The Not-For-Profit (NFP) sector in Australia is diverse, extensive and services many different needs in our community.

Not-For-Profits and the challenges of change

According to an ACNC review in 2018¹, these organisations had combined annual revenues of $143 billion and employed more than 1.3 million people and up to 6 million volunteers. There are around 257,000 NFP organisations operating in Australia, with 55,000 of these being registered charities. This does not account for the many small, unincorporated bodies providing a range of community services in areas such as sports and education. Reports indicate that there are approximately 400,000 of these smaller groups in Australia. NFPs operate in sectors ranging from education, housing, health, disability and social services including legal and finance and their business models are as varied as the sectors covered.

Even before the Covid-19 pandemic sent us all into lockdown, the NFP sector was experiencing an increase in demand for services and a decrease in turnover. Donations were down by as much as 20% for some organisations as donors focused on supporting specific causes like the December/January bushfires. The ongoing issue of donor fatigue has further affected turnover. A recent review commissioned by Hands Across Canberra found that 97% of local NFPs had been affected by the double impact of the bushfires and the pandemic².

As the Covid-19 lockdown started affecting jobs and people’s livelihoods the sector began experiencing increases in demand for services of around 15%, but their income isn’t keeping up with demand. People are donating less, government contracts are changing or winding down and operating costs continue to increase. The Federal Government recently stepped in and provided some broad-based funding support and a number of reviews have outlined a number of possible financial strategies for the sector. But how is the sector itself responding to the increased demand for support from many in our community who have never needed support in the past?

Strategic questions to consider

With half of Australia’s NFP sector preparing for a substantial drop in turnover there are a number of key areas where should focus on, including

• Strong leadership and good governance as they navigate their way through unavoidable change.
• Understanding what uncommitted funds are available to get through the short term and whether the use of these funds should be reviewed.
• Reviewing expenditure and reducing costs where possible.
• Identifying other potential sources of funding including new government or philanthropic sources of support.
• Reviewing contractual commitments and whether these need to be reviewed until the situation changes.
• Partnering with complementary organisations to help spread costs and service requirements.
• Investigating whether core services can continue to be delivered in the current circumstances or is there an alternative approach.

The need to innovate

Innovation in service delivery has been a focus for all businesses and organisations over the past 6 months. The diversity of services provided by the NFP sector makes alternative service delivery models even more challenging as some services need to be delivered face-to-face to have the necessary impact, particularly in the areas of mental health and some hands-on disability support services.

However, many NFPs are exploring innovative approaches to service delivery, including

• Virtual consultations and therapy sessions.
• Face-to-face meetings done in unique ways like while walking to incorporate exercise and social distance.
• Online training and learning to teach participants new skills, some of which may help with new opportunities post-pandemic.
• Virtual meetings and peer group chats to share experiences.
• Special Interest groups meeting virtually to share experiences and interests to help address issues of social isolation.
• Virtual exercise and rehabilitation sessions to help with rehabilitation or address ongoing mobility issues.
• Virtual playgroups to help children deal with isolation and parents deal with the stress of working and caring at home.
• Community building directories identifying services that may be of use to the broader community.

Planning for recovery

Recovery for the NFP sector will not happen quickly, given the anticipated economic challenges to come over the next few years. But the demand for services is likely to continue to increase as more and more first time users enter the system seeking support. The NFP sector has always focused on inclusiveness and now is an opportunity to refine the way services are costed and delivered – #CanberraBusinessUnusal may provide an opportunity for long-term sustainable change.

¹ https://treasury.gov.au/consultation/c2017-t246103
² https://hercanberra.com.au/life/conversation/research-shows-97-of-canberra-charities-impacted-by-covid/

Lighthouse Business Innovation Centre offers a free virtual consultation for NFP organisations looking to innovate to address some of the challenges facing the sector. To book contact This email address is being protected from spambots. You need JavaScript enabled to view it..