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Vital support: building resilient charities to support Australia’s wellbeing - SVA and CSI report review
“Unlike commercial businesses, an increase in demand does not necessarily lead to an increase in revenue to meet that demand. Charity boards and staff will want to ‘lean in’ to meet increased demand, but they are left trying to do more with less, and will be trying to do that for some time.
Experience shows that unemployment takes much longer to fall in recovery than it took to rise during a recession, so we may see higher than usual rates of joblessness for many years. Charities will face increased demand to support people over that time, at the same time that their revenues remain low.”
In May 2021, Social Ventures Australia (SVA) and the Centre for Social Impact (CSI) released their fourth report in their Partners in Recovery series.
The series looks at how the not for profit sector has been affected since the onset of COVID-19.
We have previously reviewed other reports from this series including ‘Charities’ role in economic recovery’ and ‘Charity financial health check’. But today we take a look at some of the key points within the latest report titled ‘Vital support: building resilient charities to support Australia’s wellbeing’.
Overview of the report
The timing of the report falls more than a year from the start of the global health crisis but before Australia’s latest set of lockdowns, and it analyses the state of the NFP sector at that time. It also outlines the type of support the sector needs from governments and other funders in order to be an effective partner in Australia’s recovery.
“The research found that charities faced significant disruptions to their service delivery, finances and workforce. New analysis has found that more than half of charities faced some form of temporary closure, and more than 80% made some shift towards at least partial online service delivery.
There is a clear case for government support for the resilience and productivity of the charity sector. The report presents six recommendations for action, including a Resilient Charities Fund that would support charities to develop more impactful and efficient ways to operate in a ‘with-Covid’ and ‘post-Covid’ environment.”
Charities' role during crisis
There’s no doubt that not for profit organisations provided critical services during the peak crisis phase of the pandemic. In many communities around the country, they offered assistance to people impacted by the virus as well as those isolated during lockdowns and mandated health restrictions.
The support they provided included much needed resources for vulnerable communities, emergency relief for individuals unable to access government support and they became a vital social connection for many people during the height of socially distant interactions. If it wasn’t for our vibrant not for profit sector, many more people would have fallen through the cracks.
While some groups within our society are recovering quickly, there are others who were already susceptible before the pandemic and they risk being left even further behind. The report recognises that, “while the recovery work has barely begun, many charities will enter this next phase in a weaker and more vulnerable position.”
Stimulus was only a temporary fix
The report highlights the fact that while the Federal Government’s financial stimulus packages, such as JobKeeper and other initiatives, helped many NFP organisations through the initial period of the pandemic, more than 40% of the eligible charities believe that the “stimulus represented a temporary fix only.”
As JobKeeper ended, some organisations faced the challenge of either lowering their headcount or reducing their operations. While economic recovery has been faster than expected, there are still financial challenges within the sector.
Productivity and wellbeing of Australia
The future productivity and wellbeing of Australia relies on a healthy, thriving not for profit sector. NFPs provide essential aid that hundreds of thousands of people rely on, delivering services on behalf of Commonwealth and State Governments – everything from early childhood learning to disability services, drug and alcohol support to protective agencies. Our entire society benefits from their contribution and it is imperative that they remain viable.
“As a community, we are especially reliant on charities during a crisis and to support a recovery, whether confronted by bushfires or financial turmoil.
They are the social glue in our communities, and without them Australia’s quality of life would be poorer on almost every dimension.
But if we want a strong charity sector, we must provide them with appropriate support that recognises their unique needs and challenges.”
Six actions for governments
SVA and CSI’s report clearly highlights the obvious need for not for profit organisations to continue their work within the Australian social framework. Given the clear economic and social benefits derived from charities, “targeted investment in the resilience of the sector is a win-win.”
They identified six actions for governments and others that would support NFP resilience:
- Continue to provide targeted support to charities facing long-run effects of the pandemic, including ensuring that business support is structured so charities can benefit on an equal footing.
- Appropriately fund government contracted services delivered by charities.
- Make fundraising and philanthropy simpler, to encourage increased giving.
- Establish a Resilient Charities Fund to enable charities to invest in capability building and organisational transformation.
- Support further research to better understand how to build back the charities sector so that they are funded for impact.
- Meaningfully increase the rate of JobSeeker payment to reduce poverty and financial stress.
We know that the coming months will continue to be a challenging time for the not for profit sector. Here at Accounting For Good, we are committed to supporting our clients as they face making difficult decisions and look to implement new processes or efficient solutions. Please contact us if you have any questions or concerns. We are here to help.
