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Unlike the last financial crisis, which saw very few charities fail, some might not be able to survive COVID-19.
Statistics New Zealand recently highlighted data showing the monetary value of non-profit institutions at $12.1 billion in 2018.
According to Charities Services, there are more than 27,000 registered charities who employ around 130,000 staff and millions of hours are given in volunteer hours each week.
“Some not-for-profit entities will do better in the post-COVID-19 environment as it may put more focus on their area – for example, charities involved with food and mental health,” Craig Fisher, an Auckland-based accountant and Chartered Member of the IOD, said.
But Felicity Caird, general manager of the Institute of Directors (IOD) Governance Leadership Centre says charities are doing social good work for passion or for purpose and often rely on donations, grants, fund-raising, volunteer support, and bequests to stay afloat.
“During economic uncertainty, cash flow can be severely compromised, and there is intense competition for limited resources. Governing includes making difficult judgment calls.”
Some organisations will decide it is not sustainable to continue, but others might join forces with a similar organisation, or find innovative ways to deliver services or do things differently.
“One thing is for sure, and that is the old ways are unlikely to work in the new environment,” said Steven Moe who works in corporate law providing advice to companies, not-for-profits and social enterprises.
“It is the organisations which are nimble and able to look for opportunities which will survive. Doing that will likely involve sailing in a new direction, and as Allen Curnow said, that may result in an expanded world with new possibilities.”
Source
- stuff.co.nz
- iod.org.nz
- Image: rnz.co.nz
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