Charities still under strain two years on from the pandemic

The pandemic has only exacerbated existing funding issues for charities, new research shows 

Despite an increase in optimism about the broader Australian economic outlook, many community service providers are still struggling to keep financially afloat and meet increased service demand. 

The Centre for Social Impact’s (CSI) latest Pulse of the For-Purpose Sector survey revealed that significant challenges remain for the social change sector, with nearly 80 per cent of service providers reporting challenges to meet requests for support. 

This latest report (wave two) is part of a research series launched in 2020 to measure the attitudes and operating conditions of the for-purpose sector to understand the long-term impact of events such as the pandemic and Black Summer bushfires. 

The first piece of research (wave one) released at the end of 2020, found that despite government assistance such as JobKeeper, the for-purpose sector reported being financially stretched and struggling to meet demand, with 74 per cent of organisations reporting the operating environment was worse than the previous year. 

This year nearly half (43 per cent) of these organisations felt the operating conditions had worsened yet again between the end of 2020 and the middle of 2021. 

But the report noted that there was less concern about being able to continue providing services in the 2021 economy (from 53 per cent of organisations in wave one to 13 per cent in wave two). 

Australia’s economic future is on the up… unless you’re in the for-purpose sector  

While 25 per cent of respondents believe that Australia’s economy has improved in the past six months, uncertainties in revenue, combined with new and increased demands for how organisations operate in a pandemic mean that the same economic optimism is not being felt across the for-purpose sector. 

Dr Megan Weier, senior research fellow and one of the report authors, said that the sector was already overburdened long before COVID-19 and the bushfires struck, indicating a broader systemic issue within the sector. 

“Organisations across the for-purpose sector are finding that there is a huge demand for their services, but very limited capacity to adequately handle it,” Weier said. 

“However, these issues existed before 2020 as a result of the prohibitive nature of short-cycle funding – the pandemic has only exacerbated the situation.” 

She said that the pandemic had forced organisations to respond reactively, instead of being able to plan ahead.  

“This means that they are currently very operations-focused, which raises concerns about how our charities will fare in the future,” she said. 

See a full copy of the report here.