More government investment is needed in the third sector as donations fall and uncertainty looms about how the corporate income tax will affect business giving, the leader of an umbrella body said.

Nicola Paugh, the executive director of the Non-Profit Alliance of Bermuda, spoke to The Royal Gazette about the charity sector’s financial needs ahead of tomorrow’s Budget.

Dr Paugh said that economic pressures were already making the work of non-profit organisations harder and more expensive, with the challenge compounded by uncertainty around how the CIT would affect corporate donations.

Meanwhile, Kelly Hunt, of the Coalition for the Protection of Children, said government funding was crucial for supporting children in the education setting, including for employing and attracting more trained therapists, social workers and counsellors.

Ms Hunt, the charity’s executive director, cited troubling statistics — including rates of child suicide reported by the Centres for Disease Control and Prevention as well as high levels of neurodiversity — that call for better supports for young people.

In November, the Tax Credit Act was tabled in the House of Assembly to bring about “substance-based tax credits”, including for commitments to community benefit. Corporate groups that donate at least $300,000 to Bermuda charities over three years qualify.

Dr Paugh said: “While the CIT tax credits are intended to incentivise greater philanthropy, it remains unclear whether this will offset potential reductions in giving from companies now subject to the tax.

“The overall impact is still uncertain.”

According to the Non-Profit Alliance’s 2025 member survey, 48 per cent of non-profits reported missing their fundraising targets in the last fiscal year.

Dr Paugh added: “We are also seeing a notable decline in both individual and corporate giving as a percentage of total revenues compared to 2020 data collected by Wavecrest Philanthropy.

“Our analysis shows that corporate giving declined from 31 per cent of non-profit revenues in 2020 to 20 per cent in 2025.

“Individual giving fell even more sharply, from 19 per cent to just 6 per cent of total revenues.

“This trend is particularly troubling given that individual giving is typically the leading source of charitable donations globally.

“Meanwhile, government grants have remained static at 7 per cent of total revenues in both 2020 and 2025.”

Dr Paugh said that as the Government began to benefit from increased tax revenues and had greater capacity to reduce debt-servicing costs, it must also consider increased investment in Bermuda’s charitable sector.

She added: “Non-profits are absorbing growing demand and rising costs. Sustained underinvestment will ultimately impact the community services that Bermudians rely on.

“We therefore hope to see prudent fiscal decisions that ultimately will allow greater social investment in the long run.”

Ms Hunt said that investment was needed in the Budget to make sure that children were growing up in a safe, nurturing environment with equal access to opportunities.

She said: “Without enough assistance from government, the sustainability of the life we know in Bermuda is in clear and present danger.

“This year, we would like to see spending on education.”

Ms Hunt expressed hope that the Ministry of Education would receive funding for trained therapists in schools.

She said: “This adds critical support for students who are neurodivergent and need speech therapy among other needs, as well as support for students requiring academic coaching for executive functioning skills, time management and motivation.”

She pointed out that there must be a focus on the culture and climate of education by using a “trauma-informed school” approach, employing social workers to work with counsellors in schools.

Ms Hunt said: “We are appealing to the Ministry of Education to strengthen the safety net for young people by adding the benefit of consistent prevention and intervention with the implementation of school social workers in the system.

“Alongside counsellors, school social workers are often called on to help students, families and teachers address problems such as truancy, social withdrawal, aggressive behaviours, rebelliousness, and the effects of special, physical, emotional or economic problems — all of which we are seeing increase here in Bermuda.

“We are appealing to the Government to provide incentives and subsidies for Bermudians who wish to enter these fields as the human resources for these professions remain insufficient and an increasing number of young people are falling through the cracks due to a lack of support.”

Ms Hunt said that in addition to assessment, screening and intervention, school social workers helped pupils to maximise their academic potential.

She noted that the need for these types of therapeutic services were “increasingly clear” owing to a significant portion of neurodevelopment disorders seen by the age of 12, as reported by the US-based National Institutes of Health.

She said the CDC, a US agency, reported that suicide was a leading cause of death among people aged 10 to 18.

Ms Hunt added: “In Bermuda, approximately 200 cases of child sexual abuse are reported each year.

“Witnessing domestic violence is the most reported form of abuse in Bermuda.”