying out for an end to the restrictions and curfews.

In lieu of any additional government support payments for this second and more severe lockdown affecting these more economically disadvantaged areas in Sydney, charities and volunteers stepped up to create, organize, and distribute food hampers and check in on members of the community, as one food hamper delivery charity commented: “[Grassroots organisations] are the mules, the workhorses—we actually engage with the humans that receive it. The big organisations get all the money, and so they should, but there should also be money going to these smaller on-the-ground companies that are the distributors.”6 The local sector’s resourcefulness—as reflected in coordination and collaboration across the sector, working with local schools, sorting groups, local charities, and local governments in times of great need—was again on show during this stage of the pandemic. The capacity to forge a network of support is the hallmark of the nonprofit sector. Our survey response showed that 25 percent of organizations collaborated with other nonprofits for service provision; 20.5 percent and 15.1 percent also indicated that they collaborated with government and businesses, respectively.

The financial fragility of the sector during the pandemic led to a collective response in lobbying the federal government for the sector to be included in emergency employee wage subsidies. Initially, the federal government decided that nonprofits were ineligible for financial support from the government, as the federally funded JobKeeper program was initially focused on supporting private enterprises. Nonprofits were included later after intense lobbying by the sector nationally. Although this was a collective success providing temporary relief, concerns remain. The CEO of the Community Council for Australia feared that within a year or two, many organizations would be transformed into “zombie charities”—that is, charities that exist but are no longer able to do their work: “I think we’re going to have thousands of zombie charities that have cut their programs, cut their staff, cut their services, cut their infrastructure, [that are] just trying to hang on until they can rebuild” (Secombe 2020). Many have entered what he describes as “the starvation cycle”: “where you cut all your infrastructure first to try and keep the programs going. And then you start cutting the programs as the money gets tighter” (Secombe 2020).

Internally, nonprofit organizations are also finding ways to sustain themselves and respond. A public health organization exemplifies this resourcefulness:

It has been a challenge to ensure that our facilities continue to provide essential services particularly to vulnerable communities and individuals. Some staff were able to work from home, which posed [its] own challenges such as work health safety and mental health. The cost of PPE, IT equipment, and cleaning of centres has placed a financial strain on the organisation. Redirecting/redeploying a high number of staff to other programs as face-to-face community programs ceased proved to be a challenge. A COVID-19 taskforce has been set up to monitor the situation on a weekly basis, addressing operational issues. Our marketing team has been working tirelessly to ensure that our clients, funding bodies, and supporters are kept informed of changes in services and programs.

Of course, not all nonprofits responded well, as our early example of RSL attested, but collectively, our data illustrate civil society in action as nonprofits engage in collective action and produce participation and solidarity for the public good.

Our preliminary survey findings, along with secondary data, indicate “shifting sands” when it comes to understanding the relationship of the Sydney nonprofit sector to the state, market, and civil society. While the changing relationship to the state is one colored by resistance and hostility in recent years, the relationship to the market seems closer than ever as the boundaries of the sector blur into a so-called social economy. The crises brought on by the Australian Black Summer and COVID-19 revealed both the fragility and the resourcefulness of the sector, as challenging times mobilize nonprofits into collective action. We observe legislative changes around advocacy described as attempts to silence the sector. We observe financial strains on charities post-crises leading concerns about increasing numbers of near-dead or “zombie” charities. We also observe the ongoing impact of COVID-19 leading to a physical emptying out of Sydney’s Central Business District and reduced in-person activity with beneficiaries and donors; and as Sydney is one of the most expensive cities in the world, we see beneficiaries and those in need being forced to move out of the city to its geographic periphery. While these relations are illustrative nationwide, we observe Sydney nonprofits, or the Sydney-based arms of global nonprofits such as Greenpeace, leading the public commentary on and critique of (for example) changing advocacy legislation. We see large Sydney-based nonprofits pursuing new models of social finance and impact investing, pioneering flagship deals such as social impact bonds,7 and generating a slew of social enterprises across the city.

More broadly, we consider the implications of our preliminary findings in three areas: (1) the value of our theoretical perspective for comparative analysis in understanding the institutional embeddedness of the nonprofit sector in regard to its relations to the state, market, and civil society; (2) insights into the changing boundaries of the sector theoretically and empirically; and (3) possible future challenges leading to a disembeddedness of the sector from the city.

First, while the aspects of these relations as highlighted by our data are not all-encompassing and can often be more or less nuanced, they provide important insights at a city (and perhaps national) level into how the nonprofit sector shapes the civic life of a city. As Anheier, Lang, and Toepler (2020, 673) observe, the distinction between the nonprofit sector and civil society is often ambiguous: “What separates civil society and the nonprofit sector is less what organizations fall under which category than the location of each within the wider society.” In this way, similar to the “varieties of capitalism literature” (Hall and Soskice 2001; Hall and Thelen 2009), this provides a framework for understanding the institutional similarities and differences between nonprofit sectors in cities around the world, since each sector can be compared by reference to the way it performs two primary functions—service provision and advocacy—in relation to the state, market, and civil society. We note here that we conceptualize nonprofits as the organized part of civil society having a primary role in generating civic engagement and solidarity as shown in the sector-wide collective response to the government’s attempt at muzzling the voice of civil society and the lack of support for the sector during the COVID-19 crisis.

Second, this relational approach to understanding the institutional context of a nonprofit sector raises important issues in regard to boundaries of the sector and its identity. Nonprofits have traditionally been described as the “third sector” (after the state and the market) and as the organized part of civil society; what are the implications for nonprofits simply becoming another organizational form (or way of organizing) in what is now labeled the “social economy”? Are they subsumed into the market? As nonprofits develop and manage for-profit social enterprises, and as for-profit enterprises pursue not just responsible but socially impactful activities at scale (Battilana and Lee 2014), increasingly competing with nonprofits, there is a need to consider how we theorize the boundaries of this sector (Logue 2019). These are important questions; as Enjolras et al. (2018, 2) have noted, the third sector is often lacking “recognition, common identity and awareness,” which has political and legitimacy consequences for resourcing in particular.

Third, our findings point to the need to reflect on the meaning of changing patterns of institutional embeddedness and the importance of place for civil society. As the pandemic forced nonprofits to go online, we observed that digital capabilities are not evenly distributed among service providers and service recipients. The loss of physical contact has meant less volunteering and donation for most nonprofits, and for some, even declining membership. In this context, what happens to localized or place-based civic engagement? With the impact of the pandemic still unfolding, will local and regional communities regenerate and be reinvigorated with community spirit? Will the digital realm dominate in terms of garnering community attention, replacing place-based activity and identity and making it easier to join global movements, participate in digital activism, and support local causes across the world, accessed through international civic crowdfunding platforms (Logue and Grimes 2019)? We are left to wonder what institutional infrastructure will be needed to attain local social impact and the fulfillment of social missions via these new forms of organizing.

In this essay, we share preliminary findings on primary data from the global CLC project on the Sydney nonprofit sector. Supplemented with the secondary data, we show the value in understanding where the sector “sits” in Sydney, and in Australia more broadly, by focusing on its relations to the state, market, and civil society and so revealing its institutional embeddedness. Sydney, as a global city and the most populous city in Australia, often leads on innovations and contestations, but its nonprofit sector is heavily conditioned by unfolding events at the federal level. We suggest that our framework of considering how a nonprofit sector relates to the state, market, and civil society is analytically valuable for making sense of the changes occurring in cities, and indeed in nations, around the world.

Hokyu Hwang is an associate professor in the School of Management and Governance, UNSW Business School, UNSW Sydney. His research examines the causes and consequences of organizational rationalization in a variety of contexts such as the nonprofit sector, higher education, and local governments. Danielle Logue is Associate Professor of Innovation, Entrepreneurship and Management at the UTS Business School, University of Technology Sydney. Her research examines organizations and markets engaged in processes of social innovation.

This research is supported by the Center on Philanthropy and Civil Society at Stanford University, Civic Life of Cities Lab (CLC). We thank the global members of the CLC Lab for excellent comments on successive drafts of this essay.

There are no competing interests with respect to the work and authorship of this research.

1.

See https://www.smh.com.au/national/membership-drops-as-rsl-competes-with-rival-charities-to-help-veterans-20191030-p535rv.html.

2.

See https://www.acnc.gov.au/for-charities/start-charity/legal-meaning-charity.

3.

See https://www.acnc.gov.au/media/news/election-year-it-vital-for-charities-know-rules-around-advocacy.

5.

See https://www.volunteeringaustralia.org/research/covid-19-research/research-briefing-the-experience-of-volunteers-during-covid-19/#/.

7.

See https://www.treasury.nsw.gov.au/projects-initiatives/social-impact-investment.

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