COVID-19 has greatly affected not-for-profit organizations’ operations in Australia. Most organizations have experienced a revenue decline as well as a drop in volunteerism. Moreover, the pandemic has forced them to reduce their workforce.
1. Revenue Decline
- Australia is home to over 600,000 not-for-profit organizations (NFPs). In the past six months, the sector has experienced numerous challenges as a result of COVID-19.
- One of the challenges is revenue loss. According to RESET 2020 National Support Program and Research Study, 50% of not-for-profit organizations in Australia have reported a loss of revenue. 11% are in need of urgent financial assistance to help them maintain their operations.
- The decreases in income range from 1% to 100% with a standard estimated decline of 53%. The decline is partially attributed to the ongoing economic downturn and government’s response to COVID-19 spread.
- Although most NFPs worked under tight margins and diminished reserves even before COVID-19 pandemic, the pandemic has only aggravated the situation.
2. Reduction in Staff
- COVID-19 pandemic has greatly affected NFPs ability to retain their standard staff numbers. Normally, NFPs range from 100% volunteer staff to huge, multi-state and global organizations with thousands of workers. In Australia, the organizations offer employment to millions of people.
- A report by Our Community showed that 35% of the sampled NFPs have already scaled down their workforce while 8% intended to do so. Other organizations are struggling to retain their employees by reducing working hours rather than terminating their services.
- Others are dependent on JobKeeper to keep going amid the rising demand for their services as a result of the pandemic. When JobKeeper payment sends, many NFPs would be operating at a loss with 8% being at an elevated risk of being non-viable.
3. Drop in Volunteerism
- COVID-19 pandemic has occasioned a decline in volunteer numbers in Australia. Research shows that 74% of NFPs in the country rely on volunteers. However, the pandemic has caused a notable decline in numbers.
- The findings are echoed by another report by the Guardian observing that almost two-thirds of NFPs in Australia reported a decline in volunteer activity.
- With people being mandated to remain at home and reduce contact with other, the number of volunteers is expected to remain low. Consequently, most NFPs’ service delivery will be affected.
- A joint report by Social Venture Australia and Centre for Social Impact predicted that 17% of NFPs in the country would be at risk of shutting down within the coming six months if the revenue decline trend continues.
- According to the report, a 20% revenue loss could lead to over 200,000 job losses as a result of closures and scaling down of operations.