Supporting not for profits during the COVID-19 pandemic
16 April 2020 at 7:52 am
Andrew Cairns, CEO of Community Sector Banking, looks at the variety of measures that have been announced to support not-for-profit organisations.
Saying that these are challenging times would be an understatement. The effects of COVID-19 have been felt by everyone across the globe.
In a few short weeks we have seen businesses close, industries collapse, hundreds of thousands of Australians lose their jobs and social distancing create further isolation for those individuals who may have already felt isolated.
Not for profits haven’t been immune to these challenges. While our communities continue to feel the effects of COVID-19, the not-for-profit sector has been working tirelessly to support those impacted alongside those who may have required support before the pandemic. They have faced challenges including how to provide support while adhering to social distancing measures, sourcing volunteers when people fear contracting COVID-19 and how to manage their finances when less donations are being made as more people are either laid off work or tightening their purse strings.
With economists warning that the unemployment rate could reach 12 per cent by mid-2020 and that this could have flow on effects for essential services, it’s clear that there will be greater need for not for profits well after the pandemic passes.
Over the past few weeks, the federal government has announced a variety of measures to support not-for-profit organisations. Tax-free payments of up to $100,000 have been announced as part of the government’s stimulus measures. Expected to benefit around 690,000 businesses, 7.8 million employees and 30,000 not-for-profit organisations that have an aggregated annual turnover of up to $50 million, the payments will provide many the assistance they need to continue operating and retain staff.
The announcement of the Job Keeper payment is a welcomed relief. Not for profits impacted by COVID-19 will receive a fortnight wage subsidy of $1,500 per employee as part of a federal government bid to prevent millions of people from losing their jobs to the coronavirus pandemic. This assistance will be able to ensure not for profits across the country can remain open and supporting disadvantaged Australians.
In addition to these stimulus measures, support has also been announced to help organisations operating in the mental health and domestic abuse sectors. A $1.1 billion package from the federal government includes a $74 million boost to mental health services and a $150 million increase to domestic abuse support. A further $100 million has also been allocated to charities and community organisations who provide relief services.
State governments are also providing support to the not-for-profit sector with payroll tax relief announced in each jurisdiction.
The initiatives implemented by the federal government are a great step in the right direction in supporting not for profits and the communities in which they operate. Given the scale of COVID-19’s impact on our lives, it’s no surprise that other parts of the community have pulled together in support of people who may be doing it tough. This includes the banking sector.
The Australian Banking Association (ABA), in agreement with Australian banks, has developed a variety of financial assistance measures to support not-for-profit organisations. These include:
- Bank Care Package – the ABA has announced a relief package that includes a deferral of principal and interest repayments for all term loans and retail loans for six months for not for profits with less than $10 million in total debt owed to credit providers.
- Coronavirus Small and Medium Enterprise (SME) Guarantee Scheme – In partnership with the federal government, the guarantee scheme is designed to provide working capital support to small and medium not for profits with a turnover of less than $50 million to get through the impact of coronavirus. The federal government will guarantee 50 per cent of new unsecured loans issued by eligible lenders up to the value of $250,000.
Aside from this support, individual banks have also rallied behind Australians announcing financial assistance packages that can provide both relief and support. For example, Bendigo Bank has announced support for both customers and community by offering the following:
- Deferred principal and interest repayments or term extensions.
- Fees waived to restructure or consolidate loans.
- Other fees waived or deferred.
- Waive merchant terminal rental fee for three months.
- No interest rate reduction for early withdrawals on term deposit.
COVID-19 has had an impact on everyone across the globe. It’s changed how we live, how we work and even how we communicate. We need to adapt to this new life. Work in different ways, live life differently and provide support to our family and friends in new ways.
As our lives shift, we also need to remember those who may be less fortunate or are struggling during this difficult time. Social issues are the responsibility of everyone to solve, not just government. It’s times like this that it’s important we do our bit to contribute to a stronger civil society and support each other through this crisis.
If anything, COVID-19 has shown us that we are one community who, when called upon, can do great things. We have a history of rallying together when times are tough and ensuring we all come out of these situations as a collective. I’m sure this hurdle we currently face will be no different to any other we have faced before.
About the author: Andrew Cairns is the CEO of Community Sector Banking, Australia’s banking specialists for not-for-profit organisations.