When I wrote at the end of March about the plight of charities and the imminent funding crisis they faced as a result of Covid-19, we were in the very early days of the lockdown in the UK. It had put an immediate halt to the community events that contribute so much to charities’ income. Two months on, I wanted to reflect on what I have seen and learned in the intervening period.
Estimates from charity sector bodies around that time put a value of £4.3bn on the shortfall faced by charities over the coming 12 weeks. The UK government’s provisions for small businesses and the furlough schemes had enabled some charities to adjust their activities and cut costs; for example, charities with a retail trading operation, closed their shops and furloughed their staff. It was clear, however, that furloughing and hibernation was not the answer for most charities and their core service delivery, for which demand had increased. The growing awareness and ever louder calls for specific help did lead to a welcome response from the UK government on 8 April, when the chancellor Rishi Sunak announced £750m of support for charities. Helpful though that is, it evidently falls short of the estimates of lost income.
As could be expected, there has been a strong response from the British public. On 6 April, Captain Tom (Moore) began his fundraising walk for the National Health Service in the lead-up to his 100th birthday, aided by his walking-frame. Having set out to raise £1,000, news of his endeavour captured the imagination of the nation, leading to a total of £33m being raised. At the same time, momentum built behind efforts and activities to replace the mass community fundraising events.
Social media has long been used for spreading the message about participation and fund-raising via charity-giving platforms. The lockdowns around the world have, however, undoubtedly accelerated its adoption, as we have all adjusted to remote working and social distancing and resistant grandparents have finally embraced technology. Familiarity with and more widespread availability of video sharing and live-streaming has allowed family and friends to participate and cheer. The 2.6 challenge was created and provided a great focus for activity around the weekend when the London Marathon should have taken place.
Trusts and major donors have also responded and, where capacity has allowed, have either accelerated funding or provided additional funding to help tide charities over this initial shock. Despite this, many charities are still facing funding difficulties and continue to run emergency appeals. At the same time, costs are being pared where possible and redundancies in the sector are, sadly, inevitable.
Operationally, charities have behaved like most commercial businesses facing disruption to their normal activities. They have reviewed the needs of their beneficiaries, what services are required and how to deliver them at a distance or with suitable safeguards. As we have all been able to experience in our own lives, technology is an enabler and necessity is proving again to be the mother of invention. Charities are finding new ways of harnessing technology, with resultant improvements in productivity or reduction in costs (and not just staff costs). The groundswell of volunteering in the UK has been heartening but we should realise that volunteers have to be well organised, normally with an associated cost. This is, therefore, generally easier for organisations with experience and infrastructure to manage the increase in volunteers.
So my reflections are that the challenges visible in the early days of the Covid-19 continue to play out. We might think about the response of charities to the pandemic shock in three phases, although they are really part of a continuum:
- The present and immediate future
- Transition to more effective operating models and service delivery
- Long-term stability
Philanthropists will have an important role to play in which charities survive in the short-term, not just in deciding to which they allocate normally limited resources. It is not simply a question of how much money is given but also a matter of how you give. Many charities were already facing certain challenges in fundraising, namely generating sufficient unrestricted funding to cover core operating costs and devoting, or rather wasting, resources to making unsuccessful applications to grant-makers. Simplifying application processes and giving discretion to the charity’s management as to how grants are used adds greatly to the flexibility and responsiveness to get through this difficult period.
They will also be able to play a role in the subsequent two phases. Using a sailing analogy, it is one thing for a ship to survive a storm, another for the crew to make a yacht fit to sail again and determine the course required to reach its destination. For those charities that do survive the storm, an important period of repair will be necessary, as will an assessment of whether they are shipshape for the continued journey. More prosaically, charities are going to have to think strategically about how to deliver their mission in a changed environment, the resources they perhaps need to effect the transition and adopt a new operating model. Trustees and the charities’ executive management teams will need to decide whether they can go it alone or if combining forces with one or more other charities, will enable them collectively to serve their causes and beneficiaries better.
Experienced philanthropists with a focus on particular areas of work will be well placed to bring perspective to the challenges faced and facilitate the exchange of experience with others in the sector. New and less experienced philanthropists can also contribute, not only through flexible and incremental funding. Entrepreneurs, for example, can bring the knowledge and skills they have to solving business problems to help charities to think through their issues and develop appropriate strategies for the future.
Helpfully, charity sector bodies and advisers have been active during the lockdown. There is consequently a raft of additional information and resources now freely available and regularly updated to support the efforts of individuals, charitable trusts and foundations and help them identify where to devote their resources effectively. New Philanthropy Capital (www.thinknpc.org) has created an interactive data dashboard specifically to help charities and funders see the places that are currently suffering the most from Covid-19, and those that have underlying factors – age, health, ethnicity, economic indicators – which may put them at risk. Others bodies in the UK include the Association of Charitable Foundations (ACF), National Council of Voluntary Organisations (NCVO), Charities Aid Foundation (CAF), The Beacon Collaborative. The National Emergencies Trust and the 46 Community Foundations provide reputable conduits for getting charitable money quickly to where it is needed in the UK, at a local level.
To find out more, please visit https://sandaire.com