Coronavirus: Cash drought puts 200,000 charity workers at risk of losing jobs

Charities would lose about 200,000 of their 1.3 million jobs if COVID-19 emergency financial supports come to an end.

Community Council for Australia chair Tim Costello: ‘The charities sector is essential to create stronger communities.’ Picture: AAP

Charities would lose about 200,000 of their 1.3 million jobs if COVID-19 emergency financial supports such as JobKeeper come to an end in October.

And about 17 per cent of the ­nation’s 16,000 registered charities would be at high risk of shutting down within six months, a new study reveals.

The report, released on Wednesday by advocacy group Social Ventures Australia and research organisation the Centre for Social Impact, paints a bleak picture of the potential post-COVID future of the charities sector, which employs one in 10 workers and accounts for 8 per cent of the nation’s GDP.

Modelling a 20 per cent revenue cut to the sector, the study found 88 per cent of the nation’s charities would immediately be operating at a loss, and nearly one in five would be at high risk of having to shut down within six months. In that scenario, more than 200,000 jobs would be lost.

To limit the potential damage to the sector, the report makes a number of recommendations ­including the retention of the JobSeeker payment at its current level, smoothing the transition away from the JobKeeper payment in October so it remains available for needy sectors, and­ ­increasing funding for government-contracted services delivered by charities.

SVA chief executive Suzie Riddell said the impact of COVID-19 on the economy meant strong charities were more important than ever, but it was struggling to secure funding in the post-virus environment.

“We should be pump-priming charities to aid the recovery. They are the social glue in our communities. Without thriving charities our productivity and wellbeing is at risk,” she said.

CSI chief executive Kristy Muir said most charities operated within very tight margins.

“While most charities and not-for-profits are creative, agile and efficient, their funding models are often not viable for impact,” Professor Muir said.

“(And) this impending crisis of an ‘October cliff’ (when government payments including JobKeeper and a boosted JobSeeker are due to end) could disrupt the provision of services to some of Australia’s most vulnerable, including those directly affected by the COVID crisis.”

The report notes there are more than 57,000 registered charities in Australia. In 2018 charities employed more than one in 10 employees in Australia — 1.3 million people. More than one in seven people in Australia (3.7 million people) volunteered with charities, which had revenues of some $155bn, which accounted for over 8 per cent of GDP.

“The charities sector is essential to create stronger communities,” chair of Community Council for Australia Tim Costello said. “If the role of charities is diminished, it will heavily impact our communities.”

Australian Council of Social Service chief executive Cassandra Goldie said community sector charities did vital work in areas such as domestic violence and homelessness.

“While the JobKeeper payment has been welcome, the road to recovery will be long and we must ensure those reaching out for the support of community service charities get the help they need to rebuild their lives,” Ms Goldie said.

“The pandemic has increased the need for some services delivered by charities, such as food relief and mental health services. At the same time, the crisis has reduced the revenue and capacity of many organisations, with decreased ­donations and fewer people being able to volunteer.”