Alarming new figures show many nonprofits are facing severe revenue shortfalls, while demand for their services surges. Andrew Sadauskas reports.

The COVID-19 revenue crunch is fraying the nonprofit sector.Half of Australia’s nonprofits that participated in a recent survey are reporting a loss of revenue due to the COVID-19 pandemic, with 11% needing urgent financial aid to remain operating.

Additionally, just under half of these charities and nonprofits have seen an increase in demand for their services. As a result, just under a quarter report their staff are working longer hours.

The preliminary findings come from the ongoing RESET 2020 National Support Program and Research Study, which aims to understand the impacts of the pandemic on social-purpose organisations.

The survey is being conducted by The Xfactor Collective, with support from Equity Trustees and the Sector Capacity Building Fund.

While the survey is ongoing, The Xfactor Collective reports it has already been completed by a significant number of nonprofits.

How has COVID-19 affected charity donations?

According to the RESET 2020 program’s preliminary research figures:

  • 50% of the organisations that have responded so far report a loss of revenue, although they can continue operations for now
  • 11% need immediate financial assistance to continue their operations
  • A third of organisations with under $250,000 in annual turnover have three or less months of reserves
  • Just 4% report an increase in their revenues

How has COVID-19 affected demand for charity services?

At the same time as revenue is dropping, demand for social services  is putting strain on many charities:

  • 44% of nonprofits report some or significant increase in demand for their services
  • 21% report that staff are working longer hours to keep up with demand

What support do charities need to overcome the COVID-19 revenue crunch?

Because of the pandemic, nonprofits say they are looking for help with:

  • attracting and retaining donors, sponsors and/or partners
  • keeping the public focus on the issues and needs of the beneficiaries they support

Julia Keady, CEO of The Xfactor Collective, says the research has provided critical insights so far, and submissions remain open for organisations that haven’t yet completed the survey.

“COVID-19 is going to have a long-term impact, so the research will be repeated at intervals over the next 12 months,” Keady says.

“The findings will be shared across the sector, and will help to inform the sector’s future response. The issues will, no doubt, evolve over time.”

Free advice sessions to help charities through the COVID-19 revenue crisis

To help nonprofits through the crisis, The Xfactor Collective is running a series of six free advice sessions over the next three weeks.

The sessions are being run with the support Equity Trustees, and will cover:

  • events in this new world;
  • corporate and community partnerships in uncertain times;
  • getting cut-through in communications and marketing;
  • how to identify and support staff and volunteers who are struggling emotionally
  • sustaining donor and funder relationships; and
  • retaining talent and the various recruitment and staffing challenges that organisations are experiencing.

“The early [survey] insights have shaped the content for the first six free advice sessions that will be running over the next three weeks,” Keady says.

“As a group of professionals across a wide range of disciplines, the members of the Collective wanted to offer practical support for the sector. We know many small organisations can’t normally access this kind of professional advice.

“Some organisations are responding well though, so the live shows will be a mix of case studies and an interactive Q&A session, so people can get the inspiration, advice and support they need.”

Charity and nonprofit organisations can complete the Survey and register for the free advice sessions on this website.

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