Last week an article in Civil Society made note of a somewhat disappointing report from the Directory for Social Change which revealed that whilst company profits have been rising, for some their giving has actually reduced.
According to the article:
“An annual study of 550 companies with CSR programmes by the Directory for Social Change uncovered a substantial increase in year-on-year pre-tax profits of 55 per cent to £245.8bn, however charitable giving fell over the same period from those same companies.
Total cash giving by these 550 companies amounted to £470m, down 9 per cent on the previous year, while the total value of community contributions plummeted by more than a quarter (27 per cent) to £600m. The study, released today, tracks the essentially the same 550 companies each year, and the current report relates to the most recent company accounts available – ranging from 2010/11 to 2011/12”.
Both cash and non-financial contributions have fallen which, according to the author of the report, challenges the often-made assertion that some companies have been putting a greater emphasis on non-cash contributions to charity, like skills volunteering.
Nevertheless, Denise Lillya does argue the case for cash donations ahead of more partnership programmes and the likes, offering some optimism:
“For many charities, cash will be the best tool for the job, and for many companies cash will be the most available and appropriate resource to meet what they see as their social obligations. Cash and in-kind giving from companies remain a crucial part of the funding environment for charities,” she said. “Far from being on the way out, it has huge potential for growth.”
Back Britain’s Charities urges companies to maintain or increase their charitable giving at this time of need for the sector. As when calling upon individuals and the Government for support, the campaign asks business to stand by the voluntary sector in whatever ways they are able.
We would like those in the commercial sector to remain committed to their giving programmes and CSR initiatives, and those who pledge their commitment will be free to place the Back Britain’s Charities logo on their website – to show that they take this commitment seriously.
Of course, we must continue to appreciate that many businesses have been rocked by the economic climate in the same way that charities have, and might be struggling to pay their own staff and keep their own heads above the water. But for those who continue to make profits, we would ask that they replicate, continue and/or increase the volume of the fantastic contribution they have been making to the charity sector over recent years.
Last month saw the publication of the ‘Managing in the New Normal – adapting to uncertainty’ report, which includes a large amount of data that helps to illustrate the challenges that charities across the sector are faced with.
Each year for the past six years accountants PWC have teamed with Charity Finance Group and the Institute of Fundraising to produce a report focusing on the consequences that the global economic downturn is having on charities across Britain, and after an eventful year in the sector this year’s report is particularly insightful.
2012 of course saw the Government plan – and to their credit, cancel following the Give it Back George campaign – to cap tax relief on charitable donations, which would have threatened donations from philanthropist that many charities of all sizes rely on. Later on in the year, the ‘UK Giving 2012’ report detailed a 20% drop in giving from members of the public, and cuts to Government spending mean that charities are seeing their income streams squeezed.
The ‘Managing in the New Normal’ report found that charities are seeing an increase in the demand for their services, with 67% of respondents reporting that they saw an increase in demand during 2012, and 72% expecting to see a further increase in 2013. Increased demand for the vital services that charities provide is no surprise in a downturn, but it is not sustainable for all charities to keep up with increases in demand of this scale. In fact, the report found that only a quarter of those facing increased demand were able to step up and provide additional services.
The report also found that the fundraising climate has taken a turn for the worse in the past year. Of those asked, 93% of fundraisers said they thought it had gotten harder to fundraise over the course of 2012, and 89% expect to see this trend continue through 2013.
The dynamic between Government and charities has also seen a difficult year, partly because of the impact the spending reductions are having on charities. The report uncovered a 7% drop in those naming public sector funding as a major income source. This decline may partially explain why 58% of charities reported that Government measures had a negative impact on fundraising, and 52% believe that the Government was have a negative impact on the whole sector, compared to just 7% reporting a positive impact.
It is extremely interesting to see this report finding charities suffering from a combination of falling government support and difficult times for fundraising, whilst trying to deal with an increase demand for services. This echoes the Back Britain’s Charities campaign, which has been stressing that many charities are being forced to do more with less and calling for action to address this problem.
The report demonstrates the impact that this situation is having on charities, and found that 63% of respondents said they were having to cut back or stretch existing resources further, that 50% had taken steps to reduce wages and salary costs, and that 63% are considering or planning to draw on their reserves. Worryingly 23% of those asked said that they expected to make redundancies in 2013.
In better news, a number of statistics demonstrate how innovative the charity sector is at looking for solutions to challenges. For example, the report found that 85% of respondents are exploring new fundraising options, and that 69% had undertaken collaborative activity with others. It’s pleasing to see that despite the gloomy environment there is still a great deal of spirit within the sector, with 46% of respondents reporting that they work for an energised or optimistic team, and 61% stating that they are optimistic for the future of their charity.
It’s great to see charities working so hard to keep pace with demand, but we know the outlook for the year ahead remains bleak. That’s why it is so important that you help us by getting as many people as possible to sign up to Back Britain’s Charities and show politicians and businesses that we need their help.
Lord Ashcroft joins the likes of Richard and Joan Branson, Lord David Sainsbury and John Caudwell in pledging to give half of his wealth to good causes, and comes as the Giving List shows that the top 100 philanthropists in Britain have increased their giving to charitable courses by 20% in the past year.
It’s fantastic to see Lord Ashcroft join those signed up to the Giving Pledge, and by giving away at least half of his £1.2 billion fortune to good causes he will be making a lasting impact.
We’re delighted to see the Giving List include so many famous names from the likes of One Direction to Sir Elton John, and we hope that their philanthropic activities will encourage their legions of fans to do their bit and support charities during this tough economic time.
This weekend sees the publication in full of the Sunday Times Giving List, which ranks the top 100 philanthropists in Britain and typically features a number of famous faces. These are people who give away a significant proportion of their wealth to charity, with the top 30 giving on average an impressive 2.62% of their wealth to charity.
A preview of the Giving List this weekend revealed that the likes of One Direction, Coldplay and Sir Elton John feature prominently, with the list also showing an increase in representation from entrepreneurs who are keen to leave their mark by supporting the causes that they care about.
Read CAF’s preview of the Giving List here, and make sure you get a chance to see the Sunday Times next week to see who the country’s top philanthropists are and to find out which high profile figures are backing Britain’s charities.
We’re delighted to announce that influential Liberal Democrat Dr Julian Huppert MP has today signed up to the Back Britain’s Charities campaign, and has blogged for website Lib Dem Voice explaining why he has taken decided to support the campaign.
In 2011 Dr Huppert was named as the most impressive member of the 2010 Parliamentary intake by Liberal Democrat members, and since being elected as the Member of Parliament for Cambridge, Dr Huppert has made a name for himself through his work as Joint Chair of the All-Party Parliamentary Group on Cycling, and through his position on the prominent Home Affairs Select Committee.
Dr Huppert told us: “I’m delighted to be supporting the Back Britain’s Charities campaign and will work in Parliament to promote the important work that charities do and raise awareness of the challenges that they face.”
In his blog, Dr Huppert warns of the danger posed by a decline in giving, and echoes calls by the campaign urging the Government to simplify Gift Aid declarations to ensure that donations to charity go further.
It’s fantastic that committed MPs such as Dr Huppert are taking the time to support the Back Britain’s Charities campaign, and that he is promoting the campaign to a wider audience through Lib Dem Voice. We are extremely grateful for Dr Huppert’s support, and look forward to working with him to improve the climate for charities.
After being made aware of the campaign by a local charity supporting the campaign – Sandy Helping Hands – Mr Burt, who in his Ministerial role is tasked with dealing with the Middle East and North Africa, decided to act.
Mr Burt, who represents the Parliamentary constituency of North East Bedfordshire, has written for local website www.aboutmyarea/Bedfordshire to explain why he believes the campaign is positive for Britain’s charities.
Arguing that “Back Britain’s Charities is something we should all get behind in some way,” he raised the importance of giving tools such as Gift Aid and Payroll Giving, which can help people’s donations to charity go further.
He went on to explain that it is crucial that charities “should not be ignored or left to deplete due to lack of support from users and supporters,” a message that the campaign fully endorses.
It is extremely pleasing that the campaign is being supported by top Parliamentarians and members of the Government, and we look forward to continuing taking this message to politicians of all parties in the coming months and ensuring that they too are Backing Britain’s Charities.
Following calls from the Back Britain’s Charities campaign for the Government to reform Gift Aid, yesterday’s Budget announcement offered a positive development towards modernising the system to make it more effective for both donors and charities.
The Budget pledges that “the Government will consult on proposals to make it easier to claim Gift Aid through a wide range of digital giving channels, including options for enabling donors to complete a single Gift Aid declaration to cover all their donations through a specific channel.”
It has been estimated that reforming Gift Aid by increasing public awareness and boosting ways of giving such as Direct Debit and via social media could help charities unlock up to an extra £735 million of extra income.
In response to the Budget CAF’s Chief Executive John Low said that: “Gift Aid is vital for charities, but it simply isn’t fit for purpose in the 21st century. By bringing it up to date, charities stand to gain hundreds of millions of pounds a year. We need this fundamental reform of Gift Aid to make it work for the millions of people who support the causes we all care about.”
The Back Britain’s Charities campaign looks forward to working with the Government to help develop these proposals and ensure that reforms make donations go further so that charities across the country can continue to provide the vital services that communities rely on.
Click here for a more detailed review of what the budget means for charities from CAF’s Policy Manager Rhodri Davies, or let us know what you made of the Budget by emailing firstname.lastname@example.org
Creator of Give More Trevor Pears writes for Back Britain’s Charities.
Over 5 million households in food poverty and charities and community groups struggling to meet increased demand with fewer resources, it can be difficult not to despair and feel helpless in the face of the enormous challenges confronting our communities. However, we cannot afford to throw our hands up and hope that others will deal with it – we can all make a significant difference through our own actions.
Give More, an initiative to encourage those who can to give more time, money or energy to good causes was born out of this desperate situation. We anticipated the perilous effect the increased cost of living and a squeeze on public finances would have on UK charities ability to help those in need – at a time when this need would be at an all time high.
Give More is simply a nudge, a reminder to us all of our individual power and personal role in tackling need. We need to think about giving differently and if we all give what we can it will have a massive multiplier effect. And somewhat counter-intuitively at a time when we are all feeling the pinch, research shows that if you help others, you will feel happier too.
The UK is generous and we know there is an appetite to help because nearly 11,000 pledges to give more have already been made by people from across the UK. It doesn’t have to cost much or anything at all, so to help inspire people we’ve launched a Give Guide with almost a hundred ideas about how to give, that don’t cost a penny, and can even save you money.
These poverty figures are a warning bell about the strain our society is under. We are urging everyone who can to ‘Back Britain’s Charities’ and give to the good causes they care about, because it will make a real difference to those in need, as well as to the wellbeing of all of us in the UK.
Trevor Pears, CMG
Do take a look at the latest blog on the CAF ‘Giving Thought’ blog, which examines evidence to show that the Irish charitable sector is facing the same challenges as the voluntary sector over here in the UK, suggesting that this challenge is international. You can have a read here.
If you have a blog for us on this subject, then get in touch by emailing email@example.com.
Annie McDowall, Chief Executive of SHARE Community tells us how her charity is adapting to meet the challenges posed by the economic climate.
SHARE Community offers a range of training courses to disabled adults, most of which lead to vocational qualifications. We see most of the people who come to us become happier increasingly confident, and develop more control of their lives. Many move into independent living, and some succeed in getting jobs. It may have something to do with the fact that we focus on what people can do, and not on what they can’t. We’ve been going for forty years, and we like to think we’ve moved with the times and with disabled people’s changing needs.
I’ve worked in the voluntary sector for over 25 years, and I don’t think I’ve known a worse time for our organisations and the people who rely on them. Part of me is relentlessly positive, because challenges lead to innovation, and it can be exciting to think about doing new things, and doing things differently; but I’m also very worried, and increasingly so. It’s not just that we, as charities and social enterprises, are having to cut costs to such an extent that innovation becomes less and less of an option, but it’s all the other changes that are happening in the public sector and that are having a serious impact upon our clients, and on us.
Take personal budgets, for example. They were supposed to free up resources so that people could take control of their lives and make choices about their services and activities. Most people would get direct payments and manage their budgets, we were told. That presented a challenge to providers, who don’t on the whole have finance and administration departments with massive capacity. But we were up for it. We’d find a way to make it work, because this was in disabled people’s interests.
However, in our area, most individual budgets are still managed by the council. People are being steered towards the cheapest options, not services that will help them to achieve their potential and reach their own goals. People’s reviews, which should lead to well thought-out, person-centred plans, are seemingly being organised with virtually no notice, and with the exclusion of members of individuals’ circles of support. Don’t take my word for it: check out Slasberg et al’s paper How self directed support is failing to deliver personal budgets and personalisation (Research, Policy and Planning (2012) 29(3), 161-177).
But surely people with learning difficulties or complex needs have got social workers who know them and can help them to navigate the changes? Not in our area, not any more. Our local authority no longer allocates social workers to individuals. This means that people are having decisions made about them or on their behalf by people who don’t know them and don’t have a relationship with them. Just this week we learned that people won’t be going through reviews and assessments with qualified social workers, so there’s yet more downgrading of the service being offered to them. That means that our role as training provider has to expand to take in brokerage and advocacy as well, if we’re to support our clients to get the services that they need.
We used to deliver employment and training programmes funded by European Social Fund via either the Department for Work and Pensions, or the Learning and Skills Council – now the Skills Funding Agency. The Work Programme put paid to any welfare to work engagement, because of a payment model that puts all the risk on the provider agency and a system of engaging prime contractors – almost all of which are for-profit multi-national companies. The SFA doesn’t award contracts below £500,000, and again, there’s a high level of risk, and a crazy amount of incomprehensible jargon-laden administration for very little money.
And so we have got smaller. I find myself as CEO writing routine funding bids, and working out different ways of selling our services and innovating. Social enterprise developments look promising, but will take a while to come to fruition. Partnership and collaboration can be positive, but take time and resources to nurture. In the meantime, we do the best we can, pray that our staff stay healthy, and that some of our applications for project funding are successful.
If anyone wants to back our Marathon runner, here’s the link: http://uk.virginmoneygiving.com/fundraiser-web/fundraiser/showFundraiserProfilePage.action?userUrl=DerekHarrison