Sometimes, as we look into a new year, the crystal ball is cloudy and hard to read. But for the charity sector the future in 2012 is all too clear and it’s tough, tough, tough.

Despite this depressing outlook, there are things to be optimistic about. I have spent the last eight weeks while easing into my new job as Chief Exec of NPC, meeting many, many dedicated people in the sector. I’ve met charities, big and small and in all sorts of sectors; charitable foundations and philanthropists; government and quasi government (like the Big Lottery and Big Society Capital). And I don’t see a group of people who are about to give up and go home. They will do everything they can to keep delivering the best service they can.

But it’s true that the chips are down right now.

We know that the demand for charities’ service will increase. By exactly how much is in the lap of the consumer, the credit rating agencies the politicians and those elusive ‘animal spirits’ (take your pick). Whatever they do, unemployment seems set to rise in 2012 and poverty to increase. At the same time public funding will continue to be tight—and councils will be really making the pips squeak. The infamous ‘squeezed middle’ will be hurting as real incomes continue to fall, so we will do well to see public donations keeping up.

We know too that charities are going to have to adapt to new worlds of outcomes-based commissioning and of a localism that means that you need local knowledge as every council and community commissioner behaves differently. We know that there will be charities closing down and many forced into mergers. We know that trustees will be being asked to step up to the mark and that charitable foundations and philanthropists will be asked to bear a greater burden.

Opportunity or threat?

At NPC in the last six months we’ve seen a spike in demand from both charities and funders who are looking for our help to find their way through these difficult times. I have also heard about the perfect storm that charities face—with rising demand, lower income and tougher terms for contracts—in my numerous meetings in the last months. So there’s no doubt that 2012 will bring unprecedented challenges for charities.

All of this is hard. And yet. And yet it really does bring opportunity. This will be no time for marginal change: charities are going to have to really think hard about how they deliver for their beneficiaries. Old ways will need to be questioned, new business approaches brought in, different financing options embraced, partnerships sought like never before.  These are all areas that we can and will work with the sector to develop over the coming months.

So maybe we did not get the Christmas presents we really wanted. But we have to play with the toys (or gifts) we received. And we have to get on with it.

Happy New Year!

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