Covid hits charities hard: arts, culture and heritage suffers the most - JBWere report

Giordan Bellincampi conducts the Auckland Philharmonia Orchestra APO during the Beethoven concert at the Auckland Town Hall in July. Photo / Supplied

Covid hit New Zealand charities hard, with some suffering a loss of half their income last year according to a new study out today.

The JBWere New Zealand Cause Report studied 400 charities and listed 14 broader categories of causes or activities.

Arts, culture and heritage suffered the most during the first six months of the pandemic last year. The report listed the Auckland Philharmonia Trust as one of the top 10 organisations by income in the arts, culture and heritage category.

More than a third of the organisations sampled in the arts and culture sector suffered a 50 per cent decline in revenue, mainly due to events being cancelled.

Sport and recreation was the second hardest hit with 27 per cent of those organisations sampled in that sector suffering 50 per cent or more decline in revenue in the first six months of last year.

John Morrow, JBWere's head of philanthropy, said social services had also suffered heavily. Those include aged care, child welfare, youth and family, he said.

"Organisations in that sector have faced increased demand due to the pandemic but had to continue operating with existing funding levels. Some suffered drops income as well," he said.

"Covid has amplified issues that already existed. The needs haven't gone away. If anything, they've become accentuated and some of these organisations are really struggling to cope," he said.

Morrow said the report captured more than a decade of trends in the charity sector.

"Evidence of Covid accelerating existing trends is evident," he said.

"The hardest hit - organisations with 50 per cent or more loss of revenue - were those event-heavy sectors like sport and recreation and arts, culture and heritage, as well as the social services working intimately with the most vulnerable in our communities," Morrow said.

The Government wage subsidies helped some, but not all.

As a whole, the sector is doing even more for less, with already thin operating margins and only modest reserves to draw on to meet any covid triggered operating deficits.

Waipareira Trust vaccination centre at the Trusts Stadium, Henderson. Photo / Dean Purcell

In May and June last year, regular donation volumes dropped. Major donor income was stable. Organisations that were sophisticated and well-resourced were better placed than small ones in the face of the pandemic.

The charity sector contributed 4.2 per cent of New Zealand's GDP, amounting to $12.1b per annum in 2018. In comparison, the primary industry sector contributed 7 per cent so Morrow said those two percentage figures showed how significant the charity sector is in this country.

"The value of the sector is often underestimated. It is worth $12.1b to our GDP, but more importantly, it is the fabric of our society, playing a vital role in building healthy communities. This sector provides critical services and support that contributes to socio-economic stability and mobility, and in turn, supports a more inclusive Aotearoa New Zealand," Morrow said.

The report found 21 per cent of New Zealand's not-for-profit organisations are registered charities. The numbers of new annual registrations are growing but at a slower rate than previously.

Volunteers are of critical importance, donating the equivalent of $4b annual value to the sector. New Zealand has 234,618 volunteers who give of their time each week and nine in 10 organisations rely solely on a volunteer workforce.