Radical shifts in demand for services and heightened concerns about funds are at the top of grant recipients’ agendas in the wake of the COVID-19 crisis, studies on both sides of the Tasman Sea reveal.
Grantmakers in Australia and New Zealand share many similarities when it comes to good grantmaking, funding and governance, and two surveys of not-for-profits and community sector agencies reveal a similar pattern of challenges for organisations.
Understanding those challenges is essential for grantmakers. To skip to recommendations, scroll to “Your response”.
Our suggestions are based on these studies:
- Our Community’s COVID-19 Community Sector Impact Survey, based on Australian groups, and
- SociaLink’s COVID-19 Western Bay of Plenty Social Sector Survey about that region of New Zealand.
Australian study ‘reveals 230,000 groups under threat’
Our Community sought to understand what impact the COVID-19 pandemic is having on the Australian not-for-profit sector, particularly small to medium organisations. A total of 366 individuals responded to the survey, representing a small sample of the country’s estimated 600,000 groups.
Key findings included:
- 33% of respondents believed COVID-19 poses a “significant threat” to their group's ongoing viability; 53% describe their post-pandemic future as uncertain; and 14% describe their future state as “weaker”.
- Nearly all respondents (85%) say their group has been affected by social distancing laws, with many having ceased all activity.
- Two-thirds (67%) have seen a drop in fundraising income.
- One-third (35%) have reduced staff, with 40% unsure if there will be further reductions.
- More than half (57%) have seen a drop in volunteer activity.
- 39% believe they have not received the support they need from government, philanthropy and peak bodies.
The survey is one of the initiatives of Our Community’s Save Our Sector (SOS) campaign, which provides free information, tools and advice to help not-for-profits survive the crisis. These resources include news updates, instructional help sheets, policy templates and webinars.
NZ study tracks massive shifts in services
The New Zealand survey by SociaLink, an umbrella organisation that supports the social and community sector in the North Island’s Western Bay of Plenty region, quizzed 104 individuals from 84 organisations during the Level 4 lockdown, in which schools and non-essential businesses were closed and travel was severely limited.
Key findings about those organisations included:
- 82% were no longer providing face-to-face services
- 54% had cancelled services, or were delivering services remotely for the first time
- 48% faced “unanticipated changes” to their agency’s normal work or roles
- 41% had stopped delivering the majority of usual services
- 26% faced a funding shortfall
- 24% faced an increase in clients or issues
- 24% struggled to use or access personal protective equipment (PPE)
SociaLink expects to use the results to advocate to government and other funders for assistance for those agencies. While the study was comprehensive, it was limited to a relatively small region – the Western Bay of Plenty District Council area is home to just over 50,000 people near the city of Tauranga.
Another New Zealand study conducted during the same period – but across the country – complemented the SociaLink findings, revealing 95% of charities surveyed had been affected by COVID-19.
That study of 200 charities by United Way found:
- More than 74% required additional funding
- 41% needed more staff and volunteers
- 27% needed more resources to maintain the support they had been providing before the pandemic.
So what should grantmakers do?
These surveys provide further evidence that the not-for-profit and community sectors have been severely affected by the COVID-19 pandemic.
And they highlight the need for grantmakers to support their grantees not only to continue to deliver programs where possible, but also to help them to build their capability to survive this challenging time.
Using a sample of insights common to both surveys, we’ve outlined some possible strategies grantmakers can use to support grantees.
We suggest reading these suggestions in conjunction with our recent help sheet Grantmaking in a COVID-19 world, which is aimed at helping you formulate an appropriate grantmaking response, taking into account your grants cycle, your grants management practices and how you’d like to respond to the crisis.
Demand for services faces shake-up
Changes in demand for services – both reductions and increases – were a key theme in both the Australian and New Zealand surveys. How that demand changed varied by the type of services, but with few exceptions, most organisations experienced significant changes.
In both countries, nearly half of all organisations reported a drop in demand (50% in New Zealand, 47% in Australia).
In New Zealand, 14% of respondents to the SocialLink survey had stopped delivering services altogether during lockdown, while on the flip side, 17.5% saw a rise in service delivery.
Respondents reported decreased demand for sport and recreation, education support and environmental programs, but increased demand for food provision, homelessness support and Kaupapa Māori services (which emphasize Maori cultures, but are inclusive of others).
The Our Community survey of Australian organisations revealed an almost even split between organisations reporting a decrease in demand (47%) and those reporting an increase in demand (51%).
Australian respondents reported reduced demand for sport and recreation, education support and arts programs, but increased demand for family violence, material aid and health (including mental health) services.
Your response: How to support grantees whose needs have changed
Groups with higher demand
If budgets allow, grantmakers looking to assist organisations facing increased demand for their services may consider providing additional funding to enable them to continue to meet the needs of their communities.
Reducing the administrative burden on grant recipients (e.g. streamlining or deferring reporting requirements) can also free up valuable resources that could otherwise be directed towards service delivery.
Groups with reduced demand
Organisations that have stopped delivering services or are experiencing reduced demand also need urgent support. Grantmakers may consider varying their grant agreements to allow rescheduling of activities, adapting funded activities so they can continue to be delivered, and adjusting performance targets.
Converting grants to unrestricted funding or reducing restrictions on funding can provide organisations with the flexibility they need to quickly adapt to the changing needs of their communities.
Funding and fundraising
Funding and fundraising are a key concern for community organisations on both sides of the Tasman.
51% of respondents to the SocialLink survey reported a reduction or expected reduction in income with a further 22% unsure of future funding. Many respondents were also concerned about their ongoing viability. The United Way study reported that 74% of New Zealand organisations saw the need for additional funding.
The Our Community survey asked organisations about the impact of COVID-19 on their fundraising income, with 47% of respondents saying they had experienced a significant decrease in fundraising income and a further 20% a slight decrease.
Your response: How to support grantees facing revenue shortfalls
Grantmakers should talk to organisations about how they expect income shortfalls will affect their operations and overall sustainability. Grantmakers looking to support these agencies may consider increasing funding or providing additional emergency response grants.
If budgets don’t allow for increased expenditure, other options to support grant recipients include bringing forward future payments or reducing restrictions on existing funding.
Adapting to disruption
Social distancing measures have had a significant impact on the work of the community and not-for-profit sector in both countries.
SocialLink respondents reported that they had ceased face to face services (82%), instituted remote working for staff (63%), and begun online service delivery (53%).
In Australia, 86% of respondents said social distancing laws had affected their ability to function. Responses to how they had adapted varied widely, but included changes to work practices, shifting services online and setting up employees to work from home.
Your response: How to help grantees to adopt new ways of working
Grantmakers looking to help organisations to adapt to a COVID-19 world may consider in-kind assistance or additional organisational support grants to help them to build their organisational capacity, technological infrastructure and resilience. Contract variations are another option to allow organisations to amend project activities, program delivery or the focus of projects.
More support is needed in IT, planning
Both surveys asked respondents what support they required most to navigate the COVID-19 pandemic. As you would expect, additional funding featured prominently in responses. But groups in both countries also said help with IT infrastructure was a high-priority need.
In the SocialLink survey, 54% of respondents needed support to properly consider the implications of COVID-19 for ongoing and future service delivery, 46% wanted additional funding, and 32% sought help with IT and other technology.
The Our Community study also saw financial support top the list of needs, with some respondents saying they would welcome discounts on a range of costs – but respondents also sought help to transition to online working in the form of funds for IT infrastructure and in-kind ICT expertise. Groups also highlighted their need for volunteers to return to their roles.
Your response: Engage, listen, and act accordingly
In many cases, grantmakers are well placed to respond to non-financial needs as well as to provide direct funding. Good communication with your grant recipients will help uncover whether and how that can be made possible.
While surveys such as these can provide insights into broad issues facing the entire sector, they are no substitute for one-on-one engagement and open communication with grantees.
There is no one-size-fits-all approach to supporting grant recipients through a crisis like this. When considering your approach, it is critical that you have honest conversations with grantees about their individual circumstances, their program delivery and their overall sustainability, and tailor your response accordingly.
SociaLink survey: COVID-19 Western Bay of Plenty Social Sector Survey Findings | Download PDF
Help sheet to formulate your grantmaking response: Grantmaking in a COVID-19 world
Further studies into how not-for-profits have been affected: Our Community COVID-19 Research Hub