The future of charity

Everything we had planned for is different now. Many of us have good risk registers, but none had a pandemic like this on it.

Crises have a tendency to shake things up. Both good and bad are uncovered as what appeared immutable begins to crumble.

The bad

We will undoubtedly lose good charities; the survivors are not necessarily the ones we needed most or those that were best managed. Our sector doesn’t work like that (as I have written before). Instead, many of the worst hit will be community charities serving people most affected by coronavirus.

Over reliance on fundraising events and trading has left charities financially vulnerable to social shutdown. Many who get through will have been ravaged, losing staff and abandoning some of the good things they once did. Reserves will be virtually gone and grant income scarce; foundations thankfully pushed out a lot of cash fast but will now be depleted. Financial risk aversion will leap up the agenda for trustees.

And all this as we face up to the mother of all economic calamities. While the recent OBR forecast was horrific, it still hoped for a fast bounce back – which I’m afraid very few of my fellow economists agree with.

The good

But as the dust settles, many good things are emerging. The immediate focus on need, on getting things done and getting them done fast, had led to adaptation that would take decades in normal times.

Collaboration is happening in ways so rarely seen, as the real focus on urgent need trumps any other consideration. Some big charities have looked out for smaller ones, as the work of the British Red Cross shows. Foundations are coordinating and moving faster, with some even using data and sharing it (often via 360 giving).  At NPC we’ve heard reports of charities, funders and their local council working together better than ever before. We’re witnessing place-based system change unfolding in real time.

We’re all working a lot faster now. “Try, learn, evaluate fast, and adapt” models that the sector has tended to resist have taken hold. Innovation may have been forced, but it has been real. Equally profoundly, we have had to quickly assess what matters, what’s vital and what’s not.

A breakthrough in our use of digital technology has been forced upon us. But except in cases where digital delivery is impossible, this has been mostly for the best. I’m not just talking about endless staff Zoom meetings, but about learning how technology can help all sorts of people, what works and what does not, how to use it to identify need and organise ourselves towards those needs. And of course, how to help those who lack the tech.

There has been a massive surge in volunteers to local mutual aid organisations, food banks and other local charities, and to the NHS. These charities have had to learn fast how to absorb, organise and utilise the willing support they are receiving. The public, despite worrying about their jobs, have continued to give generously, although it seems digital crowdfunding for NHS charities is more popular or just more visible and accessible than giving to everyday charities.

All this has led to a different relationship with the public sector, especially the NHS. Cooperation has been in vogue. Some hope this crisis has shown the policy wonks and the Treasury that charities really matter, although others have taken the fact that the sector secured ‘only’ £750m as a sign that government does not care or that charities are useless at lobbying (See David Floyd blog).

Finally, we mustn’t overlook the social issues coronavirus has highlighted. Our interconnections and the immense value of so-called ‘unskilled’ workers. What people really value and what really matters. How unequal our society is; lockdown in the garden is an altogether different story from lockdown in a tower block, and while all classes and ethnicities have been hit, the greatest number of deaths have been among those with underlying conditions or doing jobs that expose them to Covid-19 – and these tend to be the poorer members of society.

The question now has to be: will any of this last?

Three scenarios

It is unlikely we can fully go back to how things were before coronavirus. The economic pressures will be, and already are, too much. Many charities will sadly fail. The focus on frontline Covid-19 charities will inevitably skew the sector too. But even with this in mind, there are still three broad scenarios, largely based on the charity sector’s appetite for real change, its ability to create a new relationship with government, and the actions of funders.

Option one: Nothing has changed

As the crisis subsides, the power of the old order pulls us back towards it. Charities retreat to caring about themselves, and many of the innovations are forgotten. Government puts the sector back in its box, and the public, while pleased charities existed during the crisis, pulls back from the civil action they had embraced, just like after the volunteering boom of the 2012 Olympics. Meanwhile, independent funders go back to their old ways of less core funding and doing their own thing.

Option two: Everything has changed

Risking from the wreckage, new collaborations are built through purposeful mergers and new partnerships as charities embrace the chance to re-think how they are formed and how they can best deliver on their missions. Nobody wants to go back to the old, slow, cautious ways. Pace, innovation, and being closer to the community one serves takes off.

Governments want to be a good partner, so instead of struggling with the role of charities they are persuaded of the critical role they will play in rebuilding society. No longer just a ‘nice to have’, charities are proactively built into the government’s “levelling up” vision for future prosperity.

The public are up for trying to address the challenges that so many charities have been going on about for ages, and attitudes to public spending have been changed for good. Of course not all of this would be for the good…

Option three: A mixed world

Some go back, some move on, and we end up with a much more varied sector. This has benefits but also challenges. Funders are not sure whether to still fund the older approaches or bet on the new. Some want to continue collaborating, others pull back remembering how difficult it is. Some charities change and challenge but others find the safe space is still available to them.

So which scenario are we heading towards?

The difference in where we go will be largely determined by the appetite of charities, government and funders for embracing real change and progress. Will they be cautious and shelter in their respective safe spaces? Or will they be bold, and take risks?

Charities and funders need to think through their strategy. And the sector itself needs to embrace the positive change and fight to stop a slow slide backwards as much it can.

At NPC our priority is to help philanthropists, funders, charities and government adapt to the challenges we face from Covid-19 and the difficult days ahead. But we are also working, with others, to make sure we come out of this crisis an emboldened, focused and more effective sector that is rightly recognised as integral to our future prosperity. Our online Leading Impact events and Funder Drop Ins are a chance to debate the shifts we are witnessing, and we aim to be lead the debate and to research the emerging themes more deeply, so that we can continue to offer the best advice to the sector and to policy makers.

We want to open up this debate now so that we are ready to do what one always should – never let a crisis go to waste.