'Double whammy': Less than one in five charities get JobKeeper

The charity and non-profit sector has been hit hard by COVID-19, with drops in donations and impaired abilities to raise funds.

There are almost 60,000 charities registered with the Australian Charities and Not for Profit Commission. Around 24,800 of those are registered as having employees.

According to the Australian Taxation Office, 4800 charities registered for the JobKeeper wage subsidy program, 4200 of which it expects are eligible because their revenue dropped by at least 15 per cent.

Leaders in the sector have already sounded the alarm about the future for the sector, calling for the JobKeeper program to be gradually tapered off instead of ending completely in September.

Social Ventures Australia and the Centre for Social Impact reported last week that 200,000 jobs were at risk in the sector. That research was based on modelling charities with employees experiencing a 20 per cent drop in revenue, and found 17 per cent would be at risk of closing their doors within six months.

Social Ventures Australia chief executive Suzie Riddell said these new figures showed the problem facing the sector is worse than what that research projected, as it assumed more charities would be breaking even by accessing JobKeeper.

"If that's not the case, and we believe many charities have had the cuts in income, that means we'll see cuts in jobs and services sooner."

These figures showed help was needed more urgently, according to Ms Riddell.

Ms Riddell said the sector was hit particularly hard by COVID-19 and if government assistance to both the sector and those who need its services was cut off too soon they faced a "double whammy" in coming months.

Charities can't raise equity, issue shares or get loans in the same way businesses can, Ms Riddell said, so if donations and government assistance dry up "the only lever they have is to cut costs".

"That will compound the crisis at exactly the time we need them to be partners in recovery."

As well as extending JobKeeper, Ms Riddell said a one-off charities transformation fund was needed, in addition to simplified fundraising rules to increase giving. Charities that receive government funding needed that funding guaranteed, and even increased where there are increased costs and demand to deliver those services, she said.

Ms Riddell also warned against returning the JobSeeker payment to its pre-COVID level, saying an increased number of people receiving the $40 a day payment would result in increased demand on charities.

ACT Council Of Social Service chief executive Emma Campbell said JobKeeper had been a lifeline for many charities, but the small number of charities accessing the scheme shouldn't be seen as a sign the sector was doing well. Instead it pointed to the complexity of applying for small organisations, and the likelihood that organisations with mostly casualised workforces wouldn't qualify either.

"One of the reasons why a lot of smaller organisations may not have applied is that they don't have the administrative know-how," she said.

ACTCOSS ran an information session about how to apply for the program, and Ms Campbell said demand for the help was high from both large and small organisations.

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Ms Riddell said she would be surprised if all the charities that hadn't applied for JobKeeper hadn't experienced the 15 per cent drop in revenue required to be eligible.

Labor's spokesman on charities, Andrew Leigh, said the small number of charities accessing JobKeeper showed the government hasn't done enough to make the program accessible.

"The scale of support for charities doesn't seem to match the seismic hit that the the sector is experiencing," he said.

Dr Leigh said the government's support packages for the sector had only gone to emergency relief and family violence groups, and needed to be broader.

"[The government] has failed to realise that this is a sector that employs a tenth of Australians, that provides fundamental services from early childhood to housing, which is critical for recovery."

Assistant Minister for Charities Zed Seselja said there was no cap on the number of charities that could apply for JobKeeper.

"Charities have access to a JobKeeper test more generous than that offered to any other sector, with a 15 per cent turnover decline test and the option to exclude government revenue from their calculations," Senator Seselja said, also pointing to a range of measures available to the sector, including a $200 million community support package.

"I have been consulting closely with the charitable sector as we have responded to the COVID-19 crisis, ensuring the concerns of the sector were heard and formed part of the discussion and measures in responding to COVID-19."

Wealth management company JBWere estimates giving will fall by 7.1 per cent in 2020 in Australia, but the larger effect will be felt in 2021, when giving will drop by a further 11.9 per cent, back to 2012 levels.