The Challenge of Sustainability: Queensland's Not-for-profit Sector and the Impact of Growing Financial Pressure

Abstract

Our analysis of the financial data of selected Queensland not-for-profit organisations for the financial years 2019, 2020 and 2021 show that Queensland’s not-for-profit sector is likely suffering from significant financial pressure. This pressure is a result of increasing costs of inputs - 19% of total cost increases - in the context of an economic and funding framework that places considerable pressure on service supply and, therefore, on income.

Indeed, many not-for-profit social services organisations are challenged in terms of sustainability by what might be termed a malevolent cycle, where poor job quality impacts staffing, in turn impacting service capacity, thereby reducing income while, at the same time, infrastructure and other elements must continue to be paid for.

Any increase in costs without a commensurate increase in income will place the sector under considerably more financial strain at times when its profitability is already compromised - for instance, in 2021 we reported that 43% of Queensland’s human services charities returned a profit of less than Health CPI while 37% made a loss.

Keywords: Human Services, Not-for-profits, Charities, Social Services

JEL Classification: I11, I18, I38, H42