Will Australian charities be COVID-19 casualties or partners in recovery? A financial health check
Will Australian charities be COVID-19 casualties or partners in recovery? A financial health check is a report published in June 2020 by Social Ventures Australia (SVA) and the Centre for Social Impact (CSI) that models the potential impact of COVID-19 on the financial health of Australia’s 16,000 registered charities who employ people, to better understand the effects and identify systemic solutions.
This new modelling has found that without transitional support more than 200,000 jobs could be lost among Australian charities as support like JobKeeper, and lease and loan deferrals come to an end in October.
There has been great concern about the future of the sector, and the people it supports, given the economic, health and social crises currently unfolding. It will be sometime yet before there is sufficient data to be able determine its full impact. However, decisions made now will strongly affect whether charities are COVID-19 casualties or partners in recovery, and those decisions need to be based on the best available information. SVA and CSI undertook this work to support the discussion as the sector seeks to transform in response to COVID-19.
Charities deliver vital services and provide wide-spread benefits from their contributions to all aspects of society, including education, health care, sports and recreation, aged care, religion, arts and culture, animal protection, and environmental protection. These organisations are used to operating efficiently with minimal resources but have little in reserve to transform in the face of a crisis of this scale. The report identifies that this impending ‘October cliff’ could disrupt the provision of services to some of Australia’s most vulnerable people, including those directly affected by the COVID-19 crisis.
This report calls for governments to ensure the resilience and viability of the charity sector through a range of supports, including:
- Gradual transition of JobKeeper and other supports to create and ‘ramp’ not a ‘cliff’ in October
- One-off Charities Transformation Fund to help organisations transition to the ‘new normal’ including operating online, restructuring etc
- Maintain funding for government contracted services delivered by charities to reflect the true cost of delivering services
- Retain JobSeeker at higher level to mitigate the increase in service demand while also stimulating the broader economy
- Simplify fundraising and philanthropy with nationally consistent fundraising laws
- Support research to better understand how to build back the charities sector
‘We must act on these dire forecasts to ensure communities, people and governments continue to receive life-changing support and services. Charities are the social glue in our communities. Without thriving charities, our productivity and wellbeing is at risk.’ – Suzie Riddell, SVA CEO