Introduction
1.1 Background to project
The Department of Families, Housing, Community Services and Indigenous Affairs commissioned the Centre for Corporate Public Affairs to undertake research into the impact of the current economic downturn on the operations of not-for-profit community organisations.
This follows a report completed in 2008,
Relationship Matters: Not-for-profit community organisations and corporate community investment,
which included input from about 200 not-for-profit (NFP) organisations via survey, workshops and interviews.
1.2 Project objectives
This research provides a snapshot of the magnitude of the impact of the economic downturn on the operations of not-for-profit organisations.
Our analysis focused on the following research questions.
- How is the global financial crisis and resulting uncertainty (including increased demand for services, reduced funding) impacting on not-for-profit operations, such as reducing costs/staff, reducing or holding off new services, collaborating/rationalising with peer organisations, and running down reserves?
- What impact will the economic downturn have on existing and potential community business partnerships, including delivery of services, sources of support (community activities, sponsorships, cause related marketing, volunteers, workplace giving), funding streams, and achievement of societal outcomes?
- What are the experiences, current and anticipated, of not-for-profit organisations in managing relationships with major donors, business and philanthropic partners?
- What are the impacts, if any, on the nature and direction of NFP priorities and activities?
- What opportunities can arise from the economic downturn?
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1.3 Methodology
The study incorporates research from three sources - an online survey of not-for-profit organisations, select consultations with NFP organisations through focus groups and individual phone consultations.
The consultants also reviewed relevant research from the Victorian Department of Planning and Community Development, as well as recent reports prepared for VCOSS and a consortium of NFP organisations.
Online survey
The Centre developed and managed an online survey of Australian not-for-profit organisations to capture the views of a broad range of organisations. The online survey was open between 20 May and 10 June 2009.
The survey was distributed to more than 700 not-for-profit organisations. Seventy-three NFP organisations completed the online survey.
Figure 1.1 illustrates the range of activities of those not-for-profit organisations that participated in the survey. Most respondent organisations work in activities related to health, youth, education and training, children and child welfare. Note that respondents were able to choose multiple categories.
Figure 1.1: Classification 
Source: Centre for Corporate Public Affairs, Survey of NFP organisations 2009. Survey respondents were asked to nominate areas of principal activity. More than one category may apply. N=64.
Nearly 40 per cent of organisations surveyed employ 0 to 9 full-time staff. Thirty-seven per cent employ 10 to 49 full-time staff. Two-thirds of not-for-profit organisations surveyed employ less than 10 part-time staff.
Figure 1.2: Employment Demographics 
Source: Centre for Corporate Public Affairs, Survey of NFP organisations 2009. N=66.
Figure 1.3 illustrates that nearly a third of organisations surveyed have large numbers of volunteers working in them (between 100 and 499 volunteers). Eleven per cent of not-for-profit organisations surveyed have more than 500 volunteers.
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Figure 1.3: Volunteer Demographics 
Source: Centre for Corporate Public Affairs, Survey of NFP organisations 2009. N=66.
About half of the not-for-profit organisations surveyed derive a substantial part of their cash incomes from government sources (50% or more of their cash incomes).
According to the Centre's previous research (Centre for Corporate Public Affairs, 2008), a substantial proportion of this government support appears to be funding for delivery of government programs and services. We note that there may be a higher proportion of government-funded NFP organisations represented in this study, compared to ABS data. In the 2006-07 financial year, government funding accounted for 33.5 per cent of funding to NFP organisations (ABS 2009).
Figure 1.4: Sources of cash Income 
Source: Centre for Corporate Public Affairs, Survey of NFP organisations 2009. N=66.
The not-for-profit organisations surveyed have activities and operations across Australia. Nearly one third were national not-for-profits. Just under 30 per cent had activities/operations in Western Australia, and a slightly lower number had activities/operations in New South Wales and Victoria. Not-for-profit organisations with activities or operations in Queensland, ACT, South Australia Tasmania and Northern Territory also participated in this survey.
Consultations with not-for-profit organisations For the purposes of this research, the Centre for Corporate Public Affairs convened small participant focus groups in Sydney, Melbourne, and Perth. Twenty-five not-for-profit practitioners attended the focus groups. Additionally we spoke to a small number of practitioners who were unable to attend the focus group but who wanted to provide input to this report.
The discussions and insights from the focus groups are reported and cited in this study.