The first six months of 2020 have been extraordinary.
Over summer, bushfires devastated many parts of Australia and left a lasting impression on communities across the country. As I write this column, we continue to feel the effects of the COVID-19 global pandemic.
These disasters have brought significant challenges to Australia's charities, particularly affecting funding and financial management.
The outpouring of generosity during and after the bushfires saw many charities experience a significant spike in donations. These charities had to adapt quickly to ensure appropriate governance was in place to manage charity funds effectively and protect donations from fraud.
And as the worst of the bushfires began to subside, the COVID-19 pandemic arrived and presented a whole new set of challenges to charity operations.
We continue to operate with a great deal of uncertainty and, after many weeks of lockdown, the full effects of the pandemic are now being felt.
In response to COVID-19, there has been unprecedented financial support for charities from governments, including assistance measures such as Boosting Cash Flow for Employers and JobKeeper via the ATO.
Many charities have found innovative ways to operate and manage volunteers online, but the physical distancing measures needed to control the spread of the virus have affected some charities’ abilities to deliver services and raise funds. Small charities in particular may be struggling with reduced volunteer numbers, an inability to hold face-to-face events and many supporters unable to donate because they are now out of work.
Managing money through this uncertain time has become especially important.
In speaking to charities directly over the last few months, the most common thing I have heard is the need for charities to adapt and diversify their income sources.
For some charities, this has meant adapting operations to respond directly to the pandemic. One example of this is Free 3D Hands, a maker of prosthetics, which started producing personal protective gear for front-line workers. We spoke to Free 3D Hands to find out how they managed to adapt their operations, while ensuring they did not risk losing their charitable status.
Many charities continue to harness technology, embracing online fundraising and donation platforms. Others have shifted entire fundraising events online, staging virtual fundraisers or engaging with their supporters and volunteers through online meeting applications.
But just as important as fundraising is, being prudent with charity spending is equally as important.
Having honest discussions with the board about budgets, carefully considering the use of reserves, and being frank about risk is critical. We also encourage charities to seek expert professional advice if they believe they may be at risk of insolvency to protect their legacy and remaining assets.
As the regulator, we aim to provide relevant and timely guidance and support to the sector where we can – we have a range of COVID-related resources available to help.
Our next webinar will specifically look at how charities can manage their money. I encourage charity representatives to register for this webinar.
Australia's charity sector is vibrant and innovative and has never been shy about using new ways to get the job done. Much of this starts with the work of charity leaders and the examples they set – it is during times like these that transparent and innovative leadership is most needed.
The Hon Dr Gary Johns