*
*
*

PKF Australia

Accountants and Business Advisers

Our Blogs

NFP Update – how to support those who support us during a crisis

Like most industries, the not-for-profit (NFP) sector is feeling the devastating effect of the COVID-19 pandemic. In a perfect world, the importance of these organisations is paramount. Community groups and people in need turn to them for financial support, stability, friendship and quite simply, their help. NFPs have always been there as organisations with a profit for purpose mantra. What we have seen over the past few months, however, is that the impact of COVID-19 has not discriminated. They too, must deal with changing the way they do things to survive in the current climate. And let’s not overlook the fact that NFPs coping with the pandemic impact is on top of their already stretched resources from dealing with their day-to-day.

One of the saddest things about this scenario is that now, more than ever, these amazing charities are needed for their support and services. While there has been great observation on the impacts on health, businesses and the economy, it is essential to consider the COVID-19 impact on Australian charities and the millions of people who rely on them and their services.

Financial hardship

The sector is struggling under the weight of an extended period of high demand. As charities emerge from a challenging six months of bushfire, drought and floods from which resources were exhausted, they are confronted with COVID-19 and the effect this has on their fundraising efforts.

Charities often operate on a shoestring budget at the best of times and many rely solely on the generosity of the community. Unfortunately, what we have seen is that as a result of social distancing measures and other restrictions, funds and fundraising have simply evaporated. Donation tins sit in empty bars and restaurants, those in shopping centres are untouched and major fundraising events have been cancelled. As a result, charities are having to think outside of the square to reinstate their depleting cash pool.

Organisations are turning to online initiatives which have genuinely been creative and inspirational. We are starting to see the emergence of a new concept - an increase in digital fundraising through virtual events. Boards and staff are busy working at being more creative and fleshing out new ideas while still meeting the needs of their communities with limited resources. One digital campaign currently gathering momentum is The Cancer Council’s Australia’s Biggest Morning Tea, whereby volunteers will host virtual morning teas instead of the traditional way. This is also a fantastic way for the charity’s volunteers to use their own networks to expand their reach.

Charities are leaning on their established relationships too. In good times, we hear frequently that donors have at one point, or another suffered from ‘event fatigue’ or had exhausted their donation ‘budget line’. With social distancing and the lack of events, it may be an opportune time for charites to approach their supporters directly for assistance – financial or otherwise. As an example, where major fundraising events are no longer being held, charites may well run a digital campaign to encourage donating the value of what the ticket would have cost if the event had been held. A tax-deductible donation to help the charity in such difficult times and usually one that is close to one’s heart.

Volunteer issues

While cashflows and the balance sheet is causing distress, NFPs have also seen a decline in a key resource – their people. A charity cannot put a value on their volunteers and yet they are their biggest asset. Volunteer numbers have decreased due to mandatory social distancing measures introduced by the Federal Government. Charities, therefore, find they are struggling to provide vital services to their community at a time when they are needed most.

Adapting volunteering programs to help minimise or remove face-to-face contact to reduce the risk of COVID-19 is paramount. An adjustment in program delivery may be as simple as meetings replaced with telephone or video calls. If it needs to be face-to-face, limit these meetings to no more than 15 minutes. Some programs may be able to be delivered from home if able to move to an on-line platform. This, however, does not assist those dedicated volunteers who find themselves in high risk categories, ie older people. Unfortunately, they must step away until it is safe to recommence. 

Federal Government support

The NFP sector has not been left behind in the Federal Government’s Stimulus announcements over the past few weeks. NFPs with a turnover of up to $50 million and have payments for salaries and wages are able to receive a tax-free Cash Flow Boost of up to $100,000, to help meet PAYG Withholding obligations. The minimum amount of assistance is $20,000 regardless of what the withholding amounts are. In addition, registered charities with a turnover of less than $1 billion that have experienced an estimated reduction in turnover of 15% when compared to the previous year, excluding government revenue, are able to register for the JobKeeper Allowance. The potential for NFPs to receive a fortnight wage subsidy of $1,500 per employee will undoubtedly be a welcome relief to help support the sector. The focus here is no different to small and medium sized businesses – keep employees connected to the organisations and allow them to continue providing support where needed.

Also, the The Australian Charities and Not-for-profits Commission (ACNC)’s Commissioner, The Hon Dr Gary Johns has worked quickly to assist with lodgment extensions if an ACNC registered charity. Approval has been given to defer compliance deadlines for 2019 Annual Information Statements (AIS) with due dates between 12 March 2020 and 30 August 2020 to now lodge by 31 August 2020. This latest extension also includes bushfire-affected charities that had previously been granted an AIS submission extension to May.

Now more than ever, resources are scarce. Take advantage of the assistance the Government has offered. Have conversations with your landlord if needed and as appropriate. It is important to keep open lines of communication with staff, volunteers, sponsors, supporters and grant makers. It is important to be creative and think outside the square. It is important to engage and stay connected to ensure the delivery of programs to those most in need. 

The NFP sector and social enterprises provide an essential lifeline to help people get through this crisis and will be a necessary part of the recovery efforts. If we take a moment to reflect on what has happened during this pandemic, one would conclude that the only constant has been change. How we adapt to this constant change will see the sector get through this - better, stronger and well supported.


Comments

Get in touch

For more information on how our services can help your business get in touch.

* *
*