Optimism Amid an Ever-Changing Landscape

by | May 31, 2023 | Charity Stories, Community

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When we use the term “challenges faced by small charities,” this is not a new phrase or one that many of us haven’t heard before. Rather, it has become part of our everyday language, forms part of our reports, and plays heavily as headlines in the news.

However, today’s challenges are different.

Today’s challenges affect everyone, and charities are once again raising their game to ensure that they, too, weather out the storm.

This is a dramatic introduction to a blog post. However, we want to highlight the severity of these challenges, the current landscape that small to medium-sized charities are currently operating in, and what charities are doing to continue in their efforts to deliver on their charitable objectives.

The current landscape for the charity sector

To date, one of the biggest changes in the charity landscape is the fall in the number of new charities registered with the Charity Commission.

Reports from the Charity Commission have stated that figures show the lowest number in over 33 years, with 4,021 registered charities in 2022, compared to 4,315 in 2021 – well below the yearly average reported at 5,415 the decade before.

The number of charities removed from the register has also risen to almost 6,000 in 2022.

Due to these figures and the sector’s changing landscape, the Charity Commission is now engaging more with trustees and working harder to provide clearer guidance and structure for incomplete applications or those that fail to outline the charity’s charitable purpose clearly.

Recruitment and retention are still a significant challenge within the charity sector, with reports showing that over half of small to medium-sized charities have open vacancies, and over 80% of these are proving extremely difficult to fill, both Trustees and staff. (Make sure to check out our post on the `Challenges of Trustee recruitment. `)

Stress, burnout, and large workloads still feature heavily for charity managers who are shouldering the burden and responsibility of more than just the average “manager’s job” post. It’s easy to say that this is simply the nature of the beast due to the sector we operate in, however, there are other ways, and outsourcing services to specialist providers (like Beyond Profit) is one of these solutions.

Specific Challenges

There is a reduced ability to meet demand.

It is fair to say that pressures are high, and currently, many small charities simply don’t have the funds to meet the current service demands. This makes running a charity feel overwhelming as charities look to use reserves to cover core costs. Others have opted to reduce the volume of services they provide. However, there comes a point where there is no room to cut further.

Cost of living crisis.

The continuing cost of living crisis is affecting everyone on a global scale, and the impact that this is having on charities is we are seeing fewer charitable donations and less funding, with charitable giving currently below pre-pandemic levels due to the squeeze on household budgets.

As well as this, charities have also seen a rise in their own operating and energy costs. With energy costs a big concern, Governments are looking at ways to step in and support small charities further with energy relief and price caps.

Then we see the dramatic effect the recession has on corporate donations or trusts and foundations as there is a reduction in grant-making capacity, as well as a reduction in the value of charity contracts (with many of these contracts already underfunded, to begin with.)

The staffing crisis is still rising.

Due to the current struggle for recruitment in the charity sector, charities are struggling to meet the demanding and increasing workloads. However, the willingness to volunteer is still high as people want to feel they are actively doing something to cause positive change rather than just giving money; charities must tap into this new volunteer behaviour and utilise skills and resources wherever possible.

What can you do?

It almost seems like an impossible question to answer. However, we said “almost” but not quite.

For all the landscape still appears to be a little unsettled and the future a little cloudy, charities remain optimistic. They are putting in place sustainable solutions now to provide them with resilience for the future.

For example:

Look to increase your supporters’ engagement by providing online and offline ways for them to become involved, help with fundraising, donations, etc.

Make sure you’re implementing full cost recovery. This is HUGE. And we can’t stress the importance of full cost recovery enough. It’s essential, as a charity, that you try to recover some of your core costs when submitting your grant applications. Your charity does not run on goodwill alone, and your people, those working tirelessly behind the scenes, need to be accounted for in your costs. It’s the best way to improve financial sustainability and resilience (read our full cost recovery article for more detailed information HERE).

Look for collaborations that work for you and your charity. More and more charities are working together to find the right, and best connections that allow everyone to move forward, meet service delivery demands better, improve service offerings, pull in specialist resources and knowledge, and more.

Develop good, strong, detailed governance – trust us, charities with good governance make better decisions as they have clear insight into risk and finances, making your board more effective in its approach to management and the strategic direction of the charity.

What can Beyond Profit do?

At Beyond Profit, we’re agile in our approach to business, with community and charity at the heart of what we do.

We continue to move with the changing, fast-paced charity landscape to help charities navigate and put in the most effective foundations to ensure your continued success.

We help more people and charities than ever with their finance and governance requirements.

Whether this is outsourcing all or some of your finance elements or helping you with trustee recruitment and training, our team is here to help.

Book a discovery call with us today.

Message from our founder….

“Hello, it’s me, Emma, Founder and Managing Director of Beyond Profit. As Beyond Profit turns 6 in June, I want to use this post as an opportunity to say thank you for supporting Beyond Profit and supporting me over the years. As we head into our seventh year, we’re optimistic and excited to share further news and updates with you (watch this space) and we look forward to continuing to work hard to support your charity in 2023 and beyond”.


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