Charities and CICs: What does the future hold?
In this special one-off webinar, a panel of experts working in the sector talked through the challenges of operating during the pandemic and their strategies for survival.
The current situation – where we are now
Overall, the charity sector has been dealt a big body blow by the pandemic. The Institute of Fundraising says that UK charities are expecting a 24% decrease in income this year – that’s around a £12.4 billion loss.
The Small Charities Coalition says that only around 1 in 5 charities are expected to be able to provide a regular service, and 1 in 10 are likely to have to make redundancies. Meanwhile, 45% of charities working overseas will need to close without additional funding and 59% are having to access their reserves.
On the positive side, people in communities need charities and CICs more than they ever did before. Some of the huge fundraising activities as a result of COVID-19 suggests that there is a limitless generosity for giving from the UK people.
The view of the charities legal specialist
Cecile Gillard is a legal manager with Burton Sweet’sCharities and Civil Society. She says there are big challenges for charities and CICs, particularly around the areas of funding, financial management, risk and service delivery.
In terms of funding, Cecile says there are significant shortfalls across the sector and real challenges in raising funds. Many fundraising activities are likely to need to be done in a different way for some time to come.
There’s an increasing emphasis from the Charities Commission in ensuring charities are meeting the public’s expectations, whatever their shape and size. There is a suggestion that there should be greater transparency and accountability in addressing these expectations.
In terms of survival strategies, Cecile has a few tips:
- Succession planning is important. Charities need to ensure they are able to recruit new trustees during these difficult times
- Making sure they’re in regular conversation with professional advisers, to make sure they’re getting the best advice
- Maintaining relationships with existing funders and donors – talking to them particularly if there’s a need to look at changes of use of funding
- A new and open dialogue with supporters so that they can understand if and why a charity is making changes, and what they can do to help
- Mixed format fundraising activities – moving away from the initial phase a few months ago of all online activity to a mix of online and in real life activities
- Doing activities differently – for example, amass sleep out for homelessness charities now being done in smaller groups such as in workplaces or support bubbles
- Mutual support initiatives – where charities with a shared level of interest are working together
- Looking at your charity’s constitution – boards should look at where there are flexibilities and an opportunity to change
- Looking at structures and whether there is any flexibility here
- Fraud and cyber-crime is also something to look at – the estimated fraud losses to the charity sector each year pre-Covid were £1.9bn
- Reviewing insurance terms – if necessary, adjusting them
There is some cause for optimism, says Cecile. A new report by Danny Kruger MP, ‘Levelling up our Communities – Proposals for a new social covenant’ makes recommendations on a new approach to public policy, social action and our faith communities. These include things like a new national volunteer reserve, a volunteer passport to help people move between voluntary roles, initiatives to help under-employed young people volunteer in community and environmental work, some new funding sources drawn from dormant insurance accounts and a suggestion that the National Lottery Communities Fund might be refocused on communities rather than causes.
The view of UK charities community mapping founder
Jaki King is the founder of If Everyone Cares CIC, which is working to create both a UK-wide map and a network of ‘connected’ area-based community maps on a mapping platform.
Jaki says there are over 150,000 registered charities in theUK and an unknown number of community groups and projects – but there is nothing to bring that community together.
A report was done by the Eden Project ‘s communities nearly4 year ago which said that disconnected communities were costing the country£32 billion a year. Jaki makes the point that if there was a more joined up UK charity community, there’s a lot of good that could be done with that money to make a difference.
Jaki’s new platform, aDoddle, aims to do this by providing a free mini website for charities and organisations. The platform then brings organisations together in communities, to ensure they know what’s going on around them and can collaborate. So far, over 1,300 charities and CICs have signed up to it.
From working with such a large number of charities over the last few months, Jaki has seen that smaller charities in particular have found themselves with a double-edged sword around the furlough scheme. The issue being that if they have a small or maybe even just one paid member of staff that they wanted to furlough in order to reduce costs, there would then be no-one there to manage the volunteers still willing to help and also potentially no-one to put in funding applications.
She too recommends the Danny Kruger ‘Levelling Up’ report, saying the content is vital to how the sector will need to move forwards. It’s a long read at over 70 pages, but very worthwhile.
She also suggests Brevio, which is a new organisation trying to put all the funding opportunities in one place alongside charities, so that funders can find the right charity for them. Whilst it it in its early stages, Jaki believes this could be game changing for the sector and one to watch.
The view of a UK charity operating overseas
Alan Sweetman is the executive director of Pahar Trust Nepal(PTN), a long-established charity based in the UK and Isle of Man but operating in Nepal. It builds or refurbishes school buildings, health and sanitation facilities and has delivered over 250 projects since 1991.
PTN has just one paid member of staff in the UK, which isAlan, and an active board of trustees. They have raised over £4.2m since they were established, mostly from individual or group donations rather than grant funding.
In terms of their experience of the pandemic and how they’ve responded, Alan says it’s important to note that the UK is still in a developing situation with it, and in Nepal they haven’t even reached the peak of infections. So, they have responded to what they know.
Nepal went into lockdown in March, around the same time as the UK. This meant that the constructions projects underway were paused. PTN took the decision to keep contractors on site and cover their subsistence costs– they often have travelled away from home to work on the projects.
Alan echoes Jaki’s comments about the challenges of accessing the UK’s furlough scheme. As a sole paid member of staff, he wasn’t able to furlough, so they didn’t benefit from any of it. However, on the positive side, he says the benefit of being a small charity is that they have low overheads.
Another challenge for PTN has been that the team haven’t been able to travel to Nepal or take potential funders over there to visit possible construction projects. They have also lost some of their usual fundraising sources from events like RideLondon and the London Marathon not taking place.
So how have they responded?
- Firstly, maintaining their focus on their construction projects rather than shifting their activity to responding directly to COVID-19. The charity took the decision that by continuing with their core activity, they were creating job opportunities in Nepal at a time when so many people there are losing their jobs.
- They also took an early decision to invest in their communications and marketing, in order to build on their position and look forwards to 2021/22. This is the first time that the charity has had a dedicated marketing operation.
- Monthly re-forecasting as they’ve seen projects postponed. They have had to downgrade their forecast of major capital projects for the year by about 50%. This has required a commitment to utilise reserves to cover the reduction in overhead contribution from these projects.
They are also adapting the way they work for the future. This includes developing their first ever year-long campaign that will run during 2021. Called ’30 for 30’, this will aim to raise £50,000 to refurbish or build pre-primary school classrooms. These projects are lower cost than PTN’s typical building projects, which means that people may feel more inclined to donate if they can see the impact a smaller donation is going to make. They hope this campaign will enable them to reach a much wider audience.
With the downtime they’ve had where projects have been delayed, Alan says they have also had time to look at their strategy, reflecting on what they do well and seeing where they can diversify their approach in order to broaden funding opportunities.
Finally, they have also been looking for opportunities to collaborate with other charities and NGOs in Nepal, who can bring increased outcomes and impacts to the projects they are delivering, as well as offering their support to other organisations.
You can watch the full webinar here
To find out more or get in touch with the panellists: