If there was a single adjective to describe the not-for-profit sector in the UK, that word is ‘resilience’. From balancing the increased demands for services whilst facing limited funding and a depletion of resources, to higher than average staff attrition rates and proposed regulatory changes to name but a few, the not-for-profit sector has overcome obstacles since time immemorial. 

But while these challenges still need to be met, the Coronavirus pandemic will only exacerbate this. It’s impact on the sector cannot be understated, and while funding will relieve the pressure that many of the UK’s charities are facing, the effect is more of a Band-Aid rather than a sustainable solution over the longer term.

A perfect storm

One of the earliest surveys conducted into the impact that COVID-19 was having on the charity sector, revealed that 43 per cent of charities anticipated a rise in demand for their services. But, according to the The Institute of Fundraising survey, charities will on average expect a “decrease in total incomes of 31 per cent against their total income from the previous year.”

This is likely to be compounded even further after the lifting of the furlough scheme which, according to a study by the National Institute of Economic and Social Research, could see the UK unemployment rate rise from 1 million to 6 million – a jobless rate of 20 per cent. Against this backdrop, it is hard to see how charities can continue to play the vital role they have in supporting society’s most vulnerable people. Yet, this is what is being demanded of them.

Overcoming reputational damage

Over 2018/19, the world was shocked by the Oxfam sexual misconduct scandal and it made the public sit up and think about whether charities are to be trusted, do their actions reflect their words?

A survey completed by the Charities Aid Foundation found that, over this period, 59 per cent of charity leaders said that they had been badly impacted by the scandals, with less than half of respondents believing that charities are trustworthy.

A speech made by the chair of the Charity Commission Council in 2019 still resonates today; charities are essential, no matter which way we look at them, they provide “essential, life changing services” to some of our most vulnerable people but, to rise from the ashes of misconduct, the sector must prove itself. All charities, big or small, must now be the “living, breathing examples of charitable spirit, of charitable endeavour.”

Increased competition

With 5,000 new charities being registered a year, there is concern amongst all those in the Third Sector about how, with the amount of funding rapidly decreasing, they will manage to stay afloat.

For many, this change has meant having to take a more quick-fire, short term approach to how they fundraise, which may potentially lead to their demise. Those who are going to be successful this year will be those who keep in mind the need for long-term connections and relationships with their funders over quick money-making initiatives.

As stated by Baroness Stowell, Chair of the Charity Commission; “There is evidence of a growing gap between public expectations of charity, of what charity is and means on the one hand, and the attitude and behaviour the public see in some charities as institutions on the other.” In order to prosper, attitude, actions and messages all must add up to the same number, otherwise discrepancies will lead to further mistrust.

Brexit paralysis

Since the beginning of the Brexit process, the Third Sector has been creating contingency plans on how to cope with the changes this will bring. For many, the biggest worry is the outcome of a No Deal – a decision that will impact thousands of employees who can no longer work under a ‘settled status’ as well as a huge drop in funding of around £258m per year.

Now, added into the mix is COVID-19. The unknown continues to loom, as a country we are now unaware of when we can recover economically from the virus and whether this means Brexit will happen or be delayed further.

This year, charities will need to forward plan more so than ever; despite 91% of respondents in SVCOs Third Sector forecast in 2019 stating that they feel that planning for the future is challenging, many will need to lay out contingency plans on how to manage whether Brexit happens or not in 2020.

Moving forward

Despite the many seemingly unrelenting challenges 2020 is looking to bring to the Third Sector, there are a multitude of ways in which the sector can diversify and change in order to help itself and its users, even just a little.

From alternative payment options such as contactless machines, Apple Pay and PayPal, implemented by charities such as the Big Issue which now takes card payment, and mobile apps and social media to increase engagement and promote transparency. These kinds of technologies will allow users to see exactly where their money is going and how their efforts are helping; a problem the industry has struggled to resolve for a long time. 

Last year, only 25% of those in the charity sector thought that their organisation was well-equipped for scoping out future working practices, including the inability to keep up with the rapidly evolving technological world. However, the need has never been greater for the Third Sector to take the plunge and deep dive into these new wonders that will not only expand and grow their offerings but, also encourage a new wave of givers and fundraisers.