#askXFACTOR    #strongertogether     logo reset2020 white
#askXFACTOR    #strongertogether     logo reset2020 white

EMBARGOED FOR RELEASE 10.08.20, 6am

The continuation of the critical contribution charities and not-for-profits make to the economy and social fabric of our country is at risk due to the impacts of COVID-19, with organisations across the sector facing declining revenues and a consequent inability to provide their usual services. Impacts on mental health and well-being impacts are also emerging among staff and volunteers.

These are among the key findings from the RESET 2020 National Impact+Need Research Study released today, which generally validates modelling developed at the start of the pandemic. However, this survey provides real insights into the extent of the impact of COVID-19 on the social sector, from large charities to small grassroots organisations.

The research was undertaken by The Xfactor Collective, with the support of Equity Trustees Sector Capacity Building Fund. The survey, conducted in April and early May, sought to understand the impacts of COVID-19 on the social purpose sector, particularly change-makers and others whose primary purpose is to provide vital services to their communities of interest. It establishes a baseline against which future impacts can be measured, and importantly, highlights areas where the sector needs support now, if it is to continue to undertake its critical work.

Financial impacts are significant

The sudden on-set of COVID-19 has exposed the vulnerability of the sector as a whole. The survey found that nearly two thirds (64%) of respondents have lost revenue since March 2020, which is especially concerning for those whose revenues are less than $250,000 a year – about half of the respondents to this study.

Organisations with decreased revenues are especially vulnerable to the economic shock brought on by the pandemic, as income decline is not offset by a fall in operating costs. Organisations are working really hard to retain staff, meet ongoing operating costs like insurance, rent and other outgoings, as well as keep services going. But 45% of respondents reported operating reserves of six months or less. Worryingly, 18% reported the impact to their revenue is so severe that they are either struggling to deliver their usual services, or need immediate financial support to continue.

This is particularly concerning when more than a third of organisations (35%) reported an increase in demand for their programs and services. Only 18% of responding organisations have experienced no change to demand. Small organisations (those with revenues of <$250,000) are more likely to have seen a decrease in demand (45%). Conversely, those with turnover of $5-$50 million are experiencing a significant increase in demand for their services.

Workforce numbers relatively stable

Positively, at least for now, the paid workforce in the social purpose sector does not appear to have been as affected as those in the business sector. While just over a quarter (28%) of respondents had either stood staff down or reduced their hours of work, around three in 10 reported no impact to their workforce – so far.

While a few (5%) are employing more staff, 22% report their staff are working more hours to manage the additional demand.

Decline in volunteers significantly affecting delivery of services

However, the effect on volunteering is severe. In stark contrast to the paid workforce, 70% of organisations have had to let volunteers go or reduce the number of hours they contribute. Of those, seven in 10 have lost or reduced the hours of more than six volunteers. Only 15% have experienced no impact to their volunteer capacity so far.

Volunteers are the life-blood of most social purpose organisations, especially smaller ones who already face significant revenue loss. They run the opportunity shops, community halls, market stalls and fundraising events, but lockdown restrictions and social distancing prevent these activities from operating. This not only affects revenue; it also impacts service delivery – which will have significant long-term consequences for society.

Regardless of capacity, the impact of COVID-19 on the morale and motivation of employees and volunteers is acute. Over half (52%) report that the uncertainty of the COVID-19 situation is impacting their staff. A further 28% are concerned about the mental health and wellbeing of their staff and volunteers.

So, what needs to be done?

It is no surprise that when the sector was asked what strategic and operational support would be most valuable to them right now, funding, in all its forms, is at the top of the list. Also highly valued is advocacy to government and public relations support to help charities keep a focus on the issues and needs relevant to their purpose. Assistance to move systems and processes online, to develop programs that can be delivered virtually and to manage staff and volunteers working from home would also be valuable. With most funding being directed at a specific or discrete projects, there is often little available for investment or capacity building. With reports suggesting that the sector is slow to adopt digital technologies, the current situation may force them to make investments to improve efficiencies and expand their services.

Julia Keady, Founder/CEO, The Xfactor Collective said this study has confirmed many of the issues predicted and also matches up with the experience and insights shared by those participating in the RESET 2020 support and advice program, which has been running over the last couple of months to help provide practical advice and support to leaders struggling with how to respond to some of these impacts.

“The research and registration data paints a strong story about the sector’s backbone – the tens of thousands of small organisations who are normally juggling budgets, boards and beneficiaries in tight environments, let alone a financial downturn, let alone a pandemic.

We will continue to monitor the evolving impacts through further research, and in the meantime will continue to actively support the sector, especially the wellbeing and mental health of the organisation leaders who are navigating such extraordinary change and challenge.

With the COVID virus clearly being here for some time, we believe it’s critical to stay on top of the evolving needs of the sector. That’s why the RESET 2020 survey will be run again in September, and a full data set will be made available and free to the sector on the SEER Data Platform.”

Jodi Kennedy, General Manager, Trusts and Philanthropy, Equity Trustees said that this research has provided a baseline that will inform future sector support.

"Our commitment to this study reflects our aim to empower and strengthen social sector organisations, so they can continue to provide the key services and support they do to our society. This research helps us better understand exactly where the additional support is needed, and we are committed to continuing to ensure they have access to very practical advice and support they need to reset for a sustainable future."

The Full Report is available for free to all sector organisations, and can be downloaded here: RESET 2020 Research Study Report

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MEDIA ENQUIRIES

Julie Weldon, The Xfactor Collective RESET 2020 Communications Lead, This email address is being protected from spambots. You need JavaScript enabled to view it., Phone 0423 110 802

RESET 2020 Research Study Report

RESET 2020 Research Report Graphics

SURVEY FAST FACTS

The RESET 2020 National Impact+Need Research Study has been a collective and collaborative effort to capture the impacts of COVID-19, initiated and lead by The Xfactor Collective, supported by Equity Trustees and has included wide outreach from many partners including Lord Mayor’s Charitable Foundation, Philanthropy Australia, Foundation for Rural and Regional Renewal, the Australian Charities and Not-for-profits Commission (ACNC), Fundraising Institute Australia and many others.

A total of 380 completed responses were received, representing 23 communities of interest ranging from housing to health, environment and rural communities. Participating organisations employed a total of 38,000 employees, with more than 170,000 volunteers. Some 68% of respondents employed 10 or less employees, with two thirds of respondents reported revenues of less than $250,000.

Some 24% of respondents were tax deductible charities with DGR1 status, 27% of respondents were incorporated associations. The research sample had a near split between metro and rural/regional respondents, with 47% respondents based in capital cities and 53% based in regional, rural or remote Australia.

FINANCIAL IMPACTS

  • 64% have seen a loss of revenue since March 2020
  • 35% report a decline in general donations
  • Only 3% have experienced an increase in revenue
  • 45% are carrying operating reserves of six months or less

SERVICE DELIVERY IMPACTS

  • 56% respondents report an inability to delivery their services in the usual manner
  • 47% report a decrease in a demand for their services
  • 35% report an increase in a demand for their services

WORKFORCE IMPACTS

  • 28% of respondents have either stood down or reduced their employees’ hours of work
  • 29% reported no impact to their workforce so far
  • 22% report their staff are working more hours to manage the additional demand
  • 7% have lost employees due to illness, isolation or caring responsibilities
  • 5% are recruiting more employees

VOLUNTEERING IMPACTS

  • 70% of organisations have either stood volunteers down or reduced their hours
  • 17% have lost volunteers due to illness, isolation or caring responsibilities
  • Only 15% had experienced no impact to their volunteer capacity so far

WELLBEING IMPACTS

  • 53% indicated that uncertainty and change was having the greatest overall impact
  • 28% reported that staff and volunteer mental health and wellbeing is being impacted

IMPACTS ON BENEFICIARIES

  • 33% report an impact by the loss of face-to-face contact
  • 24% report an impact by effects of social isolation
  • 20% report an impact from job loss or financial hardship
  • 18% increase in mental illness and anxiety

The Full Report is available for free to all sector organisations, and can be downloaded here: RESET 2020 Research Study Report

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