Will we ever be post-COVID?

What if COVID-19 is here to stay and there is no going back to “normal”? Three Community Trust leaders – Jonathan Bell, Christine Korako MInstD and Caren Rangi MInstD – considered the possibility as part of an Institute of Directors panel discussion on the challenges faced by trusts and the NFP sector. The full discussion is available as a webcast.

One of the most immediate impacts on the NFP sector was the abrupt reduction in income, says Bell, general manager of the Eastern and Central Community Trust.

“The organisations we deal with suddenly had all their funding lines reduced or cut. They weren’t able to hold events to raise funds or undertake their normal work, their normal mahi,” he says.

Christine Korako, chair of the Rata Foundation, also noted that cash was suddenly even more scarce. “The NFP sector is being affected by event cancellations, donors tightening their belts and reduced cohesion in the community,” Korako says.

“The challenges have certainly escalated. Many charities do not carry significant reserves so they don’t necessarily have a lot to fall back on.”

A further troubling aspect of the pandemic is that it appears to have a greater negative effect in the communities that have traditionally been reliant on support from NFP organisations, Korako says.

“Inequality has been highlighted. When we look at COVID-19, it is certainly having a disproportionate impact across the vulnerable parts of our community, particularly for Māori, our youth and our elderly. Certainly for those who are poor, it has impacted far more.”

People before processes

The response at a Community Trust level was initially driven by a need to look after their own people.

“It’s always about people. It’s about our staff at Rata and ensuring that their wellbeing is at the forefront of everything we do. Ensuring we have in place resources to support them and to continue to monitor their wellbeing… working from home and the challenges that imposes,” Korako says.

But very quickly, the Trusts began working closely with the NFP sector to find ways to help organisations survive. That has meant increased communication as NFPs identify their own particular challenges and solutions.

“Our go-to was that ‘we are here for the long haul’ so that the sector would understand - we are here for them,” Korako says.

“We haven’t changed our funding at all and we haven’t set up a special fund, as we did after the [Christchurch] earthquake. We are seeing if and when that might be required. We are not prescriptive as to what the sector needs.”

Caren Rangi, deputy chair of the Eastern and Central Community Trust, says Trusts are now looking closely at their own assumptions as they seek to meet the new needs in their communities head on.

“That means testing whether or not your strategic priorities are still relevant – and how do you know they are relevant?,” Rangi says

“This really is the time to engage more with the communities that you are serving to understand the impact of COVID-19 on them.”

Sustainable approach

Rangi notes that Community Trusts are required to operate in perpetuity, so their strategies must balance serving the current generation with responsibility to future generations.

Bell says the Eastern and Central Community Trust was confident its grassroots funding would be able to fill some of the gaps created by the pandemic. However, the organisation also sought the return of grants for events that were not going ahead.

“We have seen some positives ,” Bell says. “We saw people on the wage subsidy volunteering. Lockdown brought families together.”

Korako adds that Rata has observed a much higher level of collaboration across the NFP sector since COVID-19 emerged.

But the decrease in funding – combined with ongoing uncertainty around the future effects of the pandemic – means many NFPs are operating in a “crisis limbo”, Rangi says.

“That’s because of the uncertainty that lies ahead for all of us,” she says. “The crisis tested the strength of the relationship between boards and management. It particularly tested how well boards understand and trust management to do the right thing in an environment, where for some of the impact of COVID-19, there is no right answer.”

“We are going to listen to our communities because they know what they need,” says Bell. “We will develop an action plan for the COVID-19 world - I don’t think there is such a thing as a post-COVID-19 world.”

But Bell is worried that, even before COVID-19, there were some NFPs that were really struggling.

“Those organisations will face significant challenges now. In this new environment, those boards are going to have to sit down and ask some really hard questions. Some of those questions, they may not even know how to ask.”

What is a community trust?

New Zealand’s Community Trusts emerged from the savings banks that flourished during the late 19th and early 20th centuries.

After corporatisation in the 1980s, former trustee savings banks were transferred into the ownership of 12 Community Trusts. By 1996, most had sold their bank shareholdings to Westpac but continued to operate as investment agencies that provide community grants.

They are governed by boards of trustees appointed by the Minister of Finance.

Today, the 12 Community Trusts hold a combined approximately $3.9 billion in assets and make grants of more than $100 million each year.