HOUSE OF REPRESENTATIVES, 26 AUGUST 2020
The charity sector has a massive impact on our society and our economy. It is eight per cent of GDP, it has 1.3 million workers—about a tenth of the national workforce—and three million volunteers.
The charities sector is bigger than agriculture or manufacturing or retail, and yet the charity sector is under pressure like never before. Research from the Australian National University's Nicholas Biddle and Matthew Gray, commissioned by Volunteering Australia, found that two-thirds of volunteers were forced to cut back their hours as a result of COVID. A survey by Giving Tuesday found that nearly two-thirds of charities had a drop in volunteer activity and fundraising. Research by wealth management firm JBWere estimates that total donations will fall by seven per cent this year and 12 per cent next year.
Yet the demand for charities has skyrocketed. The Wayside Chapel in Kings Cross reports that it normally gets about 10 requests a week for help and that has increased to 70 requests a week. Demand for Foodbank services went up by 50 per cent in April, while their supply lines shrank by 27 per cent. Cystic Fibrosis Australia reports that, since March, their workload has increased by 79 per cent and their revenue has dropped by a similar percentage. The Salvation Army has seen increased demand, but its Red Shield Appeal has raised just $2.6 million of its $8 million target. Kristy Muir from the Centre of Social Impact says some charities are struggling more and it's likely that some will not recover from COVID. A report from Social Ventures Australia and the Centre of Social Impact estimates that 14 per cent of charities, employing 180,000 people, could be at risk of being unviable by September next year under existing JobKeeper requirements. The Ramsey Foundation reports that the assets of the typical charity has would cover less than three weeks of operations.
What should be done? Philanthropy Australia proposes seven actions: introducing a living legacy trust structure; encouraging legacy giving from superannuation; a national giving campaign; supporting the Social Impact Investing Taskforce recommendations; fixing fundraising, as Senator Catryna Bilyk's report recommends; cutting red tape to support community foundations; and reforming Australia's deductible gift recipients system. Social Ventures Australia recommends retaining JobSeeker at a higher level, ensuring the end of JobKeeper is a ramp and not a cliff, a charities transformation fund, and further research to help the charity sector build back. Some givers are providing additional flexibility. I commend the Snow Foundation for relaxing their restrictions on funding and dipping into their reserve.
COVID-19 is a life or death situation for many people, and for some charities too.
Authorised by Paul Erickson, ALP, Canberra.