Keeping the “forgotten sector” together

By Kieran Madden May 26, 2020

My two-year old daughter hasn’t quite worked out that some things cannot be fixed or brought back to life, no matter how much “ticky-tape” is used. Our charitable sector is like this—once charities are gone they’re gone, and for the sake of all those who rely upon them, we must do all we can to keep them together.

The sector employs many, and crucially, is a crucial catalyst of volunteer labour. According to DIA statistics, there were around 27,000 registered charities with around 180,000 paid staff and over 230,000 volunteers. Tourism, hospitality and retail have received a lot of focus, but community organisations have broadly been forgotten. Around 130,000 people work in hospitality, for contrast. Communities are not just at risk, but livelihoods too.

Once charities are gone they’re gone

The sector was already feeling the financial pinch before Covid-19. Last year, submitters to the Modernising the Charities Act bill identified that one of their big challenges was “sustainability and financial viability of organisations.” Many organisations, including those contracting social services to the Government to support families have reported independently-assessed shortfalls in funding to the tune of over half a billion dollars a year.

And it’s going to get much worse. In the best of times, community organisations operate on a shoestring—especially smaller ones. Their very nature as non-profits mean they have very few financial reserves, and many have had to cancel fundraising events, close op-shops, and severely limit donor relations. They have been squeezed in two ways: funding is drying up as financial supporters curb their donations, and, at the same time, the needs of communities they serve stricken by Covid-19 is rising.

The Government has said the right things and taken some steps towards helping the sector, but it’s not enough. Opening up the wage subsidies to charitable trusts was a critical step, but they won’t be there forever. The Budget also included $79 million to support social service providers, and $36 million in grants for community groups (especially Māori, Pacific and refugee and migrant communities), while another $35 million was also recently announced for boosting budgeting services, which is good. But with over $50 billion tagged to the Covid-19 Response and Recovery fund, this support to charitable sector is a comparative pittance.

Opening up the wage subsidies to charitable trusts was a critical step, but they won’t be there forever.

What more could be done? For one, Government should increase the funding available and extend the timeframe for grants to recover from the impacts of Covid-19. Another idea is for the Government to match private donations dollar-for-dollar for a period and/or increase the tax credits for donors, which could promote cohesion and positivity for the “team of five million” too. Overall, the response requires a greater strategic focus, advised by those in the sector.

In his Budget speech, Treasurer Grant Robertson said the Budget wasn’t just about jobs, but also about rebuilding the “social infrastructure – acknowledging the toll this crisis has taken on our communities, and on the people and places that hold them together.” This infrastructure is crumbling, and the Government, philanthropists, and ordinary New Zealanders need to come together to save these life-giving organisations.

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