Back in late summer, you’d be forgiven for believing that we were almost done with Coronavirus. The vaccination program was going well, nearly every business was starting to operate normally and home schooling was something that parents got through and logged as a painful blip. But while the furlough support scheme went some way to help employees, our precious charities were taking the kicking of a lifetime. The impact of the pandemic on the charity sector has been examined from many angles and in this blog we collate the findings. Read on for the story of what’s happened so far in the charity and voluntary sector and what could be ahead.

As people hunkered down at the beginning of the first lockdown period, many took the decision to cull unnecessary outgoings. According to Rapidata, who gather data from more than 600 UK charities, cancellation rates in March 2020 were 3.09%, which is 41% higher than the same period in the previous year.

Shopping malls closed, the usual annual shows got cancelled and effective face to face fundraising came to a grinding halt. Door to door visits were unthinkable and charity shop doors closed, unable to even take drop off donations.

Nationally, the highly populated events that generated much needed income for charitable organisations were postponed, one by one. From marathons to festivals to group fundraisers, the lockdown machine bore down and stopped everything in its tracks.

But as the world fell silent, the needs of those suffering did not.

With such blanketed cancellation, it wouldn’t be unreasonable to assume that many charities found it difficult to survive at all.

So how did charities cope?

Towards the end of 2020, media reports painted a very bad picture indeed for the charity sector, with articles describing losses as ‘devastating’  and charities as being on the ‘brink of collapse’

The Charity Commission report released in October 2021 echoed those headlines, showing that 90% of charities were going through ‘serious negative impact’ thanks to the pandemic.

These impacts were felt financially first of course, with 60% experiencing a loss in overall income. In June, figures from independent researcher Pro Bono Economics, showed a £6.4bn shortfall in charities across the UK. Even charity giants like National Trust and Cancer Research reported a £320m shortfall between them.  

Further blows came in the form of deteriorating mental health, as teams dealt with anxiety about what the power of the virus was and what the future held. Of course morale was affected too. Many worried about loved ones and job security, while nearly all felt the sting of reduced earnings.

What about the impact of Covid-19 on the voluntary sector?

Vital foundational support from volunteers also took a dive, with over 30% of charities saying they saw shortages of current helpers and a big drop in newcomers stepping forwards to volunteer. 

Most charities include their staff as their best asset and volunteers are no exception. According to the Small Charities Coalition, 40% of charities say that recruiting volunteers is extremely difficult in the first place. Of those willing to volunteer during the pandemic, many swayed toward roles needed by the NHS… and who could blame them when our health service was on its knees?  

An ongoing survey from the National Council for Voluntary Organisation (NCVO) from March 2021 showed insightful results on how the VCSE sector (Voluntary, Community and Social Enterprise) sectors have been coping.

The project aims to continually examine the impact of C19 on the VCSE organisations on a month by month basis and is a collaboration between Sheffield Hallam University, Nottingham Trent University and the National Council for Voluntary Organisations. 

A total of 590 respondents took part in their survey ‘Respond, Recover, Reset – The Voluntary Sector & Covid 19’ which asked a broad range of questions to those in the voluntary, community and social enterprise sector. Of those, 72% were registered charities, with 68% employing paid staff.  

• In March 2021, 7% of the voluntary sector said it was ‘quite likely’ that their organisations would not be operating in one years’ time

• 46% said there was an increase on demand for services, while 19% saw a decline. Interestingly 35% said they saw a rise in costs, but 34% saw a drop

• Nearly half (46%) of the organisations surveyed said they used cash reserves in order to continue operations. Worryingly, 9% said there were simply no cash reserves to rely on, or not enough to last beyond a month

What these results show is just how differently the impact the pandemic has been felt within different organisations.

Increased demand

Despite the drop in income and resources, lots of charities have been further weighed down by increased demand as more in need reached for help.

In March, 46% of participants in the NVCO survey said demand for their services had risen since the pandemic began. By December that figure had gone up to 57%. Likewise, 85% of the infrastructure organisations upon which charities themselves depend, said demand for support had increased.   

So how did charities adapt to the impact of the coronavirus?

At first, charities needed to prioritise how they could continue working under new restrictions. It was most important to stay connected to their communities and carry on delivering services.

Of course, many of the smaller charities were simply unable. Some had completely stopped activities during the first lockdown, as we scrabbled to understand how serious the virus was. That closure meant those depending on their support simply didn’t have any. A distressing thought.

Many charities took advantage of the furlough scheme – in fact half of those with incomes over £500k per year did just that. A further 40% admitted needing to use financial reserves to survive.

20% took advantage of local authority funding, while a seventh used government funding.   

But even these extreme steps weren’t enough for all to stay afloat. Some had to reduce staff and cut spending down to the bare bones of just existing. As charities navigated and survived the initial stages of the pandemic, the longer term challenges continue to be present and visible.

A Tweet from Ex CEO of NVCO Karl Wilding, came at the end of October 20 and seemed to sum up the general mood at the time;

‘The good news is many are innovative and ready, the bad news is we’re all knackered and the moneys running out’.

How has the UK charity sector faired compared to the rest of the world?  

In May 2020, The Charities Aid Foundation (CAF) began surveying charities across the globe in countries like the UK, Brazil, Australia, India and South Africa.

At that time, around a third of UK and Australian charities said they could not survive beyond 6 months without support, with half admitting they would not even last a year.

Meanwhile in less wealthy Brazil, South Africa and India the findings were more bleak. At least half of charities there claimed they could not last any more than 6 months unless they received help. The overwhelming majority said lasting a year would be difficult to achieve.

When asked exactly what support they envisaged would be necessary, each country said removing restrictions preventing them from accessing funding would be paramount.

Support for charities globally

In some cases, countries see charity as an essential resource, where others see it as a ‘nice to have’, which is reflected in the responses when asked what support had been received during the pandemic.

Brazilian, Indian and South African organisations said that the top sources of support included donations of goods from individuals or corporations.

Individual one-off donations helped in India and S.Africa, while new regular giving donations were key to Brazilian charity survival. High net worth individuals and family trusts were rated highly as most supportive in South Africa.

Volunteers were the lifeline in Brazil and India and Brazilian individuals and communities utilised social media to raise awareness and generate income.

Support received from the public was a welcome surprise in both India and South Africa, but Brazil said they were surprised by the lack of overall support available for the third sector.

CAF reported that the majority of charities they spoke with said their governments did not support them during the pandemic. Charities in Brazil felt unable to even raise their profiles.

Were there any positives from the pandemic?

Back in the UK, thank goodness for the actions of everyday heroes who both inspired and humbled the rest of us into action.

While Sir Tom Moore was probably the most famous of all efforts, raising over £30m for the NHS and Sir Marcus Rashford campaigned to make sure the poorest children in society got fed, there were many others fighting the good fight.

The  73 year old ‘skipping Sikh’ Rajinder Singh raised £14,000, 21 year old artist Chloe Turner painted for the animals to keep Norfolk zoo running and school PE teacher Rafferty Gunn ran an entire marathon in crocs within the confines of his back garden. £43,700 was raised for domestic abuse charity by London voices, and HotPod yoga livestreamed classes to 14,000 raising nearly £100,000 for the NHS. 

According to the Charities Aid Foundation, UK charity donations actually equalled those of the previous year in the first half of 2020, where between January and June, donors gave £5.4billion.

The government provided emergency funding to the tune of £750m bailout fund, albeit mainly for coronavirus related causes.

Another small chink of light came in finding that charities who were either insolvent or closing numbered just 97, which remained similar to figures from pre-pandemic years.

But perhaps the most encouraging thing is what the human spirit demonstrates time and again; Resilience.

Of all the charities impacted, nearly half made changes to their processes and service delivery, with most finding workarounds online. Upskilling became the buzz word as charitable communities realised they could work smarter with digital solutions. Everything from zoom meetings to online training became an unexpected time saver as well as increasing productivity.

Charities have had a glimpse into what’s possible by doing things digitally, looking at tools online to help function more efficiently. 49% of those surveyed agreed that their employees were now able to adapt to technology much more efficiently. Soft skills are improving all the time and charities’ ability to adapt and change has become the new norm.

Other real progress was made with mental health and wellbeing. People stopped taking each other for granted and respect for key workers and the simple things regained priority. Organisations became stricter about responding to emails within the boundaries of the working day. Regular check-ins with team members about how they’re doing helps. Staff have been able to work at a steadier pace than the chaotic ‘before’. 

What can charities expect in 2022 and beyond?

So what’s next? Can we move confidently into 2022?

With the new variant Omicron on the loose and a background threat of further variants, it would be unwise to get too comfortable.

The UK government’s stance that no more lockdowns will occur gives businesses a fighting chance at least, but what about public confidence? Whilst some remain faithful that the vaccines are our way out, there are a vocal minority that are still sceptical. And that’s without mentioning the anti-vaxxers.

It appears that regular donors weren’t the only ones to tighten belts in the early days of the virus. Research by Pro Bono Economics showed that charity donations from the super-rich went down by a over a fifth in the years leading up to the pandemic, despite an increase in their personal income of 10% over the same period. We can only hope that consciences grow and trends change on that little gem.

The latest December results from the NVCO survey show that 51% of charities are now in a stable financial position and 64% expected that position to remain the same into the new year. 17% even felt their financial position would improve.

Encouragingly, 26% saw a rise of volunteers, with 30% expecting further increases still. 50% said volunteer ratios stayed steady.

Click here to see the latest live data from the December 2021 report

What this does indicate is a pulling together and can-do attitude within the sector, as well as a willingness for people to come back to helping now the dust has settled a little.

The reality we suppose, is that unpredictability is the new future. With it we must be ever-prepared to move and respond as necessary.

So while there’s no clear answer or finale of Covid19, how do charities themselves anticipate the future?

According to the Charity Commission research, 62% said that they expect the next year to be financially challenging again with ‘a threat to… charity’s financial viability in the next 12 months’. More than 30% expected less revenue from fundraising next year.

Despite that, just 1% thought that this could signal complete collapse.

Overall, it’s fair to say that there’s plenty of trepidation and more tough decisions ahead.

While different charities have been affected in different ways, one thing is for sure: we must continue to support these precious lifelines in every way possible.  With the furlough scheme now gone, it’s essential that charities be helped to carry on as best they can.

Investing and caring for volunteers and fundraisers alike is paramount for survival and many will continue to stay on and thrive if they feel valued. Training them well, providing incentives and opportunities will do well to help them grow in their role.

How Charity Link is making the difference

Charity Link are passionate about fundraising and endeavour to deliver tens of thousands of regular donors to our charity partners. We recognise that now, more than ever, long term, committed donors are vital to survival.

We are proud to offer some of the best fundraiser training in the industry, where we provide our fundraisers with all the tools, skillset and motivation we can to help them flourish.

We are proud to have met and surpassed our client’s charity goals for 2021, despite the many challenges we faced ourselves. Our number one priority has always been the safety of both our team and the public we deal with. This ethical approach continues to be the bedrock of our success.

To read more about the ethos behind Charity Link and our foundations, read the inspirational interview with founder and chair, Carolyn Moore

Charity Link are constantly evaluating and improving our internal processes, to offer the best support to our employees. Our aim is to be in the best possible position to keep raising much needed funds for our beloved charities.