Commissioning Is Coming - Is Your Organisation Ready?

At Tribe, we specialise in helping you define the future profiles of Boards and Chief Executives in the for-purpose sector, and the capabilities they will need tomorrow look very different from those required of today’s leaders. We look at the unstoppable rise of funding commissioning and the resulting pressure for charities to merge and prepare. Our read at Tribe is that this trend will accelerate and not reverse. Let's explain…

Heart and Commercial Discipline

A shift is already underway in what “good” looks like at the top of a for-purpose organisation. The CEO of today needs the heart to hold the kaupapa and the people, and the commercial discipline to run a complex enterprise. The same is true for Boards.

As commissioning grows, Boards are increasingly governing large sums of money on behalf of others: taxpayers, donors, philanthropists, trusts, and government funders. That stewardship obligation is immense. It raises the bar on financial controls, procurement integrity, risk management, and evidence of impact. The work remains mission-led, but it must also be investment-grade.

This is not about becoming corporate. It is about being trustworthy at scale and being able to demonstrate that trust through transparent decisions, clear metrics, and consistent delivery.

A Massive Sector

New Zealand’s for-purpose sector is massive and still growing. There are almost 29,000 registered charities generating about $24.8 billion in annual income. New organisations keep entering the system year by year.

But the way funding is flowing is changing and not in the sector’s favour.

Today, funding isn’t growing as fast as demand. A recent study found that only 13% of programmes receive 73% of total investment. In other words, most money goes to a small number of providers. This is not just a temporary squeeze. It is evidence that the sector is moving to a new funding model, one focused on outcomes and delivery, not short-term fundraising.

What Commissioning Means - And Why It Matters

For decades, most charities raised money on a project-by-project basis. That world is changing.

Commissioning means larger, longer-term contracts awarded based on evidence of results, clear plans, strong governance, and the ability to deliver reliably over time. Funders are shifting toward this model because they want to see measurable impact for the money they invest.

This isn’t a distant future. It is happening now. New Zealand is actively building a commissioning approach.

We Think Commissioning is Going to Expand to More Sectors

Tribe has been involved in some aspects of governance in the Whānau Ora commissioning environment. One of the clearest signals of change in Aotearoa New Zealand is the evolution of Whānau Ora commissioning. The current procurement model explicitly sets up regional commissioning agencies with Investment Boards, a stronger measurement framework, and data requirements designed to show impact over time.

In the Whānau Ora commissioning services RFP, Te Puni Kōkiri set a FY2025/26 appropriated budget of $154.858 million (GST exclusive), and an indicative regional maximum funding allocation for Rohe 1 of up to $66.552 million for the 12 months commencing 1 July 2025. This is not a small experiment. It is a national-scale commissioning architecture, designed to prove that investment can be linked to measurable outcomes.

It is also a practical test of the hardest commissioning challenge: whether the system can agree meaningful metrics, gather consistent data, and demonstrate value for money without losing the human reality that sits behind every outcome line. That is the tension Boards and CEOs must now be able to lead: heart, plus commercial stewardship.

The Government’s Social Sector Commissioning Action Plan (2022–2028) commits agencies to work differently with organisations and communities to improve outcomes, including more strategic commissioning of services.

In 2020/21, government agencies and Crown entities commissioned an estimated $6-7 billion of social supports and services through NGOs, spread across nearly 19,000 funding arrangements. That is a major share of how social funding is delivered.

The sector is seeing more multi-year contracts, with 61% of government contract value going to agreements lasting three years or more. Longer contracts create stability but also raise expectations for performance and accountability.

Budget initiatives like the $190 million Social Investment Fund signal a stronger focus on measurable outcomes and evidence in commissioning decisions. These moves are not small tweaks. They show commissioning is becoming formal policy and practice in Aotearoa.

The International Rise of Commissioning

In the United Kingdom, health and social services funding has been brought together into large pooled funds such as the Better Care Fund. Instead of separate agencies funding separate services, money is combined and jointly governed by health and local government bodies. The goal is to align funding around shared outcomes and reduce siloed delivery. At the same time, local authorities are increasingly awarding contracts based not just on price or activity, but on demonstrable social value; meaning providers must show measurable community impact, not simply service volume.

In Australia, commissioning and co-commissioning models are being used to reduce fragmentation in social services. Different levels of government, state and federal, are working together to jointly commission services around shared outcomes. While this can increase administrative complexity, it aims to reduce duplication and create more integrated delivery systems. Organisations are also responding by merging or forming structural alliances to achieve the scale required to operate effectively in commissioning environments. The formation of Uniting Vic. Tas, which brought together multiple entities across states into a single, larger service provider, is one example of this structural adjustment.

New Zealand Rise of Commissioning

For New Zealand providers, the implications are practical. As government and philanthropic funding is increasingly channelled through larger, sector-specific commissioning agencies, participation will depend on two core capabilities.

First, organisations must be able to demonstrate impact using agreed metrics. Commissioners need clear evidence that investment is leading to measurable outcomes. This requires the ability to collect consistent data, analyse performance, and report results in ways that align with the commissioner’s framework, not just describe activities delivered.

Second, organisations need to collaborate early on how outcomes are defined and measured. Those who help shape the metrics and reporting standards are better positioned than those who simply respond to them later. Collaboration on measurement creates influence.

This is not simply a technical reporting issue. It is strategic. Commissioning systems are effectively setting the investment rules of the future. Those rules are increasingly built around evidence, measurable impact, and coordinated delivery. Boards and leaders who invest now in shared measurement frameworks and governance structures for impact will be better positioned as commissioning expands across sectors.

The Impact – Mergers & Acquisition in the For-Purpose Sector

We do not have to guess what comes next for New Zealand charities - mergers. In the United Kingdom, a more mature market, charity mergers and consolidation are already rising as organisations adjust to commissioning pressures.

One recent index found 63 mergers involving 131 organisations in a single year (a 31% increase) and the total value of merger deals leapt by 500% to £192 million. This is not about charity leaders wanting to merge. It is about responding to a funding environment that increasingly rewards size, capability, and measurable outcomes.

New Zealand’s system, with nearly one not-for-profit for every 170 people, is dense and competitive. That creates similar pressures for scale and stability.

This isn’t about getting bigger; it’s about being ready. In business, mergers are about market share. In the for-purpose world, they are about impact and resilience. Smart mergers reduce duplication, combine strengths, and create organisations that can deliver at the scale large commissioning contracts require.

But mergers are not automatic. They require governance confidence, clear strategy, and board readiness to evaluate risks and benefits - a different skill set than traditional fundraising oversight.

The Stewardship Test

The environment we are entering also rewards organisations that can prove they are safe hands for other people’s money. That means disciplined financial oversight, auditable decision pathways, conflict management, performance reporting that can stand up to scrutiny, and a leadership culture that treats stewardship as a core part of the mission rather than an administrative burden.

Standing still is not a strategy. Every organisation now faces the same choice:

• Grow delivery capacity

• Specialise deeply in a clear outcome area

• Partner / merge to reach the scale required

Doing nothing will increasingly mean less influence, smaller funding shares, and fewer chances to lead impact work.

The Real Question for the Next Decade

The question is no longer: How do we raise more money? It is:

“How do we make ourselves fit for a commissioning future that rewards scale and proven impact?”

Because in New Zealand, as in the UK, commissioning is a freight train coming round the bend. And the organisations that get ready now will be the ones leading it.

For more information regarding commissioning across the not-for-profit sector, have a chat with David Hammond from Tribe Executive. He is a national expert in KPI development, bespoke remuneration assessment, Māori sector work, board advisory and entire structure reviews.