Perceptions Blog

Small Charity Index Perceptions: December 2018 – February 2019

The Small Charity Index is the FSI’s quarterly ‘Pulse of the Sector’ report, and has been collecting data every three months since June 2013. The report looks at income, service delivery, workforce and governance, allowing us to track the trends, challenges and opportunities emerging for small charities. Now into the Index’s sixth year of collecting data, we’ve decided to shake things up and release a quarterly blog examining the data that we collect. Here’s what we found looking back at December 2018 – February 2019:

Anticipated developments in the charity sector

UK society looks to be facing considerable changes to its infrastructure and statutory arrangements over the next decade, with the potential impacts on individuals and organisations difficult to predict. In light of this, for the latest quarter’s Index survey we asked our members what they thought the small charity sector would look like 10 years in the future.

Although some simply anticipate “all charities struggling to survive in an increasingly competitive market for funding”, it is clear from the data that many respondents feel unsure as to the trajectory of the sector. The increasing need for services will continue to interact with an inhospitable funding environment in the near future – these two trends pull in opposite directions, one logically stimulating an increase and the other a decrease in the number of charitable endeavours. Higher social demand implies we might expect charity growth overall, but as the sector is only too aware, availability of funds tends to be the critical factor in dictating whether organisations attempting to meet this demand are able to continue and expand. Whilst the most frequent response to our question (39%), then, mentions an anticipated decrease in the number of small charities, almost a quarter (22%) of answers mention expecting an increase in the number of these organisations, particularly those with a local focus, that might well establish themselves to meet high levels of demand. Several respondents specifically cite a situation whereby charities are “gap fillers”, delivering “what should be mainstream public services”, and they therefore anticipate that “more small charities [will be] set up to provide basic services that the local authorities and government used to provide”. However, others gave this answer on sector growth based on more optimistic grounds, with one respondent predicting that larger charities will be less popular because they are powerful and hard to engage with. Small charities can be more responsive to needs, and more nimble in the way they do things”, with another envisioning a future where “more people will have the confidence to start their own charity or community-based enterprise. Technology is making people feel inspired that they can make change, especially us millennials!”

Alongside the mixed response on the effects of the opposing currents of funding supply and social demand in the next 10 years, 13% of our respondents expect an increase in mergers and/or joint working between smaller organisations, and with larger players in the sector too. Several comments indicate a positive attitude toward this anticipated direction of travel…

“I hope that there will be some alignment and merging of activities of large charities, e.g. why do we need so many cancer and visual impairment charities? Those outside the sector find it very peculiar.”

“I think there will be more consolidation of small charities to ensure beneficiaries are having their needs met without having to try to find which charity is best for each issue.”

…whilst others have a more critical perspective, or else see such moves as simply a pragmatic response to market conditions:

“I think smaller charities may need to amalgamate, but that would be the antithesis of localism”

“I would say that more small charities will merge or close down due to lack of funding.”

With “less statutory funding available”, the same proportion expecting mergers/collaboration (13% ) instead expect a competitive squeezing out of small charities, in favour of their bigger, less locally-focussed cousins, who might have more brand and impact” to bring to bear in securing grants. However, some respondents mention a possible concentration of demand and delivery at the small/local end of the scale, with local organisations fulfilling niche roles” in their communities that larger organisations may not be well placed to satisfy.

The perceptions data collected on this topic, then, indicate a mixed picture. Overall, small charities are not expecting an easy ride over the next decade, with challenges continuing and probably increasing. One respondent told us thus far our management and trustees have defied financial gravity, but we expect this to get worse rather than better” – our other figures indicate that staff morale remains high, but this remains the case in spite of challenging external factors.

GDPR

Almost a year on from the adoption of the General Data Protection Regulation in May 2018, 100% of those asked told us they were aware of the changes in legislation. 77% were ready for the changes in advance of the change to the law, with 22% still in the process of achieving full compliance, and 1% reporting not having considered how their organisation can meet GDPR requirements during the quarter to February 2019. Just 13% told us they were 100% confident in their charity’s compliance, but 71% rated their confidence level, at 8 or higher on a scale of 1-10.

e-Learning

The FSI are excited to be rolling out a whole new suite of online learning through our online modules, from as little as £25 – these are practical, step-by-step sessions with various resources and activities embedded in the course, led by an FSI trainer. Our e-Learnings are reflective of the content included in our tried and tested full-day sessions, but can be completed anytime, anywhere. This will be of particular benefit for micro-charities who might struggle to take the time out to attend a full day course. Already available is our Developing Your Fundraising Strategy session online, and we’ve recently released the new Legacy Fundraising course. New sessions on Stewardship and Impact are in development, so do look out for announcements when these launch shortly.

77% of respondents reported having used e-Learning as part of their professional development in the past, with 95% saying they would be or might be interested in using the FSI’s e-Learning on governance and fundraising to help with such development in the future.

Have your say:

The FSI can only amplify the voice of small charities if you take part in our Index survey. The survey is open four times a year, with prizes for those who take part in more than one.

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