As of 3.11pm CET, 27 October 2020 there have been 43,341,451 confirmed cases of COVID-19 including 1,157,509 deaths reported to the World Health Organisation.[i]
The COVID-19 pandemic has delivered an enormous global shock, leading to steep recessions in many countries. The baseline forecast envisions a 5.2 percent contraction in global GDP in 2020 which would be the deepest global recession in decades. It is expected that per capita incomes in most emerging and developing economies will shrink this year.[ii]
The Bahamas is not immune to this economic shock. For example, according to a Central Bank of The Bahamas Monthly Economic and Financial Developments Report, August 2020, visitor arrivals for January – July 2020 to New Providence, Grand Bahama and the Family Islands decreased 66.3%, 73.7% and 50.8 % respectively. These figures are staggering when you consider the heavy reliance The Bahamas’s economy has on tourism expenditure. In fact, the massive contraction of taxable economic activities in The Bahamas resulted in $349 million (15.9%) decrease in tax receipts during the said period.
Economic contractions like this have impacted the financial health of charities globally. For example, according to a survey carried out by the Chartered Institute of Fundraising, Charity Finance Group and NCVO, and published by PwC, charities in the United Kingdom face £12.4 billion shortfall in income for the year due to the impact of the COVID-19 virus.[iii]
The report indicated that when looking at the year ahead, charities:
- Expect to see their total income significantly reduced, with their total income on average 24% lower than previously forecasted;
- Are planning on an average fall of 57% on trading income; and
- Have raised their voluntary income for the year down by an average 42%
In total, 91% of the charities that responded to the survey are forecasting a drop in their budgeted income with 56% believing it will decrease and 35% expected a significant decrease.
The cause and nature of this economic contraction not only negatively impacts funding sources of NPOs but simultaneously increases the demand for many of their services. This is especially true for organisations providing humanitarian services. As a resulted of this reality, many NPOs are finding themselves “between a rock and a hard place”. So what can NPOs do?
Although NPOs may have to scale back their services, this is a good time for NPOs like yours to look for suitable opportunities to collaborate and partner with other organisations. Just like many people, organisations need additional help to deliver projects and will likely welcome offers to collaborate or partner. So if you have not started as yet then please approach them, including your national and local governments. If we are honest with ourselves, and I believe we are, we will admit that we all need each other. So reach out and pursue those opportunities to collaborate.
Please feel free to direct any questions or comments to Kean Smith at kean@smithkas.com
[i] WHO Coronavirus Disease (COVID-19) Dashboard. 2020. Available at: https://covid19.who.int/ [Accessed: 27 October 2020].
[ii] Global Economic Prospects. 2020. Available at: https://www.worldbank.org/en/publication/global-economic-prospects#:~:text=Global%20Outlook,-COVID%2D19%20has&text=The%20baseline%20forecast%20envisions%20a,economies%20will%20shrink%20this%20year. [Accessed: 25 October 2020].
[iii] Charities face £12.4bn shortfall in income for year. 2020. Available at: https://fundraising.co.uk/2020/06/19/charities-face-12-4bn-shortfall-in-income-for-year/ [Accessed: 28 October 2020].
