Shifting Sands: The Institutional Embeddedness of the Sydney Nonprofit Sector and its Relation to the State, Market, and Civil Society

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.