Missing Pieces

Here's our latest opinion piece looking at how Covid-19 is affecting the charity sector. How has this crisis impacted you, or your charity?

The Oxford English Dictionary publishes its ‘word of the year’ around November time.  I would imagine that ‘unprecedented’ will be in with a shout, jostling with ‘Covid-19’ and ‘coronavirus’ no doubt.  Whatever adjective you choose, there is no doubt that these are indeed remarkable times.

It would seem that few are immune from the non-medical effects of this outbreak.  Societal lockdowns, school, business and university closures have impacted people across society, creating financial and well-being stresses and strains.  Much has been written about this, but much less has been spoken about the secondary and tertiary effects of this pandemic.

What does the future of the charity sector look like?

The charity sector in the UK is substantial.  There are around 200,000 registered charities in the UK employing close to one million paid employees.  All told, the combined income of all UK charities is circa £50bn which is comparable with that of the Higher Education sector and several of the FTSE 100 companies.  This is before the value of volunteering is accounted for which has been estimated to be worth more than £20bn per year.  Make no mistake, the sector is important to the social and economic fabric of the country, and right now it is staring into an abyss.  

How this crisis is impacting charities is as varied as the sector itself.  For example, charities that help young people through outdoor activities, or engage them in drama and the arts are largely unable to deliver their mission. For example, Sistema Scotland have had to indefinitely cease their programme.  Social distancing measures mandate that all of this activity must stop.  This will undoubtedly have consequences for the constituency of people who would have been helped, supported, inspired or engaged by these organisations.  For others, it may put additional, untold strain on their ability to deliver essential services, either as demand rises, or the resources available to enable them to deliver their mission sharply decline.  Perhaps a more shocking fact is the role of philanthropy in medical research - almost half of all UK medical research is funded by charities.  Clearly a decline in income for this charity sub-sector could have long-lasting ramifications.

“Almost half of all UK medical research is funded by charities.”

The extent to which charity income will be affected is still unknown, but history, though ambiguous, is modestly encouraging.  Data from the USA suggests that giving to charity has tended to increase significantly in times of stock market decline, however the culture of giving in the USA may not correlate as well with the UK or other parts of the world.  What is clear, however, is that philanthropic/or voluntary income will be affected, and significantly.  Personal/household income uncertainty is already impacting regular giving.  Community fundraising - a critical source of unrestricted income for many charities - cannot take place; event fundraising rendered useless through the cancellation of duathlons, walks, quiz nights etc. and that is before we even begin to consider the impact of large events such as the Kilt Walk, or the London Marathon (let’s not forget that in 2019, the London Marathon raised a record-breaking £66.4m for charities).  What impact will falling stock markets or subdued house prices have on larger gifts or legacy income?  These are sobering facts in sobering times.

This crisis has also brought into focus the way wealthy individuals are perceived by some sections of society.  Consider the recent furore around Premier League footballers who some, including politicians, suggested should take a cut in salary and donate it to frontline services.  Clearly, footballers are some of the more conspicuously wealthy individuals in our society, but should that fact alone be enough to compel or expect their support?  Whilst I am not a voice-piece for Premier League footballers, I am sympathetic to some of their frustrations around this situation not least because they are merely one subset of the UK’s wealthiest residents.  

Fundraising is at its best when it is about enabling someone to support something they feel passionate about, something they feel good about; whatever the origins of their wealth.  By focussing on (in this example) footballers, people are in danger of missing the point about what should make philanthropy special for the donor and the recipient (something that FJ Philanthropy is passionate about supporting and ensuring in our work with philanthropists and fundraisers, alike).  Having the capacity to give, is only one part of what constitutes a donor. Their passion and connection to the cause are equally, or arguably more important.  To that end, Wayne Rooney (and others) may be right to bemoan this specific attention, as too narrowly focussed.

There are going to be tough times ahead and, in addition to feeling the immediate impact of these extraordinary times, the sector will no doubt suffer from additional lag effects over the coming months, possibly years.  However, with challenge there is inevitably opportunity.  The lockdown has forced us to work in new ways, to innovate, think differently and maintain momentum.  One thing is for sure, 2020 will live long in the memory as an annus horribilis.