In just under a week, around 4.1 million Scots will cast their vote to decide the future of the UK. Some Brits may refuse to finish the thought of what will happen if Scotland decides to go independent, but with polls hovering at just around 50/50, for charities who operate north of the English border, this question is a serious one with no easy answer.
Insecurity is always an investment-killer, with charities reporting even six months ago that funders were hesitant in providing or renewing grants for charity activities in Scotland. A yes vote would raise further questions.
Private funders—trusts, foundations and individuals—make up over 50% of voluntary sector income in the UK. Data does not yet exist on funding flows between Scotland and the rest of the UK, but there is reason to hope that philanthropic giving to Scottish charities would remain at the same level with more billionaires per capita in Scotland than in England.
Looking at a list of the 13 largest trust funds donating to Scottish organisations, there is greater reason to worry here: only five are Scottish, and the rest are based in England. For these funders, independence could cause both practical and emotional challenges. Would British funders giving to Scottish organisations face additional barriers? And, would it feel like giving abroad (to France, Ireland or Malawi, for example), or would our shared history still preserve that sense of giving ‘at home’?
The second largest income source for charities is statutory funding, which makes up 35% of voluntary sector income in the UK. Some of this funding is already devolved to the Scottish Government, but would the new Scottish government be able to replace the rest? Would it make a difference where the charities are registered and based? And, would the system of commissioning change, forcing charities to learn to navigate an entirely new environment?
Lastly, many charities in Scotland receive large grants from the Big Lottery Fund. The Scottish Government says that the National Lottery would continue to operate in an independent Scotland and that its funds for good causes would remain too. However, according to the National Lottery Terms and Conditions, players have to be resident in the UK, and so the future of the National Lottery would be subject to negotiations between the two governments following the referendum.
The Scottish Government stresses that independence would mean the freedom to change all legislation. This would include policies affecting the voluntary sector, such as health and social care, housing, and benefits. All predictions are of course entirely speculative, but SNP’s policies differ significantly from those of the British coalition government, and so it is reasonable to expect that charities in Scotland will operate in a different context—and will have to support their beneficiaries through this transition.
Change in legislation—potentially a different currency, and certainly a new state border—would also raise a number of questions around governance. Would it make sense for charities working in both countries to continue having a central, shared governance? Would they become federated, or even go as far as to end activities in one of the countries? Maggie’s, a charity that runs cancer support centres, is just one of the big charities that would have to wrestle with such questions. Founded and based in Scotland, but with eight centres in England and Wales, it would have to decide on a governance model to suit its now effectively international organisation.
Charities working in Scotland will be holding their breath for next Thursday—if it’s a yes, then some big challenges lie ahead.