Government policies related to economic recovery from the coronavirus pandemic will need to be adapted to support Australia’s charities, according to a new report, The Mandarin says.
The report launched by Social Ventures Australia and the Centre for Social Impact noted that Australia’s 54,000 charities employ 1.3 million people, and contribute more than 8% of Australia’s GDP — the equivalent of the entire construction industry, and more than the manufacturing industry.
The report argued that charities would be particularly vulnerable to the economic impacts of the coronavirus pandemic due to three factors: they were already in a “precarious” financial position before the pandemic; their revenues don’t recover from downturns in the same way that business revenues do; and they can’t easily access the resources needed to “rebuild and transition to a new normal”.
“For each of these reasons, charities will need tailored support to survive and thrive in the coming years,” the report said.
Social Ventures Australia and the Centre for Social Impact noted that their past research has shown a 20% drop in income would lead to one in six charities exhausting their liquid reserves within six months.
“If they are forced to close, or to shed jobs at a scale to match the income drop, we could see more than 200,000 jobs lost,” they said.
“Based on data available so far, we believe that it is reasonable to assume that on average charities could see a 20% drop in their revenue for the duration of the crisis. This will vary from charity to charity, but gives an estimate of the scale of the challenge that charities are facing.”
A range of factors has left charities vulnerable, the report said, including that they rely on governments for a large proportion of their revenue, and because they may continue to deliver services to those in need even when they are not funded to do so.
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Australian charities need ‘tailored’ government support to survive, report says (The Mandarin)
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Will Australian charities be COVID-19 casualties or partners in recovery? A financial health check (Social Ventures Australia)
