May 18, 2020

How is the charity sector faring amid COVID-19 pressures?

Author:
Aniko Lakezi, Consultant
A high proportion of charities reported having board level discussions around rethinking their delivery models and greater use of technology

The coronavirus crisis is creating a multitude of challenges for charities


Charities are awarded public sector contracts across a wide range of areas that support their vision and mission. These can include anything from adult education and food programmes, to support for older, disabled people and health services.

In State of the Sector, a Savanta ComRes research piece for NPC published today, we found that 54% of charities in the UK deliver public sector contracts, an increase from 48% in 2017. Of the charities that do, 59% said these were subsidised by the charities with other income, such as money from fundraising.

With most charities facing growing financial pressures during the COVID-19 crisis, cross-subsidy of contracts is expected to become very challenging for charities, which could risk leaving considerable gaps in the delivery of important services.

The Government has promised £750m in additional funding, specifically for frontline services, but the details as to how this will be distributed and ringfenced are not yet clear. This sits uncomfortably  alongside the NCVO estimate of a £4bn fall in charity income during the Covid-19 pandemic.

How can charities respond?

Adjusting operational strategies to meet the changing demands and circumstances of the COVID-19 situation could be a way forward for many charities. However, our research (which took place before the pandemic) suggested that some charities may lack the preparedness and flexibility to quickly adapt to this new situation. This could be due to the reported lack of strategic discussions in the first place, with our research indicating that charities have become slightly less likely to have board-level discussions on their strategy than in 2017 (54% in 2019).

However, more positively a high proportion of charities have reported having board level discussions around rethinking their delivery models (69%) and a greater use of digital technology (70%).

Many charities have in fact been quick to respond in this way. This has often meant moving services online where possible or capitalising on heightened community spirit during the crisis. The Scouts, introduced their ‘The Great Indoors’ initiative, helping children and young people learn and improve useful transferable skills from their own homes using social media channels. With foodbanks experiencing record demands during the COVID-19 crisis, we have seen numerous supermarkets and community initiatives within the country stepping up and providing help for those in need.

Responding to the growing demand, The Salvation Army expanded its food bank services by transforming local community hubs in order to increase their ability to accept donations and using their local networks to reach those most in need.

There are opportunities for charities post-pandemic

Additionally, we have seen a notable increase in public trust in the sector during the pandemic, which could aid fundraising efforts as well as an increase in the level of public engagement in voluntary or community activities, particularly among younger adults. From our survey on behalf of Christian Aid, we have seen that 24% of British adults aged 18-24 say they plan to more frequently give to charity, volunteer or take part in community activities than they used to once the lockdown is lifted.

It is clear that charities will now have to compete for income from the public, funders, and philanthropists in an increasingly competitive fundraising environment. However, it will be interesting to see the manner and extent to which, across the sector, charities are able to successfully and creatively continue to respond to the current challenges.

Learn more or get in touch to find out more about our charity research.


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