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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.

4. Predictions

  • 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.
TDM

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