The Bank of England now expects the UK to fall into recession, a fact probably clear to many over the recent turbulent months. Whilst this is ultimately going to affect the pound in people’s pocket, it will also have implications for the charity sector as public donations dwindle in the face of an economic onslaught. If we expect Trusts and Foundations to fill a gap we might be sadly mistaken. All the evidence there suggests that External Funders will look to reduce the amount they give as they too have a bottom line to manage.
Inflationary pressures are on the increase, with national surveys demonstrating that charities were and are dealing with increased costs and more demand. Like a proverbial perfect storm, local authorities will also face a period of further retrenchment and rebalancing, meaning the charities reliant on public service contracts or grants might be in for a torrid time. Charities could be bidding for substantially less money than previously or be expected to deliver more on non-inflationary extended contracts.
And all of this means that charities are running out of rope in meeting demand: The NAVCA Barometer Survey showed quite clearly that demand in some places is overwhelming charities, with many having to use Reserves to meet their core costs. Hardly a recipe for longevity or sustainability.
These factors are accompanied by a staffing crisis. Evidently, 36% of charities struggle to recruit staff, with many smaller charities now reliant upon part time or seasonal posts geared to short term contracts.
The Charitable Aid Foundation (CAF) noted that nearly 5 million individuals chose not to make a one-off donation in September of 2022, a portent for the months ahead. Data on individual giving in November of 2022 demonstrated clearly that the post COVID recovery has not materialised, with 4 million people now no longer donating to UK charities. Whilst older people are more likely to give regularly to charities, the case can not be said for younger people, and for many charities finding a USP that unlocks the potential of young people, who themselves have fewer pounds in their pocket, will be challenging. Charities should also remember that whilst a direct debit in regular giving is assured income, inflationary pressures erode that donation, meaning a £20.00 monthly donation now could be worth only £14.00 or less by 2024.
One issue is clear though state CAF: Digital Platforms are now crucial to engagement and participation. This might be all well and good for larger charities with the income to invest in such platforms, but for smaller more local charities this could be a cost too far. Understanding your demographic and your potential beneficiaries or supporters is vital, and however its done, charities should look to engage in this exercise of active mapping, even if its with partners of similar specialisms.
And then there is the constant need to mobilise volunteers. Even though the nature of the act is changing, surveys still show that people are ready and committed to volunteering in all its forms. I am unclear though as to whether the sector has an offer that cuts across all of the volunteering pathways that are there to be had.
As CAF state:
Charities might have to ask themselves if they need to adjust their volunteering offering to respond to what appears to be a growing ‘participation premium’ – that is, people wanting to feel that they are actively doing something to cause change, instead of ‘just’ giving money. In normal times, events and other activities that could be done collectively would be suitable options. But charities might find themselves competing for people’s time with other activities that are now possible after months of lockdown.
So, against this backcloth what can charities do?
I would suggest a sound business plan which clearly meets the needs and aspirations of your potential beneficiary base. Don’t assume you know what they need. Go and ask them. A small focus group is better than nothing at all. Don’t guess based on experience. The world has changed exponentially in the last few years.
Set your sights on reasonable fundraising programmes relative to the size of your organisation and its resource. Understand what fundraising routes suit your organisation, providing the right balance of short-term Return on investment against risk. VIN run courses on fundraising, and you can find out more by contacting info@voluntaryimpact.org.uk. We can also deliver bespoke sessions for your staff and trustees, at a time and place convenient to you. If you are going to embark on a fundraising journey, the trustees need to be with you every step of the way.
Work in partnership with others. Discard past poor relationships and seek to renew. VIN is always looking for active partners against which it can wrap an Infrastructure offer. If you have some ideas contact russell.rolph@voluntaryimpact.org.uk
Think about the concept of Offer and Acceptance. Intuit the new landscape in which you work and alter past programmes to suit a new world. The local authority mantra is now payment by results: Ensure you can demonstrate your outputs against any specification you bid for.
Target volunteers for fundraising and your services. Have a multi-faceted offer that appeals to the many and not the few.
