May 18, 2020

The value of charity and charities

How do we ensure our charities' survival, contribution and rebuild in the wake of COVID-19?

CEO Update - May 2020

by Professor Kristy Muir

My Aunty Val passed away recently. It was such a shock for all of our family (as death often is). Grief is so gut-wrenchingly hard at any time. In COVID-19 lockdown - when you can’t be with, sit with, and hug family and friends, you can’t personally say goodbye at a funeral or share a drink and a memory at a wake - the loneliness, sadness and rawness felt even more amplified. But even though many of the important rituals and cultural norms were lost in celebrating her life, she was so well remembered by those who loved her.

My Aunt was one of those women who spent her life in the service of others. She was always helping – always dropping off food to people who were sick or needed a hand, she was fixing things, driving people around, asking what could be done to help and proactively finding ways to do it. She was remembered by many as a second mother, a social networker and social capital builder before we even knew what those terms meant. She had a kind and generous heart and she never judged [well, she never judged anyone who was in need of assistance – her last text message to me after she’d read one of my latest articles read: “Pity more people don’t think with the brains they’ve been given”]. Aunty Val was a very bright women, an energiser bunny and she had a heart of gold. She was the absolute definition of charity: “kindness and sympathy toward other people” (Oxford Dictionary) and she was herself “a system of giving money, food, or help free to those who are in need because they are ill, poor, or have no home” (Cambridge Dictionary).

Remembering Aunty Val’s kindness and contributions to society got me thinking about charity and what it actually means. It got me thinking about the army of people who have spent their lifetime informally supporting others and the army of formal volunteers within our registered charities and not-for-profits, all 3.3 million of them. Formal volunteers were estimated to contribute 328 million unpaid volunteering hours in 2014-15: at an estimated equivalent value of $12.8 billion in wages if they had been paid. We could only imagine the scale of charity when we find all the Aunty Val’s of the world who go about their day supporting others but who aren’t recognised as formal volunteers.

“Charity” has been both voluntary and formalised throughout our history. Up until the second world war, charities (many of which were religious) provided almost all our social services. It’s only more recently that we have had increased regulation and documentation of our registered charities and not-for-profits sector through the Australian Charities and Not-for-Profit Commission (ACNC). 

Charity and charities play a fundamental role in the functioning of society – not just for those who are most vulnerable, but also as the fabric of communities. Kindness, sympathy, a systematic way to give money, food or other help to people or the environment is a linchpin for humanity.

Almost every aspect of our lives (whether we are vulnerable or not) is touched by the charity we receive from those around us and by formal or informal not-for-profits or community organisations. Many of our sporting and recreational activities, our art galleries, museums, our religious groups, our education providers, our health, aged, child-care and disability services, our community services, our humanitarian aid, our legal services are not-for-profits or charities.

Our charities and not-for-profits play an important role in our economy too. Back in November 2017, Deloitte Economics valued the economic contribution of the charity sector at $129billion. Our registered charities and not-for-profits employ almost 1.3 million people. But from a ‘values’ rather than a ‘dollar value’ perspective, charity in Australia, whatever it’s legal form - charities, not-for-profits, community organisations, social enterprises, social businesses, ancillary funds etc - is immeasurable.

These organisations do incredible work. Many have found ways to support their communities and people despite incredible challenges during COVID-19. But as the economy becomes more fragile, they will have higher demands and some will struggle to survive, irrespective of their value to society. Many are already struggling with underfunded services, cross-subsidisation, and a culture where donors don’t want to pay for overheads that charities need to do their job well. This has left many (especially smaller organisations who are integral to the community) with inadequate equipment and a lack of investment in their capacity to respond in times like these.

We are seeing some impressive funding responses, such as untied funding, but more needs to be done and we need to question whether traditional market mechanisms and funding models are fit for the charities sector[i]. And, while some of the crisis responses have been incredible, there are still significant groups who are being left behind, including asylum seekers, migrants, international students, short-term casual workers and more[ii].

There are concerns, not just about people left behind, but also about the “snapback” reversion to the past (such as previous unemployment benefit payments) or, worse, a regression from the progress we have previously made while the country falls into further economic hardship.

The Treasurer has called the economic outlook “sobering”. While Treasury has not yet released projections, Deloitte Access Economics has predicted a $360 billion cash deficit between this financial year and 2022-23. What will the largest deficit in history mean for charity, charities and society into the future? How do we ensure charity and charities continue to be valued? And how do we ensure our charities’ survival, contribution and rebuild in the wake of COVID-19?

CSI is actively tackling these questions in collaboration with others in a number of ways: including, as part of the Charities Crisis Cabinet and our National Pulse of the For-Purpose Sector and Build Back Better project. We are looking to collaborate with the for-purpose sector to understand what is changing over time and to work out how we build back better for the benefit of society.

In the meantime, Vale Aunty Val and let me pay tribute and give my thanks to the many millions of people who open their hearts and act with charity in whatever ways they can.


Professor Muir will join CCA CEO David Crosbie in conversation for an upcoming Impact2020 webinar on May 21. To register, click here.

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