Funding certainty needed for NFPs and charities in COVID-19 crisis

The AICD acknowledges the Morrison Government’s significant measures to assist parts of the sector, including extending the JobKeeper wage subsidy to charities and targeted funding for mental health services, domestic violence support and Medicare assistance.

However, the long-term viability of a substantial number of NFPs and charities across Australia will remain under threat without a stimulus package for the whole sector.

NFPs and charities contribute more than 8 per cent of Australia’s GDP and employ more than 1.3 million people.

AICD CEO and Managing Director, Angus Armour, said, “I start by acknowledging the Government’s significant measures but we need to adapt to a surge in demand for many NFP community services, at a time when it will be difficult – if not impossible – for many NFPs to financially withstand the impact of COVID-19 without substantial additional support.

“Increased demand, decreased donations, loss of access to volunteers, inability to hold fundraising events and in some cases significant loss of operating revenues are examples of the difficulties this sector is facing.

“It is critical for our society and economy to maintain the viability of the NFP sector in anticipation of the post-COVID environment, when we expect that demand for vital community services will continue at unprecedented levels,” Mr Armour said.

The AICD is recommending that:

• The government implements an urgent relief package for the NFP and charities sector to support their financial sustainability, including bringing forward the payment of committed government funding as soon as possible, and extending funding commitments to all organisations for an initial 12 months to provide certainty and capacity to address current cash flow constraints; and
• By default, any stimulus or assistance measures aimed at supporting businesses should automatically apply to NFPs as well.

Additional measures that the AICD is urging the federal government to consider include:

• A tailored scheme to encourage lending to NFPs and charities to ensure access to credit on favourable terms. Currently, many NFPs and charities will not be able to access credit from banking institutions as they fall outside institutions’ lending guidelines.
• Additional incentives that support charitable giving at this time.
• A 12-month moratorium at all levels of government from all tax liabilities, charges and rental fees (where relevant).
• Additional direct funding being provided to NFPs and charities.

Media Contact: Maegen Sykes 0439 167 567