Turning the tide for Australia’s charitable sector towards 2021

By: Sarah Wickham   |   Policy and Research Director, Philanthropy Australia   |   https://www.philanthropy.org.au/about-us/staff/sarah-wickham/

I recently saw a meme that felt pretty spot on considering the challenging year that 2020 has been so far: “I’m not buying a 2021 planner until I see the trailer.”

For the charities sector especially, the current predictions for what next year holds are looking pretty grim – a sequel to 2020 with the continued impact of the pandemic on a sector that employs 1 in 10 Australians, represents 8% of GDP and delivers an extensive range of essential services and community support. All unfolding, of course, against the backdrop of Australia’s worst economic and social crisis since the Great Depression. If it weren’t our reality, it would sound like a pretty solid pitch for a movie.

It will be some time before the COVID-19 health and economic crisis is behind us, with experts and politicians aiming for a COVID-safe environment as our best short-term option. However, to try to turn the tide as we head into 2021 and beyond, we need to act now to incentivise and stimulate more giving to support our charities and the communities they serve.

Australians are among some of the most generous people in the world, especially in times of crisis. However, the financial toll of the pandemic means households are cautious about maintaining their giving and initial predictions suggest we can expect a 20 per cent drop over the next year. At the same time charities are also experiencing a significant decline in volunteering support, as a result of social distancing measures. These couldn’t have come at a worse time for charities, which are working hard to meet the surge in demand for their essential welfare and community services.

The latest sector modelling suggests that even under the revised JobKeeper payments, one in seven charities are at risk of closure by September next year and hundreds of thousands of jobs are on the line. It’s not an overreaction to say that there couldn’t be a more urgent time for more government action.

Since the advent of the pandemic, Philanthropy Australia (PA) has been on the front line, providing resources and support for our members. PA released ‘A Call to Action – Australian Philanthropy’s Response to the COVID-19 Crisis’ and five initial policy recommendations to Government (including no changes to the minimum distribution requirements for ancillary funds and credits for funds that over distribute by at least 4% and decreasing the JobKeeper eligibility threshold to 15% for charities).

Now, as COVID-19 evolves and we find ourselves in the midst one of the greatest economic and social challenges of our country’s history, Philanthropy Australia has launched 13 policy priorities in the lead up to the October federal budget.  

2 actions the Australian Government can implement to address the immediate and ongoing impact of COVID-19 on charities and giving

  • Establishing a specialised NFP Loan Fund, in partnerships with philanthropy
  • Implementing a temporary increased charitable gift deduction

7 initiatives to support giving and charities in a post-COVID Australia

Creating the culture and tools to grow giving:

  • Introducing a Living Legacy Trust structure
  • Encourage legacy giving from superannuation
  • Launching a National Giving Campaign to build Australia’s culture of giving
  • Supporting the Federal Government’s Social Impact Investing Taskforce recommendations

Removing barriers to giving:

  • Fixing Australia’s complex and outdated fundraising laws
  • Cutting red tape to support the vital role of Australia’s Community Foundations
  • Reforming Australia’s Deductible Gift Recipient framework

4 commitments to retain work works

  • Maintaining existing refundable franking credit arrangements
  • Maintaining the existing uncapped tax deduction for donations to deductible gift recipients
  • Preserving an effective and responsive ACNC
  • Protecting advocacy by charities

The government has provided initial meaningful support to Australia’s charitable sector, with JobKeeper payments keeping many charities afloat and steadying sector employment. However more investment will be required to ensure the ominous 2021 predictions can be avoided. That’s why all eyes are on next month’s Federal budget. This budget will tell the public exactly what the government’s plans are and what they will be funding to help get Australia through the recovery process. It is critical that the government brings the charitable sector into its strategy, alongside business and industry, as a fundamental partner in Australia’s rebuilding efforts. 

Philanthropy and charities have unique and valuable characteristics that make them capable of driving positive changes and delivering solutions that will be essential in Australia’s rebuilding efforts. We have already witnessed the critical role played by charities in responding to COVID-19, and the part our sector plays after the pandemic will be no less important.

Many Australians have used the quiet moments this year has offered to reflect on the post-COVID future they want for this country, the changes and new behaviours required for a better, safer and more connected world. To help achieve this prosperous future, charities need to play a prominent role in the rebuilding efforts as collaborator and connector with communities, government and business. When charity leaders work best, their leadership generates innovation and partnerships that propel our country forward with shared purpose. It would be a shame for the government to miss the opportunity to bring Australia’s charitable sector into the national recovery plans.

If you would like to read more details regarding these policies, you can download the full policy document on our Policy Priorities for a Post COVID-19 Australia webpage.   

To show your support for Philanthropy Australia’s policy platform, we have developed a supporter pack including key messages, current research insights and why these policies matter along with a template letter you can send to federal Members of Parliament.

Sep. 16, 2020

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