Research Series on Australian Charities and Not-for-profits
This latest report – is the fifth edition within the series ‘Partners in Recovery’. The report aims to fill knowledge-gaps regarding the financial health of charities in the aftermath of the COVID-19 crisis.
The report utilises the data submitted by over 48,000 registered charities to the ACNC across the last 5 years 2018-21.
Over a quarter of not-for-profits that reported to the ACNC (27%) categorised their organisation as either health, social services or housing and development. A further 19% listed themselves as education and research.
The report finds that many social service based charities are having to manage a steady flow of continual disruptions to basic human services, a much smaller volunteer workforce, larger demand for their services and increasing running costs due to inflation and global issues.
Summary of findings within the report
This 5th chapter in the report series highlights that although the Australian Government delivered a decent level of support for charities, businesses and employees throughout 2021, and with the additional support most charities were able to keep the doors open. But the data contrarily highlights that 4 out of 5 (80%) of charities struggled throughout the pandemic to keep up with the increase in demand.
As we head out of the pandemic, revitalise our communities, and rebuild the industries that were hit hardest, it is clear that in order to support the most vulnerable members of our community we are going to need to better support and equip our social services organisations.
Assistant Minister for Competition, Charities and Treasury Andrew Leigh said the latest instalment in the SVA and CSI Partners in Recovery research series will help government understand how charities have been affected by service disruption, falling income, rising demand and higher operating costs.
“Australia’s remarkable charities do vital work in our communities – helping the vulnerable, advocating on environmental issues, encouraging the arts, and much more,” he said.
“But recent years have been tough. The Partners in Recovery reports help us understand the challenges and opportunities, and provide a valuable roadmap for building a reconnected Australia.”
Size of the sector
Over 10% of workers in Australia (1.4 million people) are employed in the social services, not-for-profit and charity sectors, which is more than the entire mining and infrastructure industry, and not-for-profits contribute 10% to the Aus GDP, which is equal to the annual contribution delivered from the retail sector.
Of course, jobs and the GDP are not the most important part of what our social-impact charities do, but it should be a strong incentive for government and private industry decision makers to act before there are too many gaps in our delivery of services to support those people who are most in need.
Digital transformation
As we moved through the pandemic, the demand increased dramatically for not-for-profits and social service organisations to offer online support, virtual appointments, digital forms and responsive website communications.
The report highlighted that 69% of Australian charities are either mid-migration or planning the migration to cloud based infrastructure and fully digitalising their operations and their service offering.
This collective mass switch from our purpose-driven organisations to build more robust digital experiences has highlighted the digital-divide between private companies and charitable organisations, with many experiencing consistent cyber attacks, technical issues, website compatibility problems, data security breaches and the lack of qualified technical support to help mitigate these issues and develop best practice digital infrastructure.
The report details that the greatest challenge for organisations to improve their tech stacks and digital offering was the lack of adequate, or in some cases, any funding to support digital transformation. 37% of respondents indicate that access to affordable, skilled, technical advice and resources remain the top challenges for charities and social purpose organisations.
The public are accustomed to using exceptional tools and applications like their online banking, health insurance and streaming media services. These have all been built to be device-agnostic, responsive and sleek interfaces. They all utilise the latest levels of security, particularly around their payment gateways. And the companies that represent these industries have access to budgets and resources that are in most cases well out of reach for our charities and not-for-profit organisations.
This is just one example of where the data has shown us a clear gap in our social purpose sector that needs the support of the Australian government, but also from the private sector, who collectively together have the resources, funds and expertise to elevate our purpose driven organisations to follow industry best practice standards for delivering inclusive, fluid and secure customer experiences for their participants and communities.
Summary and links
This report, and the preceding 4 reports in this series, are directly providing NFPs, social-purpose organisations, government departments and private sector companies with a realistic lens into what we need to do collectively to keep social services delivering and thriving, so that ripple effect reaches our most vulnerable members of communities across Australia.
You can view the latest report (#5) on this link here. You can also review its preceding four sibling reports via the links and summaries below.
1. Will Australian charities be COVID-19 casualties or partners in recovery? A financial health check – Published June 2020
This report models how ACNC-registered charities are likely to be affected by the COVID-19 crisis and sets out the extent of support needed to ensure a thriving and financially viable charities sector.
2. Partners in recovery: Why charities need tailored support – Published July 2020
This policy snapshot explores the different financial, legal and operational constraints to commercial businesses that charities face, and shows that charities need tailored support from government that recognises their unique situation if we are to preserve jobs and services.
3. Taken for granted? Charities’ role in economic recover Published August 2020
This third report updates the modelling presented in the June 2020 report to explore the implications of the revised JobKeeper wage subsidy arrangements announced by the Commonwealth Government in July 2020. It also presents new analysis on the economic contribution of the charity sector.
4. Vital support: Building resilient charities to support Australia’s wellbeing
Published May 2021
The fourth report in the series reviews the state of the charity sector, more than a year on from the onset of the COVID-19 crisis, and investigates what support charities need from government and others to be effective partners in Australia’s recovery. 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.
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