New research reveals continued strain for charities and social services after a “profoundly hard year”

Centre for Social Impact

The Centre for Social Impact have today released the report from Wave 2 of their national Pulse of the For-Purpose Sector & Building Back Better survey, revealing significant challenges for the sector as nearly 80% of service providers report struggling to meet requests for support.

Launched in May of 2020, the Pulse initiative is an Australian first in measuring the attitudes and operating conditions of the for-purpose sector, which includes charities, not-for-profits, philanthropy, social enterprises, and for-purpose businesses, and was prompted by the need to understand the long-term impact of recent events in Australia.

Wave 1 investigated the challenges faced in 2020, including the bushfire crisis and COVID-19, and identified that despite government assistance such as JobKeeper, the for-purpose sector reported being financially stretched and struggling to meet demand.

Wave 2 found that operating conditions continue to be a significant source of strain across the sector this year. In 2020, 74% of organisations reported that the operating environment for the not-for-profit sector had worsened over the preceding year. In 2021, just under half (43%) of organisations that work in community or social services felt the operating conditions had worsened yet again over the last six months (between December 2020 and July 2021).

In addition, service demand continues to outpace provision capability – across Wave 1 and 2, the Pulse survey found that approximately 80% of service providers were receiving requests for support they could not meet, with 15% experiencing a large or very large number of unmet services for their clients or communities.

Further, almost 3 in 4 (74%) of responding organisations reported being financially strained or stressed during COVID-19, with organisations reporting significant changes to volunteering. Close to a third of organisations who engage volunteers (31%) indicated they had fewer volunteers than six months prior. Only half of these organisations’ volunteer programs were fully operational at the time of the Wave 2 survey.

Findings indicate that perceptions of the not-for-profit sector’s operating environment remain strained despite an increase in optimism about the broader Australian economic outlook, suggesting that organisations are not expecting broad economic recovery to decrease burden without broad sector reforms to funding.

Dr Megan Weier, Senior Research Fellow and one of the report authors, has explained 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. However, these issues existed before 2020 as a result of the prohibitive nature of short-cycle funding – the pandemic has only exacerbated the situation,” Dr Weier said.

“Due to the immense shocks of COVID-19, organisations have been required to respond reactively rather than 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.”

CSI’s National Research Director, Professor Gemma Carey, emphasises that maintaining visibility around the state of the for-purpose sector is critical to ensure its sustainability.

“The sector needs evidence and knowledge in order to recover from the challenges of the last few years. By equipping charities, community-based organisations, and social enterprises with these resources, we can assist them in moving forward.

“Not only are such surveys vital for shedding light on the many challenges and impacts as an outcome of COVID-19, but they can help us in working towards a sustainable future for the sector,” Professor Carey said.

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