Britain is in crisis. How much can we ask of charities?

The NHS is falling apart in front of our eyes, partly due to the stresses within social care which is itself a major crisis for so many families. Our railways are a shambles. Schools are starting to crumble, with recruitment and retention of teachers becoming very hard – as with much of the public sector. Prices are high and rising, especially energy and food, meaning many are finding it hard to keep up with the cost of living.

At times like this people often look to charities and to philanthropy to help out. Charities will, as ever, do what they can to help. That, after all, is one of the reasons why they exist. People see this most clearly in the work of food banks, allowing people whose income just is not enough to feed their children and keep them warm to scrape by.

But all this raises difficult issues. Can charities play this role? How much can we ask of charities? Are we asking charities to divert from other key roles they play in our society? And, where is the moral line between what should be done by charities and what should be done by the state?

Starting with charities’ ability to do what is being asked of them. Need – ‘demand’ if you like – has risen massively. But costs for charities are up too, just as they are for the rest of us, while incomes for most charities are down.

Small donors cannot afford to give as much; the rich, although still rich, have seen their investment returns fall, leading some to tighten their giving belt right when they are most needed. Grants from independent funders or contracts from local councils or health organisations are worth much less in real terms than when they were signed. On top of all this, many charities who rely heavily on volunteers are finding that instead of putting half a day aside to volunteer, people are increasingly trying to use this time to earn a little more income instead.

It is hard to get an exact handle on exactly what is happening. Surveys in the charity sector are very often self-selecting ones, with all the biases that come with this. Our State of the Sector research and Local Needs Databank are partly attempts to remedy this.

While we await more action from the Office for National Statistics and others to bring in formal panel surveys – as is done for business – we have to infer to some extent as to how bad the situation is and where the pain is most acute. However you look at it, there is no doubt money and resources are in short supply.

Even when it is solvent, there is a limit to what the charity sector can do. It is bigger than many think, almost certainly bigger than the national accounts say, but it is still only a small proportion of our economy.

Whether it is larger national charities like the British Red Cross, Macmillan, or Citizens Advice, or small, locally-focused and niche charities, the charity sector can only do so much.

And despite our attempts and those of others to shift the perspective of funders, charities are not about game-changing system change as much as they should be. There is a real danger in the current crisis that the things the charity sector does better than the private and public sector – preventative, patient, long-term work or trying out new things that can be scaled by others – drop down the list of what charities are funded to do. So yes, charities will help with the immediate crisis, but they cannot do everything and solving this crisis should not be the sector’s sole purpose.

Finally, there is the moral question of how much we should be relying on charities to do any of this. Say charities were able to end destitution, look after those the NHS should be caring for, provide volunteers to help out in schools as the schools cut back on teaching assistants and even teachers – in other words, picking up the slack in core public services. Is this right? Few in the charity sector would say it is.

At NPC we’ve worked with funders who even in good times are concerned that some of their grants are simply enabling charities to win contracts at a lower price – therefore bailing out the public sector.

Our State of the Sector research has shown that 59% of charities subsidise contracts from donation income. If we have created a world that only works if charities fill in lots of the ever-widening gaps appearing, then this is surely a world going wrong.

Charities – contrary to what some on the left think – are always valuable and always needed. They are an expression of our compassion and our collective strength; they help create a pluralist world; they can help people in need who have become scared and alienated from those who have power over them – be that the probation officer, teachers, social workers, the police. They are needed to create a healthy and happy Britain.

So, hooray for our sector. I hope the Government finds a way to give it more support. But let’s not kid ourselves that this is a good way to run our country.

A version of this blog originally appeared in the Municipal Journal.