If I say it looks rocky that will not be a surprise. I have read the latest report from NCVO about the future of the voluntary sector (‘The Road Ahead’ NCVO Jan 2016) and it appears to be more boulder than rock. I will summarise the bare bones here, but also comment on some of the emerging “alternative roads” (that is the trouble with metaphor!).
The NCVO report investigates the political, economic, social and technological challenges ahead. The political view is that, with the strength of the Conservative majority and the suggested lack of unity within the current opposition, reform will go ahead. The social reforms will have a significant impact on the voluntary sector, particularly around Work and Pensions, Localism, Welfare Cap and the “shrinking state”.
The report quotes Lord Porter, Chair of the Local Government Association:
“Even if councils stopped filling potholes, maintaining parks, closed all children’s centres, libraries, museums, leisure centres and turned off every street light they will not have saved enough money to plug the financial black hole they face by 2020.”
The knock-on effect for charities is likely to be great, and preventative charities will be vulnerable to cuts and closure – with a smaller number of large contracts issued coupled with an expectation of reduced costs. A key to success will be the ability to articulate cost benefit analysis. The report recognises that with the reducing provision of the state the voluntary sector usually represents the only alternative and operates “on a shoe string”! This I read as providing good value to society- particularly around youth support and support for elderly and isolated people.
“One of the most significant changes was the lowering of the welfare cap” – NCVO go on to report that low income households are expected to be much worse off by 2019. “By 2019 the poorest 20% will see a real-terms reduction in their net income of around 7% compared to 2015.” Buckinghamshire is hardly the most deprived county in the UK, however reports show that poverty in a wealthy area can have a great impact on the individual as the differential is much more obvious, costs are higher and services are not directed towards the poorest.
If we look at the economic reports for Bucks we see a very affluent county and the wider economy seems to be healthier than ever. Yet the economic recovery has not filtered down to charities. The report points to smaller charities with under £1m turnover suffering disproportionally. As I predicted in the Sector Report in 2015 the drive for donations is being led by some vigorous fund raising techniques employed by the larger charities to the detriment of smaller local charities. Most charities in Bucks have a turnover of less than £25,000.
That all seems pretty bleak – so what of the alternative road? The report suggests alternative funding is available from social investment models and the launch of the Access Foundation – although these funds are mainly accessed by larger charities. Crowdfunding is mentioned and smaller charities have been able to take advantage of many crowdfunding opportunities, with donations growing by 77% to £2m, whilst community shares grew to £34m.
The report did not look at the part played by commercial sponsorship of charities and, although this aspect of funding traditionally has been low in comparison to other funding, it may represent a valuable stream of income.
So the road ahead will be rocky. Our own research at Community Impact Bucks shows us that the challenges for us in supporting the sector along that road lie in helping charities network together and seeking shared resources (78% of charities are seeking opportunities to share resources); in working with our expert mentors in developing sustainable business plans (56% wanting training on alternative income generation) and offering training and advice surgeries in fund raising, business planning and marketing.
Rocky road or not we need to find a way through to where most of our voluntary groups are still supplying a vital service to society – as the alternative, failure, is unthinkable for the most vulnerable in society.