Brexit, public perception and the difficulties of raising money are front-of-mind for many charities in these uncertain times
Charities are a vital part of the fabric of our societies. In a recent survey, 75% of respondents answered that demands for their services were rising sharply. 78% of those charities predicted further increases in demand over the years to come. Charities have an in-depth understanding of the communities and individuals they help, and it seems their services are more needed than ever before.
That said, just 18% of charitable organisations state that they have the resources and tools to meet this demand: charities in the UK and Ireland are operating on an uncertain playing field. Amidst the uncertainty of Brexit, GDPR restrictions on marketing, increased competition for grants, a loss of confidence from the general public and the need to innovate, charities in the UK and Ireland are facing a number of obstacles.
It may be an uncertain future, but it’s by no means lost. We’ll take a look at the three principal issues facing charities today, and how they can be tackled, so charities can keep serving the communities that need them.
The Brexit Effect
Ever since the Brexit referendum in 2016, many within the charity sector have predicted wide-reaching long-term impacts for charities in the UK and Ireland. Though the terms of the UK’s withdrawal remain uncertain, some anticipate they will lose EU funding streams, or staff from the EU. Others stand to lose funding from public services due to policy shifts. Simultaneously, with political attention firmly fixed on the Brexit crisis, campaigning on local issues outside of this realm will be more difficult, as will ensuring local charities’ issues are on councillors and MPs’ agendas. Indeed, when recently surveyed, just 2% of charities answered that Brexit will have a positive impact on their organisation. In the face of such a precarious landscape, charities might consider exploring new income streams like taking advantage of key assets such as property. We’d recommend putting together a contingency framework to help you cope with worst-case scenarios. In addition, charities might also think about collaborating with organisations that share your values to strengthen your capabilities to meet demand post-Brexit.
There's no doubt that the Oxfam Haiti allegations have rocked the sector - according to recent findings, 6 out of 10 charity leaders believe that trust in their sector has been adversely impacted by negative media stories. Another report suggested that public confidence in charities had dropped to its lowest point since 2006. However, it’s not all bad news, studies show that general public trust in small-to-medium-sized charities and local services has not faltered, though the perception of the industry as a whole has been knocked. Indeed 59% of local charities confirm that they haven’t been affected by negative press. All this means for charities is a renewed focus on communicating their vision, impact and process to the public is needed. An emphasis on transparency and keeping an eye on new regulation will go a long way here.
Another key element when it comes to donor trust is the experience you give them with your charity, not just in-person but digitally too. For instance, ensuring that you’re offering a professional and seamless experience with your website will inspire confidence. Delivering an optimised payment flow for donations will help donors to feel safe and secure in the hands of your charity online. And, of course, providing a clear process for capturing consent options and communication preferences will help avoid people feeling contacted unduly frequently.
Perhaps the greatest challenge facing charities in 2019 is the need to build income. The amount of funding charities receive from government bodies continues to fall, as does the quantity they receive from regular donations and fundraising. This is resulting in a ‘capacity crunch’ for many organisations that are forced to focus on frontline services whilst absorbing income cuts by reducing staffing and infrastructure. Indeed, the majority of local charities (88%) have fewer than five full-time employees and over 55% have no full-time employees at all.
The outlook isn’t all bad though. Encouragingly, 33% of respondents expect an increase in their organisation’s annual income. This is largely the result of social investment, which is playing a growing role in funding the voluntary sector into the future. Charities looking to boost their income can also look internally to boost sustainability by leveraging technology that enables them to streamline their operations, improve customer experience and save valuable time and resources on data processing, even with limited staff available.
Embrace the Tech Revolution
A further challenge facing charities, which will help tackle each of these three pressing obstacles, is the need to innovate. Many charities are investing in IT and their database operations. The pace of digital transformation continues to increase, and those charities that jump into the tech revolution will reap the rewards in the form of easier communications, greater efficiency and improved donor engagement. Investing in IT infrastructure at this stage will help charities weather a somewhat unstable future and continue to offer the life-changing services that mean so much to their communities.
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