Guest Blog: Voluntary Parents Services Co-op to assist school P&Cs

22 May 2014

There are 2,350 schools in NSW with volunteer parent bodies who support their children’s school. They raise over a a hundred million a year to improve schools. These organisations no longer fit the television image of cake days and sausage sizzles, these organisations have become complex small businesses.   Volunteer executives have increasingly looked for support with business services and advice. On the 17th of April Parents and Citizens organisations (P&Cs) from Killara High School, Cammeray Public School, Lindfield East Public School, Killarney Heights High School and North Sydney Demonstration School formed Voluntary Parents Services Co-operative to meet this demand.

To best convey the issue faced by volunteers in this role, I will share my experience volunteering as a P&C president.   I quickly found out that as part of a small executive, I was responsible for 250 parent volunteers, three staff, two businesses selling food and clothes and had annual revenues of $450,000. We were responsible for Work Health and Safety (OHS) for volunteers and staff.   We had a payroll, superannuation, GST, tax, insurance, long service leave, sick leave, workers compensation, food safety and more to deal with. We had at times up to $800,000 sitting in bank accounts and we were looking to borrow one million for a library redevelopment. We were managing $300,000 of building projects. We needed accounting systems, eftpos, stock management, events management, customer relationship management systems and more.   I realised that I had just become a CEO of a complex small business for no pay.   In fact we were running a business large enough to place it in the top 40 per cent of businesses in Australia. Whilst this is a large public high school it does demonstrate the level of challenges volunteers face.

As a CEO in my paid job, I have access to lawyers, accountants and industry bodies for advice and support. But as a P&C president, there was little available. I was lucky as I had commercial knowledge and contacts, but for many volunteers, they don’t have commercial experience and sadly we have seen P&Cs having to use fundraising to pay penalties for breaches from superannuation to taxation issues.   This was a driver for me and others to form an organisation to fill this gap.

Based on 15 years’ experience with mutual banking, I suggested to the founding members, that forming a co-operative was the best way to ensure this was an organisation owned by P&Cs and run by P&Cs, where the beneficiaries were P&Cs.

As with other co-operatives, we saw that we could use the group buying power of thousands of P&Cs to negotiate a better deal with suppliers.   For instance, we are currently negotiating to halve the insurance premiums that school P&Cs pay, which are excessive compared to similar organisations.

School P&Cs needed better value from banking services from eftpos machines, to transaction fees, to interest on deposits. They needed better IT products and services as well as support aligned to the needs of volunteers.   There are also food ordering, uniform purchasing and more that a group buying approach would benefit members.

We also needed to support the transitional nature of P&Cs. Executives tend to roll over every two years creating continuity issues for P&Cs.   Through the co-operative providing business services, we can help with continuity from providing training and support to providing services such as book keeping and payroll services.

The advantage of the co-operative is that the group buying, not only benefits larger schools that I am involved in, but we could pass on the benefits to indigenous and disadvantaged schools.   A city school may be purchasing uniforms for 1,500 students whilst a remote school may only have 20 students.   If we could combine the purchasing of uniforms, the small school would receive the same savings as the big school.

We also are building advisory services. Where a school P&C can get help from setting up a tax deductible building fund to how to deal with an unfair dismissal issue with a staff member. We are building relationships with a number of organisations to assist with canteen awards and food safety through to Out of School Hours Care.

One of the challenges was to ensure that the co-operative was run by people with commercial experience. We needed to build transparency, and accountability into the rules to ensure a high level of governance. We built into the rules that directors have to do the Australian Institute of Director’s directors training course to ensure directors understood their obligations and that such a commitment would discourage inappropriate candidates. Director candidates needed to bring skills to the table such as legal, accounting, marketing as would be expected in board rooms across Australia.

The biggest challenge we have had to forming the co-operative was a lack of up front capital.   In other business structures, there is a speculative opportunity of financial gain for those who take the risk of providing up front capital.   However for a co-operative, founding members are putting up the upfront capital out of their pockets for no financial gain.   Even this investment is not enough to get the business up and running to the level that it needs. Volunteers who have paid jobs are trying to run a business out of spare time instead of employing a person to do the job, whilst the organisation is growing to a sustainable size.   I would like to thank Jenni Mattila of Mattila Lawyers who has assisted us in starting up the co-operative and this has been greatly appreciated.

As a sector, I believe that the co-operative movement needs to look at ways to help new co-operatives to get up on their feet.   Whether it is an industry fund that mutuals and co-operatives contribute to that forming co-operatives could borrow from. Or alternatively, seconding staff to help with formation of the business.   We need to make it easier to form co-operatives to build momentum in this sector.

Another challenge is the government regulation. Despite two months of work putting together rules and disclosure statements with lawyers, it took nearly two months for the regulators to approve us.   We were juggling with vendors we were trying to negotiate with.   We lost potential staff who got other jobs in that timeframe.   As we were not an incorporated body, we did not have bank accounts, the formation executive were having to sign pre-formation agreements with no limited liabilities and there are difficulties to insure the individuals involved.   Frankly it was an unacceptable process that needs to be changed.   I believe that it should be a two stage process where an organisation is first incorporated. That structure clarifies a legal entity for formation directors to work in. Then a second stage of having rules and disclosure statements approved to invite members to join.

In conclusion, whilst we have gotten over the hurdle of formation, we now have to convert this into a sustainable business. We are working on getting access to sponsorship and loans to fund the business development. We would like to work with other co-operatives and mutuals where we can build business together that is mutually beneficial. The obvious opportunity is to work with the mutual retail banking sector and I am sure that there are others we could work with.   We are working to set up a franchise type arrangement for Out of School Hours Care to meet the desperate shortage of vacancies and would like to work with others in achieving this. I would also like to than Melina Morrison CEO of the Business Council of Co-operatives and Mutuals for her assistance in introducing us to other co-operative leaders.

We are starting in NSW and plan to grow to support 10,000 plus parent voluntary organisations across Australia. We are both excited by the opportunity and awed by the challenge. However we hope in the next few years, Voluntary Parents Services Co-operative will be another glowing example of how co-operatives benefit communities.