Looking back, and planning for the future
There have been several false dawns during the COVID-19 pandemic, but with the recent removal of restrictions across the UK it is hoped that finally an end to the disruption to the charity sector caused by the pandemic is now in sight.
Research published by The Charity Commission for England and Wales (CCEW) indicates the extent the pandemic has had on the sector. Whilst nearly all charities have been impacted in some way by the pandemic, the surprising conclusion to the research is that a majority of charities expect to be in the same or better position regarding their financial viability when compared to two years ago. Some of the other headlines from the research include:
- 85% of charities reported that the pandemic had impacted on the delivery of the services they offer, whilst 72% noted an impact on their financial position and 66% on staffing and governance.
- 57% of charities had to cancel work or events during the pandemic, and 49% had lost income from fundraising activities and a majority of charities had lost income from charitable activities.
- Nearly a third of charities stated that access to volunteers had reduced.
With the pandemic now (hopefully) behind us, the time is ripe for charities to start planning for the future. In doing so they may find a new publication from Charities Aid Foundation in partnership with the ICAEW helpful, entitled ‘What’s on the horizon for charity trustees?’. The report sees reasons for the sector to be optimistic, highlighting the opportunities that exist as well as challenges that are present. These challenges have set out in six key areas:
- Maintaining financial resilience
- The importance of working together
- The benefits to be obtained through diversity
- The need for support and training
- Going digital
- Achieving sustainability
As trustees formulate their future strategy they would be well placed to consider these areas and ensure that they are reflected in their plans.
Separately the NCVO has published its Road Ahead report for 2022, their annual analysis of the changing environment, identifying the forces and trends that are likely to impact on the voluntary sector using a PESTEL analysis (Political, Economic, Social, Technological, Environmental and Legal). This too can help trustees formulate their strategic plans. Inevitably there is some overlap with the CAF’s research but they identify five key areas to consider:
- The culture wars and attempts to divide the voluntary sector
- Shifting conversations on climate
- Rebalancing our society
- Strengthening our ties to those nearby
- How we live our lives
Of imminent concern to many charities will be rising rates of inflation and how this could impact on charity finances, with rising costs and income levels unlikely to keep pace, as well as increasing demand for services as many struggle with the rising cost of living. These issues are summarised in recent guidance from Pro Bono Economics which urges charities to reassess their plans to reflect the higher rates of inflation that are predicted to last for the next couple of years.
CCEW Covid-19 survey https://bit.ly/3MAWdpp
CAF guidance https://bit.ly/3MDJhzd
NCVO guidance https://bit.ly/360QWXm
Inflation study https://bit.ly/3J2FvwX