In addition to its work addressing specific community’s social and environmental challenges, Lord Mayor’s Charitable Foundation recognises its role in supporting the charitable and philanthropic sectors, as well as inspiring community philanthropy.
The charitable sector is critical to Australia’s wellbeing, especially in tough economic times. In a sense, the charitable sector is Australia’s social and environmental safety net. During the COVID-19 pandemic, the Foundation has thought deeply about the resilience of the charitable sector.
Recent research by Centre for Social Impact UNSW with SVA titled: Taken for granted? Charities’ role in our economic recovery, shows that the demand for services provided by many charities is expected to increase, especially as unemployment grows. The report also highlights the major role of the charitable sector as an employer. Charities employ 1.31 million people. 1 in 10 people in Australia.
Modelling from the report reveals that under the revised JobKeeper payments, 110,000 people employed by charities are still at high risk of becoming unemployed by September 2020, with a further 70,000 by September 2021.
The report also found that JobKeeper will keep many charities viable in the short term but won’t be enough to preserve all charities, with 14 per cent at risk of becoming unviable and 44 per cent making an operating loss by September 2021.
Other recent research RESET 2020 by The Xfactor Collective funded by Equity Trustees includes further insights about the charitable sector:
“Those with lower revenues are left vulnerable to the economic shock brought on by the pandemic. While most charities balance their books every year, more often than not they carry little reserves, largely due to rising costs and the regulatory environment they operate in. Forty five percent (45%) of respondents are carrying operating reserves of six months or less. Many are trying to retain staff, and still have ongoing costs for insurance, rent and other outgoings. As a result, nearly two in 10 respondents are already struggling to deliver services due to revenue loss or need immediate assistance to continue their operations.”
In order to build the resilience of the charitable sector, support will be needed in these areas:
- Digital transformation and capability building
- Business transformation (new or refreshed business models, service redesign, sharing services, mergers, or partnerships)
- Leadership support and development
- Financial management and financial modelling capability.
There is a lot to do to ensure we have a strong charitable sector as respond to and recover from the COVID-19 pandemic. Many people facing economic hardship depend on this as do staff and volunteers.
Under the Generous Melbourne Impact Area, we also fund research to provide a better understanding of community need and support the development of the social enterprise and impact investment sectors (both tools within our Philanthropy Toolbox).
The Foundation supports social enterprise and impact investment development to deliver diversified income sources for charities, increase employment opportunities for vulnerable groups, and to encourage private and institutional investment into ventures with social and environmental purposes.
The Foundation also supports peak bodies within the philanthropic sector where projects align with the Foundation’s strategic direction or which align with an area of interest specified in the Foote Trust Deed of Gift, that is not otherwise supported through the Foundation’s grants program. We are current members and supporters of Australian Environmental Grantmakers Network, Australian Community Philanthropy. We are also active members of Philanthropy Australia and several international philanthropy networks.
Increasing the awareness of community philanthropy and supporting the network of community foundations is also a vital part of the Foundation’s work.