Philanthropy Australia unveils its priorities for a post-COVID future
19 August 2020 at 6:08 pm
Sector leaders say there is an important role for private giving in Australia’s COVID-19 recovery
As the nation grapples with the ongoing economic impacts of COVID-19, Australia’s peak philanthropy body has outlined several policy priorities that it believes can spur additional giving and offer greater support to charities in their time of need.
Philanthropy Australia’s (PA) latest policy document sets out two urgent actions the government can take to address the immediate and long-term impact of COVID-19 on charities and giving.
It calls for a temporary increased charitable gift deduction to maintain giving levels (which are projected to decline significantly), and a $1 billion specialised not-for-profit loan fund to deliver a new source of income for charities.
PA CEO Sarah Davies told Pro Bono News while the federal government has contributed greatly to the COVID-19 recovery, there was also an important role for private giving.
She said to achieve this, we need to ensure that giving grows to support the essential work that community organisations are doing.
“We need the right incentives and regulations that encourage the growth of private giving,” Davies said.
“These recommendations are aimed at building up that infrastructure, so private giving can continue to support the community and charitable sector.”
PA’s temporary enhanced charitable gift deduction proposal is for donations made to DGR1 charities, and could range from 120 per cent to 150 per cent of the value of a donation.
The organisation said this should be effective for the remainder of the 2020-21 financial year, with the option to extend it a further year if needed.
It suggested the enhanced rate of deduction should be available up to a donations cap of between $10,000 and $25,000.
Davies said the proposal was aimed “fairly and squarely” at addressing short-term needs.
“This year and next year when we know that revenue from charities has fallen, there’s a big decline in volunteers because of physical distancing, and a big loss in fundraising for many charities,” she said.
“If charities can’t maintain those regular givers during the next couple of years, they are going to have very serious long-term consequences, not just the loss of revenues they’ll experience immediately, but also the cost of building back that donor community.
“So this is about encouraging people to stay connected to the charities that they support and hopefully encouraging increased giving.”
The second urgent proposal, the specialist loan fund, is a longer-term solution.
It would deliver working capital in the form of low-cost loans supported by a Commonwealth guarantee, with philanthropic sector backing.
It was recently revealed that the federal government’s coronavirus loan scheme – which has just been rejigged – only supported 22 charities out of 15,600 loans approved.
Many charities were too large and did not qualify for this scheme, while the maximum loan amount of $250,000 was also insufficient for many organisations.
PA’s proposal would quarantine $1 billion from this government scheme, and work with philanthropists to guarantee appropriately structured loans for charities of up to $50 million.
Davies said one of the things that’s come out of this year was a greater understanding of the structural challenges that the charity sector faced in raising working capital to support their work.
“This not-for-profit loan fund is not just for the now, but is actually a really terrific opportunity to build another supply of working capital for charities into the future,” she said.
“We could actually create a new way of working that supports charities to innovate and to grow through accessing relevant and appropriately structured and defined debt.”
PA’s policy document also outlines several other recommendations, including launching a national giving campaign to build Australia’s culture of giving, fixing Australia’s complex fundraising laws, and cutting red tape for community foundations.
The full document can be seen here.