Australian charities could be another victim of coronavirus

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The coronavirus pandemic could force about one in six Australian charities to shut their doors within six months, leaving many of Australia's most vulnerable people without vital services.

The pandemic could also see 200,000 jobs go as the $155 billion sector cuts costs and charities close. Nearly 90 percent of charities would be operating at a loss as a result of the fallout. The figures come from a new report released on Wednesday by Social Ventures Australia and the Centre for Social Impact, modeled off a 20 percent loss in revenue for the sector.

Contributor Kristy Muir says the modeling was based on what charities were already reporting, with 20 percent being a conservative figure."In the climate that we're in, do we want our charities to be partners in the recovery from COVID ... or will they become casualties too?" Ms. Muir told AAP. "Charities play a really important role in ensuring that that we can build back better and come back stronger."She warned one in 10 people across the country were employed by charities which accounted for eight percent of Australia's GDP.

While 65 percent of charities had an operating surplus in 2018, only 40 percent had a surplus higher than five percent.

"Their margins have been decreasing over the last few years already, and this was before COVID hit,"

Ms. Muir said. The report calls on the government to "ramp" JobKeeper payments rather than sticking to the hard September end date, putting in place temporary extensions in sub-sectors facing long recovery times. It's also recommending keeping JobSeeker payments at the current levels and establishing a new transformation fund to help charities restructure.

The fund would help train staff, buy new equipment, invest in new revenue-raising strategies, and establish a web presence.

Ms. Muir said some charities were barred from spending money on boosting their own capabilities or couldn't afford to.

"That costs money and as margins get tighter, those are some of the things that have been getting cut," she said.

"Really what we're looking at is how do we untap capital so charities can be at the best they can be."

The report also recommends cutting red tape for the sector by making it easier to raise funds and encourage philanthropy.

"Charities were already in a financially vulnerable position, because of the challenges they faced with their operating environments," Ms. Muir said. "We need to actually pull a couple of these triggers at once."