What is next for the third sector?

Published on
3 November 2020
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Our special panel of experts look at how coronavirus has affected the third sector

David Allen, CEO for Cumbria CVS
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Becky Towns, CSR & Communications Executive for The Cumberland
Becky Towns photo
Andy Beeforth, CEO for Cumbria Community Foundation
Andy Beeforth photo
Leigh Williams, CEO of Cumbria Alcohol and Drug Advisory Service
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How badly has third sector funding been hit this year?

Our April survey at the start of the pandemic suggested that 60% of Cumbria’s voluntary organisations only had enough reserves to last six months. We also know some organisations have had to close – and many have furloughed staff and suspended activity. My real concern is next year: unable to fundraise this year, reserves cannot be restocked – and that could have a massive impact on next year’s financial position.

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David Allen

It’s been significantly hard hit. A recent report highlighted that UK charities are facing a shortfall of £12 billion this year, especially with the cancellation of many fundraising events and activities. With no end in sight, income will likely not recover in the short term.

Becky Towns photo
Becky Towns

The sector has been hit very badly, some worse than others. Charities that rely on footfall, such as theatres and museums, have been badly hit as have those that have charity shop income or rely on residential bookings from schools such as outdoor centres. 60% of Cumbrian charities responding to a survey at the beginning of the pandemic stated they had less than 6 months running costs in reserves.

Andy Beeforth photo
Andy Beeforth

At the beginning of the lockdown we were hit very hard, but we’ve been resilient - we managed to set up a helpline and have our staff working from home. I’ve seen some charities that have adapted really well, and it’s mainly the smaller ones that have been able to do this as we are used to thinking on our feet. It’s the larger ones that have had to make cuts and redundancies.

Leigh Williams photo
Leigh Williams
Have people's donating habits/methods changed during the pandemic?

People have been incredibly generous with their time, which can be worth more than a cash donation. Opportunities to donate time and volunteer are available in every community and through www.supportcumbria.org.uk - where over 2,000 Cumbrian residents have already registered. One of the many financial challenges for voluntary organisations has been an inability to hold fundraising events – fairs, bring and buy, sports and social gatherings – anything that brings people together.

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David Allen

Financial pressures caused by job uncertainty and furloughing has impacted charitable giving with many people reducing or stopping completely. This is evidenced by the reduction in the number of direct debits set up to charities during this year. Continued social distancing and its impact on large scale fundraisers such as the Great North Run also means that reliable income streams have disappeared.

Becky Towns photo
Becky Towns

Charities have had to go online more to spread the word about what they do and have had to cancel public fundraising events. Uncertainty about the economy and job security means some people haven’t felt able to donate in the way they may have done in the past.

Andy Beeforth photo
Andy Beeforth

Charities have not been able to run events, which is usually how we raise a lot of our funds. People still want to donate, but they don’t know how. We’ve seen a lot more people doing their own fundraising campaigns online, although there is a danger that some of the smaller charities might get swamped by the bigger campaigns.

Leigh Williams photo
Leigh Williams
How can third sector organisations diversify their income streams in the future?

There are options but many of them take time to set up. Establishing digital routes is clearly an area for development: crowd-funding, lotteries, online events and just simple “donate here” buttons on websites are all “doable” with the right expertise and focus. We are seeing a very positive growth in “digital volunteers” who can give their time and expertise in short bursts to very powerful effect.

David Allen photo
David Allen

We’ll likely see charities close and potentially others merging, but there are some options to diversify - one being pooling their resources with like-minded organisations, working more collaboratively together on fundraising, shared projects/initiatives.

The other key one for me is more on outsourcing tasks to save costs by building on relationships between charities and local businesses.

Becky Towns photo
Becky Towns

Charities have been trying to diversify income for years. This isn’t easy to do because like many businesses charities need to invest to diversify their income streams.

Andy Beeforth photo
Andy Beeforth

I do think that fundraising online is a way forward, but you have to stand out.

There is also an idea called micro-giving, which is lots of people giving little bits of money where they can. Charities might also want to think about how they can earn money with things like a café, or in our case, we need to explore selling our services to large businesses.

Leigh Williams photo
Leigh Williams
Will the state have to step in now that many charities are seeing increased demand at the same time as falling income?

In some ways, even printing more money is not the answer - it assumes there are people to pay and capacity in the system to respond. What we are seeing now is a very welcome multi-sector engagement in how we join the dots between health, care, voluntary and community sectors to ensure we can protect and support our population. Mutual understanding and resource-sharing will lead to true collaboration and gives us the best chance of a healthy future, together.

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David Allen

The £750m support announced from the Government earlier in the year will only go so far. More will need to be done, particularly for many smaller charities who may be going unnoticed as there is less awareness around them compared with the bigger charities. I think extra support is very much needed to support the charities who are working tirelessly to help, support and promote positive outcomes for people in the heart of our local communities.

Becky Towns photo
Becky Towns

The State has already invested in a number of schemes that help different parts of the charity world including hospices, arts and cultural centres and social welfare services. Although welcome, that money has only covered a small proportion of the losses. We need the state and charity sectors to work together to help our most vulnerable people.

Andy Beeforth photo
Andy Beeforth

I think they should be stepping in, but I don’t know if they will. The government gave a huge amount of money earlier in the year, but it mainly went to the big charities and not a lot has found its way down to the smaller ones.

Leigh Williams photo
Leigh Williams
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