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Office for the Community and Voluntary Sector (OCVS),
Although it is too early to assess the overall impact of the economic recession on the community sector in New Zealand, we have already noticed a wide range of conflicting reports on what may or may not happen.
Some data and historical evidence indicates that the community sector may fare better than the private sector, as people and organisations continue to support 'good work' or focus on 'what really matters', rather than luxury items or frivolous things.
However, in reality many philanthropic trusts, corporates, and local and central government may have less money to distribute due to lower returns on investments. Although all investment income will be reduced, trusts and foundations with heavy exposure to international financial markets are more seriously affected.
Signals are mixed. Already in New Zealand, we have seen some trusts announce suspensions of their grant programmes, while others have confirmed, that despite investment losses, they will continue to make grants at lesser or similar levels to previous years. With government spending also under the spotlight, this could put extra pressure on organisations that rely on multiple funding streams to deliver core services.
Apart from potential changes in the amount of money available to some community groups, non-profits may see an increase in demand for their services (especially those working with vulnerable communities). Other groups might see a downturn in participation, as people's priorities shift due to changes in personal situations - financial or otherwise. (The same may be true for personal donations.) Then again, people may volunteer and give more during these hard times to help those in distress - this is the beneficial action we need as a country to help get us through the bad times. For those who lose paid jobs, volunteering will offer an opportunity to keep connected with their communities and maintain their skills or learn new ones, while also making an important contribution.
Adversity could lead to positive outcomes as communities band together, and agencies co-operate and collaborate more or actively share resources to get more 'bang for their buck'. Those individuals, businesses and corporate supporters who can't afford to give money, may offer time or other resources in order to continue to support services and causes they believe in.
In an effort to identify what may happen in New Zealand, and what can be done to lessen any negative impacts (and maximise positive ones), Philanthropy NZ, the NZ Federation of Voluntary Welfare organisations and the Office for the Community and Voluntary Sector (OCVS) have invited a selection of community and voluntary sector representatives, and the government agencies working with them, to attend an Impact on Communities: Managing the Downturn Together workshop in Wellington on 25 February.
The workshop aims to build a greater understanding around what is happening with the credit crunch and economic downturn; discuss the impacts for non-profit organisations from a social and economic perspective; and develop strategies to manage finite resources.
This event will be similar to one held by the Association of Charitable Foundations in the UK in late 2008.
The OCVS will post reports after the event on our website, to keep the sector informed of activity.
For links to further articles about the economic downturn's impact on the community sector, go to the OCVS's February newsletter: www.ocvs.govt.nz/publications/newsletter/index.html