Smaller charities take the biggest hit during pandemic

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This was published 3 months ago

Smaller charities take the biggest hit during pandemic

By Anna Patty

Smaller Australian charities have been economically damaged the most by the pandemic as the sector prepares for resources to be further stretched from March when the federal government's JobKeeper payments end.

While the full impact of COVID-19 on charities in 2020 will not be clear until they lodge their annual returns later this year, many smaller organisations dependent on fundraising have seen a drop in donations.

Reverend Bill Crews and volunteers of the Exodus Foundation sort through Christmas donations at their Ashfield parish prior to Chrismas Day.

Reverend Bill Crews and volunteers of the Exodus Foundation sort through Christmas donations at their Ashfield parish prior to Chrismas Day. Credit:James Alcock

The JobKeeper subsidy has helped many of Australia's 58,000 charities retain staff but there are fears that when the payment ends in March organisations will be forced to shed personnel.

Krystian Seibert, acting policy and research director at Philanthropy Australia said the available data shows the pandemic has had an "uneven" impact across the sector.

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"Some charities have seen donations drop, but then some charities have also seen them increase or not change much at all," he said.

Mr Seibert, also a fellow at Swinburne University of Technology, said online donation platforms including GiveNow and MyCause, which charities can utilise, had resulted in significant increases in donations.

Annette Young, acting chief executive officer for The Smith Family, said the impact on disadvantaged children during the pandemic were heightened and many supporters had continued to give. Ms Young said some donors gave more, and some less and the organisation picked up new supporters too.

“This year the outlook is still uncertain and we’re conscious that a decline in donations is possible but we’ll keep working hard to support the education of students affected by poverty," she said.

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Neil Venables from The Salvation Army, which had to suspend its Red Shield Appeal annual doorknock in May, said it had seen an increase in donations which had "positioned the organisation well to meet some of the increased needs and costs during these uncertain days".

A Salvation Army Christmas sausage in Sydney in December.

A Salvation Army Christmas sausage in Sydney in December.Credit:Dominic Lorrimer

Gary Johns, the commissioner at the Australian Charities and Not-for-profits Commission said annual returns for charities are not due for months, but anecdotally, the situation was "a very mixed bag" depending on how dependent charities were on donations. He said it was "not all doom and gloom".

"I think there will be a delayed impact," Dr Johns said.

Dr Johns said JobKeeper had helped charities buy time and retain jobs. "Clearly if you are holding up some of your unemployment with JobKeeper and it stops you may then have to make decisions about dipping into reserves or simply not continuing employment of those people," he said.

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Dr Johns said more than half of Australia's charities are small and reliant on donations and bequests and harder hit than larger charities that deliver government services. The larger charities had received a steady flow of government funding as well as JobKeeper payments. He said donations and bequests make up 10 per cent of the $110 billion the sector receives, with the remaining 90 per cent provided by government.

"The ones who are not doing well are those who don't have much government income," he said.

Wesley Mission chief executive officer Stu Cameron said the pandemic had made a 5 per cent dent to its overall picture compared to 2019.

"This result could have been much worse, if not for many of our donors who gave more to help us respond to the enormous surge in requests for emergency relief," Reverend Cameron said.

A spokesman for the Royal Flying Doctor Service (South Eastern Section) said 2020 was a "mixed year for fundraising and donations".

"Some of our fundraising initiatives, such as our tourism operations and community fundraising program, were negatively impacted but this was balanced by our fundraising appeals which exceeded our expectations," he said.

Lisa Cheng from Lifeline Australia said much of its usual fundraising activity had to be cancelled during the pandemic, but an emergency appeal had ensured its centres would remain open as demand for its services continues to surge."

"The community response was encouraging and we have managed to avoid the anticipated drop in funds raised," she said.

"That said, the demand for our service has greatly increased throughout 2020 with the first week of 2021 seeing more calls received than any other week in our 57-year history, so the need for assistance continues to grow."

ACOSS chief executive officer Cassandra Goldie said "there is no question that the community and charity sector was hit hard in 2020".

"Employing over 840,000 full-time equivalent workers and contributing about $128 billion to the economy, many organisations have suffered major disruptions to traditional sources of income including through fundraising, events and training," she said.

"We need to keep JobKeeper at its pre-existing levels until we develop longer term solutions that will secure the sustainability of essential community services."

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