Coronavirus and the Community Sector

Posted on 20 Mar 2020

By Chris Borthwick, thinker-in-residence, Our Community

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Here at Our Community we’ve always warned not-for-profits that they need a varied and balanced portfolio of income streams. Grants, donations, memberships, sales, sponsorships, special events – if you had a range of fundraising streams to spread the risk and would almost guarantee your survival in a tough environment.

There’s an old Spanish proverb that goes “We make our plans, and God laughs.” We didn’t put anything into our advice sheets that covered the present situation – a time when events have been shut down, businesses are frantically cutting back, people aren’t going out to their appointments, members can’t get the benefits they joined up for, donors are looking at a 20% fall in their superannuation accounts, and the government – the only player who still has as much money as it ever did – has not yet turned its attention to our problems. And that’s before counting in the bushfires.

So what do we do now?

Let’s scope out the dimensions of the problem.

First up, we know (pretty well) that it’s time-limited. Bad things will happen, for a while, and our lives will run through a narrow pipe, but eventually – in six months, or a year, or eighteen months – we will be back more or less where we were. If we only lived in Sleeping Beauty’s castle and could get the Princess to prick her finger we could fall into a dreamless sleep, leaving only one spotter awake to pick the moment when social distancing could stop and the Prince could safely be pointed up the stairs to Aurora’s bedroom, and when we woke up we could go on as if nothing had happened. Our community groups were coping with real needs, and those needs haven’t gone away – are quite probably worsening – and sooner or later people are going to find those needs sticking into them painfully and look around for the people who know how to deal with them.

You may feel that that’s not much comfort. Beauty’s reawakened castle, after all, still needed its customary support services, but we may be about to find out how the castle budget would have coped if twenty scullery-maids put in a bid for a hundred years’ back wages. But the time element does actually make a difference.

As you’re just marking time and will be back at the old stand soon, you’re going to need most of the staff you have now.

Making savings by slashing staff risks your capacity to recover later. There may be some scope for voluntary cutbacks – fewer casual hours, perhaps (within award limits), or (as in the AFL’s negotiations with its footballers) temporary drops in wages – but it’s important to keep the band together, if it’s at all possible.

Again, when we talk about the war on the coronavirus, it’s a war that will have deaths and leave trauma, but it’s not going to leave factories in rubble. It’s a war that cuts civilian production by as much as a hot conflict, but the enemy’s power is that simply that they have their finger on our society’s off switch. When the virus degrades enough for us to hit the on switch there will be as many planes, and restaurant kitchens, and theatres as there were before.

If you’re in trouble, too, there are certain benefits in having a lot of company. Normally if you were to ask your landlord for a cut in rent for the next few months their response would be to usher in the next potential tenant for a viewing. At this time, they could be holding that door open for quite a while – it’s a buyer’s market. If you’re paying off a bank loan, similarly, see if you can negotiate an extension (start by asking for a holiday, and haggle down).

Most not-for-profits don’t have large debts, though, because you can’t borrow much money without a solid income stream, and if a not-for-profit has a solid income stream that normally means some sharp businessperson will come in and try and take it off them.

At this point, a warning. You’re a not-for-profit, which means you’re working for a cause, which means it’s not about you. Don’t ask for sympathy. You may think that people want to know about your troubles. They don’t. If a bank admits it’s struggling, that doesn’t lead the public to make deposits – rather the contrary. You may think that if say you’re on the brink people will rush to your rescue. They won’t: they’ll turn away and give their money to someone else who they think will still be there for the cause next month. You absolutely must keep up your links with your supporters, but everything must be phrased in terms of the cause – how it’s under threat, and how the donor’s dollars could snatch it from the flames, and how you and the donor can work together for good.

In the longer term (and I appreciate that discussing the long term at this juncture is rather like trying to sell life insurance during the Gallipoli landing) we are all going to be entering a new world of possibilities. After this, nothing is impossible. Is your cause proposing 18 billion in new government spending? No? Not a problem, then. Are you asking for a 5% cut in this quarter’s GDP? No? Been there, done that. Are you asking for the nation to come behind you to create a new heaven and a new earth? Easy peasy one-two-threesie.

All we have to do is live through the next few months. Literally and figuratively.

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