When we’re talking about adaptability in the charity sector, our first thought is naturally of the COVID-19 pandemic, an era-defining event, and the cause of unprecedented change for almost every organization.
While acknowledging that the voluntary sector has adapted incredibly well to the challenges it’s faced in the last two years, I think it’s only sensible to note that the period of change is just beginning. The challenges charities face now and in the next few years will, in many ways, exceed the ones it has overcome. Adopting adaptability as a mindset will remain crucial.
Financial pressures remain the key cause for concern
The full financial impact of the pandemic is yet to be worked through and it may leave a permanent scar. However, there is positive news in that many more charities survived the pandemic than was originally predicted. The mass closures that some expected in 2020 and 2021 didn’t happen.
This is primarily because of the wealth of support that was available. NCVO did a lot of campaigning on the need for more funding, and that was a huge success, securing a £750 million package of support. We also encouraged charities to access their reserves if they needed to. Funders, including the National Lottery, brought forward money. And the furlough scheme was also helpful, allowing charities to keep on staff.
This year could be much harder. There’s no longer emergency funding available, and many organisations have spent most of their reserves, which take a very long time to rebuild. Plus, the economic outlook is going to be very challenging.
A slow economy has a triple impact on charities. Firstly, whenever times are tough, there's more demand for charity services. Secondly, there is typically a drop in donations, as giving to charity is an easy thing to cut from your household budget. And, thirdly, organisational costs are increased, just as household costs are. So, charities need to achieve more with a lot less.
Adaptations to the new financial environment
One of the ways charities can adapt is by taking a more creative approach to philanthropy. The traditional sources of funding, from trusts and foundations to local government, are all in decline. There’s a need to get more money into the system and be more inventive.
Digital fundraising innovations can certainly help. Since the pandemic, fundraising and cashless giving have become the norm. If charities can fully embrace this trend and harness it, they can hugely broaden the audience of charity funders. For any organisation that has been holding off on investing in digital, the time is now.
Another potential source of relief is the Dormant Assets Bill that is currently going through parliament. The bill will release £880 million to benefit youth activities, community projects, and other good causes. This is just one of the government initiatives that could benefit the charity sector.
Though fraught, the political landscape is full of opportunities
The relationship between the voluntary sector and the government has been severely tested during the pandemic. We’ve seen various examples of “culture wars”, where politicians attack individual charities or the whole sector to score points or gain an advantage, such as cases with the National Trust of the RNLI.
This has perhaps added to the scepticism with which charities view opportunities presented by the government. Nevertheless, there are opportunities for charities to seek additional funding, both at a national level through the Levelling Up initiative, and at a local level, through integrated care systems.
Charities can also be looking to take advantage of the current uncertainty in the political environment. We're still not expecting an election before 2023, but the outcome of that election is far less clear-cut than it might have been a year ago. So, there’s a real opportunity for charities in terms of campaigning and getting into manifestos. Forward-thinking organisations are starting to strategise for that now.
Confronting the social issues which have been in the shadows
As we move out of the crisis stage of the pandemic, there are a couple of other social issues that are only going to grow in prominence. The Black Lives Matter movement has shone a light on inequality in society and the voluntary sector, like all sectors, will need to reckon with this and become more diverse and inclusive.
Plus, charitable organisations are going to need to focus much more on their net-zero ambitions. This isn’t just an issue for environmental charities anymore, there’s a realisation that every organisation needs to address its carbon emissions and adapt to a net-zero economy.
At the same time, charities are having to tackle the decline in volunteering caused by lockdowns and shielding requirements. Though lockdowns are no longer an issue, this doesn’t mean it will be easy to fix as, once people step away from their charity commitments, it’s very hard to get them back.
Innovation in the digital space can help to tackle all these issues, to a degree. The trends towards digital volunteering, distance volunteering, and micro-volunteering are going to grow and grow. Instead of accepting support only from those who can commit to frequent and consistent hours, charities are going to have to unlock the barriers to volunteering and make it easy for anyone to pitch in with whatever time they have available.
It's great to see volunteers being mobilised through apps, where they can simply sign on to say they are free, then take a task and check it off. for a task and then to take the task and check the task off and sign. It feels very new and different, and very much in line with the future.
We’ve established the foundations of adaptability, now it’s time to build on them
This array of challenges may seem overwhelming but the ability and willingness to adapt shown by charitable organisations in the last two years make me optimistic.
As always, NCVO will be there to support, connect, and amplify. For charities of all sizes, we offer practical content, training, and bespoke consultancy. We build a community for like-minded people to learn and share knowledge. And we champion charities and volunteering. We will continue to speak up on their behalf and campaign for funding that the sector needs.
If you’re interested in exploring innovation and transformation in the charity sector, I spoke about the topics mentioned above and more at Investec’s Charities Webinar: The Art of Adaptation on 16 March. You can watch the webinar now to learn more about challenges and opportunities in the voluntary sector.