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‘Charity sector was vulnerable to any crisis, let alone one as big as this’ says NCP

Charity think tank and consultancy New Philanthropy Capital (NPC) have published new research on the State of the Sector as the crisis hit.

Dan Corry, CEO at NPC comments:

“Charities are in crisis. Beyond the immediate funding shortfall, the economic and social changes brought about by Covid-19 will create a raft of new challenges that charity leaders will have to grapple with, from big questions around governance and longer-term funding models, to how to equip themselves to continue delivering services. But the crisis also gives us great opportunities. We don’t want or need to go back to all the ways we did things in the past. How radical we are will depend upon our appetite for bold change. Our research captures our sector in the final few months of calm before the storm, offering insight into its strengths, weaknesses, challenges and risks.”

Among the key findings is an over-reliance on government contracts which could leave charities vulnerable to austerity 2.0, with the issue compounded by the fact many subsidise these contracts with income from other sources, such as public fundraising which has all but collapsed.

Charities are getting better at digital but appear overconfident in their ability to use data. There is also a disconnect between words and deeds on user-involvement, with many praising when prompted but few mentioning it independently.

Tom Collinge, Policy Manager comments:

“Our research highlights of the issues charities were struggling with before the crisis, many of which will become critical now. It paints a picture of a broad and complex sector, wrestling with its relationship with government, funding challenges, technological change and its own diversity and representativeness.

We hope that understanding the trajectory the sector has been on since 2017, funders, philanthropists and policymakers will be more able to understand what happens in the crisis and help charities adapt to the new challenges they face, so they can keep serving the people who need them more than ever.”

State of the Sector 2020 captures the views of charity leaders at moments of critical importance, so that philanthropists, funders and policy makers can best support and use the power of charity to help people most in need and strengthen our civil society more broadly. For the second half of 2020, NPC will re-orient the programme to research the key challenges the charity sector is likely to be facing over the medium term due to the Covid-19 pandemic, produce solutions, and advocate for change and support.

The work was funded by Lloyds Bank Foundation for England and Wales, PwC, Barrow Cadbury Trust, Odgers Berndtson and the NPC Supporters Circle.