Are Australian Charities Winning the battle for Funds?

In response to the economic climate, 85 per cent of Australian Not for Profit organisations (NFPs) are changing their focus from cost cutting to generating revenue growth over the next twelve months. The second survey by PricewaterhouseCoopers (PwC), the Centre for Social Impact (CSI) and the Fundraising Institute Australia (FIA), “Managing for Recovery,” reveals that in the face of the worldwide financial crisis, Australian charities generally expect a positive year ahead.

CSI spokesperson and report co-author Dr Peter Shergold says the Australian NFP sector has been through a tough period but has not done as badly as anticipated six months ago.

Shergold says stable support from government and less severe declines from other sources such as corporates has helped lessen the impact.

He says in the six months since the last survey, more than half of the respondents experienced the pain of declining revenue, but now only a quarter (28 per cent) are expecting further declines going forward.

He says while these figures are still not good, they are considerably better than was previously expected and an increasing spirit of cautious optimism now exists in the sector.

Shergold says the economic upturn being seen in Australia is being mirrored in the incomes of the NFP sector.

As well he says Government funding has been very important in providing some stability of revenue to the sector over the last 6 months but fundraising income is bouncing back reasonably strongly and is expected to continue to do so.

In particular corporate funding for the sector fell much less steeply than many anticipated, is now recovering and is expected to continue to do so.

The report found that the sentiment of NFPs towards government is a positive one with only 8 per cent characterising their relationship with government as poor.

Peter Shergold says looking forward there is a clear difference in expectation between small and large NFPs with the latter being much more confident about accessing increasing government income into the future.

Survey co-author and PricewaterhouseCoopers partner Rick Millen says last year’s survey showed 64 per cent of NFPs anticipated a drop in income from corporates.

But corporates have continued to support the sector more strongly than anticipated 6 months ago, and he says the sector is seeing much more optimism with 82 per cent expecting corporate fundraising will remain flat or begin to grow again.

According to the survey, the outlook for all types of fundraising income has improved significantly and is expected to continue to do so. NFPs are now looking to leverage this trend by applying more resources to increasing public awareness and fundraising activities.

Fundraising Institute Australia CEO Chris McMillan says the survey clearly shows how swift action by the NFP sector in the first half of 2009 in putting sustainable business strategies in place ensured the sector successfully weathered the financial storm.

Larger organisations have fared better than their smaller counterparts in the last 6 months, with two in five (39 per cent) of large respondents experiencing an increase in income compared to a quarter (25 per cent) of small organisations. This
trend is expected to continue across all sources of funding.

Peter Shergold emphasised that the second survey provides an opportunity for the NFP sector to see how they have fared since the initial impact of the economic downturn and to get a snapshot on what their future outlook is likely to be for the next 12 months.