Challenging times for charities

In a time not so very long ago charity, much like motherhood and apple pie, was something accepted as intrinsically a good thing.

A number of events and changes have happened in the recent past that, whilst not flipping this assumption on its head, will have given charity trustees some cause for concern.

Since the financial crash and with continued austerity, the role of the State is changing. There has been a gradual acceptance that some areas of social provision may now have to be provided by other agents, including by charities.

Whilst this represents an opportunity for charities it does so at a price. Public expectations are high and the demands they may place for all but the largest charities may be too great. Many could find themselves at risk of being unable to meet expectations. Others may be financially over stretched.

Allied to this is the general financial position of charities. Many charities have for too long been over reliant on a small number of funding options. If a funding source dries up the impact on a charity can be immediate and devastating.

A high-profile example last autumn involved Kids Company. Whilst there were a number of factors that arguably caused its downfall the main issue that precipitated the collapse was its over reliance on government money. More locally, we have advised charities where similar issues have been faced as a result of the non-renewal of local authority contracts.

Arguably, charities seem unable to win whichever way they turn. They may seek to diversify funding and raise more from public donation. But with a greater degree of donor fatigue charities have had to resort to a harder sell. This could be either through greater levels of donor requests by post or email or by encouraging support through (the awfully named) chugging.

Both options have faced a good deal of negative press over the last 12 months. In the case of the former with the high-profile reporting of the death of Olive Cooke, a long-serving supporter of the Royal British Legion. It was widely reported that bombardment by junk mail from charities was a cause of her depression and death. In the latter there has been increased hostility to use of chuggers and recent attempts by local authorities to severely curtail their numbers.

All the above creates a threat to charities but, ultimately, provides an opportunity. Some charities now are looking at alternative funding – including using social media. Others are adopting more flexible governance structures – including use of an element of social enterprise – in order to adapt and survive.

On the basis that a civil society is recognised as a necessity then charity will continue to play an important part in delivering this.

For further help or advice, please contact Director and Head of Charities and Social Enterprises Duncan Milwain on 0113 280 2097 or [email protected]