This research program is the first time organisations (of all sizes), such as charities, philanthropic organisations, and for-profit industry with a social purpose, will be tracked over time in regards to changes in operating conditions, demand for services, and funding or grant making strategies.

This Wave 2 report outlines how operating conditions continue to be a significant source of strain across the sector this year. In 2020, 74% of organisations reported that the operating environment for the not-for-profit sector had worsened over the preceding year. In 2021, just under half (43%) of organisations that work in community or social services felt the operating conditions had worsened yet again over the last six months (between December 2020 and July 2021).

Key findings:

• Operating conditions continue to be a source of strain. 2020 was a profoundly hard year for the sector – 74% of organisations reported that the operating environment for the not-for-profit sector had worsened over the preceding year (prior to the bushfires and pandemic).
• Service demand continues to outpace provision capability. Across Wave 1 and 2, the Pulse survey found that approximately 80% of service providers were receiving requests for support they could not meet, with 15% experiencing a large or very large number of unmet services for their clients or communities.
• Qualitative results suggest that areas particularly struggling with unmet need are service organisations, who are now responding to increasingly complex or cohort specific needs, particularly in housing, financial distress, and the needs of women and children.
• After 18 months of ‘living with COVID’, organisations may have become more agile in responding to lockdowns and physical distancing requirements. However, uncertainties in revenue, combined with new and increased demands for how organisations operate in a pandemic, are likely to further contribute to an overwhelmed and overworked sector. Both Waves 1 and 2 found similarly that stimulus measures provided only a temporary fix to the financial stresses that face the sector.