UK Charities ‘Struggling to Survive’ – A Wake Up Call for Australia

Almost one in five UK charities fear their organisation is struggling to survive, according to new research by international not-for-profit-organisation Charities Aid Foundation (CAF) in what is being seen as a wake-up call for Australian charities.

And The Social Landscape 2017 report, the UK’s biggest survey of charity chief executives, warns that the challenges facing charities are not about to get any easier.

“Charities are restructuring, downsizing and joining forces with other organisations as they struggle to raise enough money to meet growing demand,” the report said.

The survey revealed that rising demand and an increasingly tough financial environment may be pushing some organisations to breaking point.

“Almost one in five (18 per cent ) fear their organisation is struggling to survive, rising to more than one in four (28 per cent) among charities with an annual income less than £1 million (A$1.62 million). More than a third had to dip into their reserves last year to cover income shortfalls,” the report found.

The research, carried out with the charity leader’s network known as ACEVO, revealed the biggest challenges in 2017 would be generating more income and achieving financial sustainability (57 per cent), meeting demand for services (36 per cent) and a reduction in public and government funding (34 per cent).

The overwhelming majority of charities saw an increase in demand for their services over the past 12 months (82 per cent) while an even greater number expect to see demand growing over the next 12 months (86 per cent).

However, the report found that charities were less confident than they were a year ago about their ability to meet it. Only one in seven chief executives (14 per cent) said they were completely confident they would be able to cope with growing demand, while over a quarter (26 per cent) had little or no confidence their organisation would be able to do so.

Charities said they were responding with a raft of efficiency and modernisation measures:

• Three in five (61 per cent) say they either had restructured in the past 12 months or would be doing so in the next 12 months.

• One in three (33 per cent) had reduced or were set to reduce staff numbers and downsize the organisation over the same period.

• More than a quarter (28 per cent) say they had or would be reducing front-line services. This compares to 19 per cent who said this was a case when the same research was carried out in 2015.

• One in 10 (10 per cent) had plans to merge with another organisation over the next 12 months. More than three-quarters (76 per cent) said they had or would be partnering with another not-for-profit organisation while almost half (49 per cent) said they had or would be collaborating with a private sector organisation.

• Most were looking to the future with recent or upcoming plans to increase their social media presence (85 per cent), investing in new IT technology and online solutions (79 per cent) and introducing new methods of giving (59 per cent).

CAF CEO John Low said: “In 2017 charities are facing ever-growing pressure on already-stretched resources. They are less confident than they were a year ago that they’ll be able to meet this demand. In some cases they are being stretched to breaking point. Faced with tough times, charities are restructuring, reducing staff and in some cases adapting their mission.

“Charities remain optimistic despite an unpredictable political climate, a challenging economy and public sector funding cuts and are getting on with the job of improving people’s lives and making a positive difference in the years ahead.”

Australian organisation Good2Give, which is part of the CAF global alliance, said the results of the survey were a wake up call.

CEO Lisa Grinham told Pro Bono News: “We’re very aware that Australian charities are facing similar challenges. And while this offers yet another wakeup call, it’s important to remember that we have opportunities to innovate and think strategically about our future.

“Government spending will shrink in the face of Australia’s demographic shift over the next decade and demand for charity services will increase – it’s no secret that we need to do more with less.

“We saw the merger of Save the Children with Good Beginnings in 2015 and now with Hands on Learning Australia in the last week, we’re seeing exciting collaborations not only in the sector but with business to generate funds and deliver programs in new ways, and we are seeing increasing levels of giving in the workplace through our online platform.

“The Giving Australia 2016 [research] gave a very sound forecast of the giving landscape in Australia, and we know that one in three workplace givers are open to increasing their donations each year, that they want giving to be quick and easy, and four in five want to know what impact their donation has.”

She said being smart with how charities work takes investment, vision and collaboration.

“And technology can’t be an add on amidst that. It needs to be a key driver – something we have to stop struggling with as a sector,” she said.

“The CAF UK report states that optimism in the sector in the UK is low. But necessity is often the mother of invention and a great foundation for much needed risk – it’s time that we recognise the evolving landscape and have the tough conversations about how we shakeup who we work with and how we engage supporters with technology.”