March 29, 2021

At what cost do we let our charities shut their doors?

A few short weeks ago, I said goodbye to a beautiful soul and friend. I was with many others, including her husband and kids. Like many funerals, there was much sadness and loss, love and laughter, and grief for a lost future. She was a bright light full of love, with the most kind and generous heart.

In his eulogy, her husband spoke about how she’d take hotdogs to people sleeping rough near the station. She later volunteered formally and changed careers to work in disability care. Ironically, not long after, she was diagnosed with motor neurone disease (MND) and needed all the supports society could wrap around her and her family.

But even with these supports, her husband and kids became her carers. Their life was not a future any of them imagined before diagnosis and, like many families in this type of situation, money became scarce.

Watching someone die with MND is heartbreaking. It’s a terminal, neurological disease with an average life expectancy of 2.5 years that is coupled with a progressive loss of the ability to move, speak, swallow and breathe. In Australia, two people die from MND and another two are diagnosed every day.

It’s for people like my friend and her family that charities like MND Australia exist. They work to “promote optimal care outcomes for people living with MND and enable research that will identify the cause and lead to better care, control, and ultimately a cure for MND.”

MND Australia is striving to achieve this admirable mission with less than $1 million in annual revenue and 29.2% drop in donations in 2019/20. Even with government subsidies, it ran a significant deficit in the 2019/20 financial year. With no further COVID-19 government subsidies in 2021 and an expected continuing drop in donations, the 2020/21 year is likely to again return a deficit.

This charity does very real, important, potentially life-saving work.

As a society, are we prepared to let it shut its doors? Of course not. But this is the possible fate for many charities. Seventy-two percent of charities surveyed in 2020 saw donations drop, with nearly half saying the impact was severe. Recent modelling found that with government subsidies ending in March, 14% of charities are at risk of becoming unviable and 44% making an operating loss by September 2021.

This has serious implications for meeting needs, especially when 80% of organisations surveyed were already unable to meet requests for services in the last year. It also has economic implications. The charities sector employs one in 10 of the workforce (as many as retail and construction and five times mining) and contributes as much directly to Australia’s GDP as retail and more than nine other industries.

If we’re serious about achieving the goals of charities like MND Australia, we’re going to have to get serious about how we resource and support them while they are facing more demand with fewer resources. We can’t afford not to.

There is a role for philanthropy to increase giving. In 2017-18 there was $19.38 billion in philanthropic funds and trusts, but only 7% ($1.35 billion) was distributed in grants. Pushing this to 15% would unlock another $1.5 billion and still leave over $16 billion for future giving. But on average, donations and grants only account for a small proportion (6.8%) of charities’ revenue overall, compared to 47% from government.

This makes government a lifeline. And, one of these lifelines — JobKeeper — ended in March. Donations will not miraculously bounce back in April. The decrease in donations is set to continue and so, therefore, should JobKeeper.

Not all of us have the resources to give money, but as I grieve the loss of my friend, I reflect on the fact that we can all make a positive mark on the people and places around us.

We all have something to give: our skills, time, a smile, conversation or an act of kindness. And, more than ever, our charities need our and the government’s support to ensure their viability to help create the society we want and need.

Kristy Muir
CEO, Centre for Social Impact

* This article was originally published on The Mandarin website.

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