Figures point to steady recovery

THE not-for-profit sector was among those most affected by the economic downturn, with about half of the respondents of a recent survey experiencing a decline in income in the six months to February.

However, the ‘Managing for Recovery: The State of the Not-for-Profit Sector’ report shows this result was better than the previous six months (to August 2009), when 62 per cent of charities experienced a decline in income and 21 per cent recorded flat income.

The report, compiled by the Centre for Social Impact, PricewaterhouseCoopers and the Fundraising Institute Australia, indicated that while the global financial crisis affected the bottom line of most NFPs, those in Australia fared slightly better than their global counterparts.

A survey by the Charity Commission for England and Wales in August last year found the incomes of 56 per cent of NFPs were hit by the economic downturn, up from 52 per cent in February that year.

Similarly in the US, not-for-profit news medium ‘The Chronicle of Philanthropy’ found that charitable income fell about 9 per cent in 2009.

A recent survey by US-based not-for-profit information service GuideStar found that 52 per cent of American NFPs experienced a significant drop in contributions from March to May 2009, the same trend that occurred during the previous five-month period.

The Managing for Recovery report, however, found that despite these challenging conditions, NFPs in Australia are emerging as markedly more optimistic about the 12 months ahead.

“Although the past year has been really tough for many NFPs, and severe challenges remain, a mood of greater hope is returning,” the report said.

“The adverse impact of the downturn has not generally been as great as anticipated in May 2009, and many respondents believe the worst may be behind them.

“There is a sense that circumstances are improving.”

Founding chief executive of charity Dreamfit Foundation, Darren Lomman, said while 2009 was a tough year with external funding cuts preventing some projects coming to fruition, he was bullish about prospects for the coming year.

“It (2009) was a pretty tough year all round; we actually had to lay off a few staff because, overall, during the year we lost money,” he said.

“We just couldn’t bring in the sponsorship we needed to cover all our costs.”

Mr Lomman said Dreamfit was able to survive the downturn despite the loss in overall income because of a five-year funding partnership previously established with the University of Western Australia.

“We kept on with them, which has been our saving grace,” he said.

“Had we not had them, I think we would have gone under completely last year.

“So we were fortunate to have one major stable funder that looked after us and they covered all our basic overhead and admin costs.”

Two large health and welfare organisations, which declined to be named, said major donations in WA during 2009 to their respective organisations had been significantly affected.

However, both said that, in the 2009-10 financial year, there had been an increase in both corporate and state government funding, with an expected increase in private and individual benefaction, particularly through bequests this year.