Navigating the Changing Tides: A Look at the State of the Sector

NPC (New Philanthropy Capital) recently released their State of the Sector Report 2024, you can see the full report, as well as their summary in this post. As they suggest in their post, I wanted to join the debate and look at what help the sector needs to move forwards into the future.

Here are some of the headlines as I interpreted them:-

The sector is significantly underfunded as a direct result of long term under funding of public sector contracts.

This is something we have always know, but I feel as a result of Covid, and then the cost of living crisis, its become more obvious. I expect over the coming year, we will start seeing more and more charities having to make difficult decisions about service delivery. The wiggle room that trustees may have had in the past is no longer, as levels of reserves have dropped even further after COVID and the Cost of Living crisis.

59% of the. I believe a significant cause of this is that most people don’t generally understand the governance around the requirement to ensure all work fulfills their objective. There is also an expectation from the public that charities should be there to pick up the pieces, regardless of the context they are working in.

I think part of this perception is as a direct result of the success charities had in adapting during the Covid Crisis. This has continued in the Cost of Living Crisis.

However, we also have to bear in mind the political and economic context. People are currently faced with the largest tax burden in years. Mortgage rates have soared and wages have not moved with them. This scenario means more and more people have less cash in their hand, and greater expenses, despite no change in circumstances.

People who previously didn’t need support, are now in a place that they do. Society also seems to have changed since COVID, and people are no longer as ashamed to be asking for help when they need it. All of these factors put a huge amount of pressure on the whole system.

The majority of the public, 59%, want the government to work in partnership with charities more

I think a significant part of this perception comes from the fact that most people probably don’t recognize just how much these entities already collaborate.

There seems to be an assumption by the public that charities are largely funded through donations and grants. This assumption could be fuelled by an unwillingness from the public to admit that they are funding these services, which are often underfunded in many cases.

I’d like to see a greater partnership working in public. It would be ideal to have local boards made up of local charities. They could not only share real stories about the ground reality with the government and local authorities, but also identify areas of need.

Additionally, such boards could provide opportunities for different organizations to collaborate and address the challenges our communities face. It would be wonderful to see this model elevated to a national level, with community groups advising the devolved nations on project funding.

I’d also like to see more honest conversations between public sector funders and service providers about the length of contracts awarded. It needs to be recognized that 2-year contracts often do not provide enough stability to achieve the full benefits of a service.

It's great to see some public sector funders recognizing this issue with more 10-year contracts being awarded. However, these contracts should be monitored and evaluated in new ways to ensure progress is made, even if traditional performance indicators aren’t demonstrating it.

Charity leaders are having fewer strategic conversations than they were three years ago.

This is concerning, but there seems to be a clear reason for this decrease.

Firstly, charity leaders spent most of COVID firefighting. They were constantly adapting their organizations, at times on a week-to-week basis, all while trying to balance their usual responsibilities and being pulled in all directions.

COVID impacted everything to such an extent that CEOs were forced to get involved in riskier conversations that they normally wouldn’t. Two years later and the leaders are just beginning to breathe and embed some of the lessons learned from COVID into their regular operations, adapting to the new world.

Just when charity leaders started adjusting to the post-pandemic environment, they were hit with the cost of living crisis. This crisis has strained services for charities as much as COVID did, adding further pressure onto an already struggling sector.

Many charities had already exhausted their safety nets during the pandemic and had limited options to navigate the cost of living crisis. These consecutive crises forced many charities to rethink and restart their business plans without having the proper capacity to do so.

As a result, many charities have had to put strategic thinking on hold to ensure they could continue delivering essential services to the public.

Help What About Now and Into the Future...

Now looking at the sector through this context, helps outline just why I set up the consultancy. We want to help !!! 

Our mission is to help charities to increase their impact by using us as experts in their problems and challenges, and helping them identify effective strategies for moving forwards. Our main aim is to help charities as ‘critical friends’ and provide valuable insight and recommendations for helping the charity to achieve mor. We want to make each charity we work with, the best it can be, and help the most clients and service user’s they can. We want to help charities succeed in everything they do

We’ve got loads of ways that we would help you and you’re organisation to move forwards. From working with you to develop rate cards for your services, to ensure that not only you’re able to demonstrate the true cost of your services to you’re funders and donors,  and move a step forwards towards ensuring you get full cost recovery. They are also great tools for helping community fundraisers to tell the story of the charity in ways that mean something to the public.

One of the other services we are proud to offer is to help you thought the strategic planning process, from facilitating workshops, and consulting your stakeholders, to conducted detailed research to help you develop a strong risk management process, where you truly understand how different events could impact you. We can be as involved in the process as you would like, from being there as a facilitator, to providing you’re organisation with the extra capacity you need and developing the full strategy, involving you and your stakeholders in a carefully planned and managed so as to make as best use of time as possible. 

We’d love to chat to any charities out there who might be interested in exploring the help we could offer you. An initial meeting is completely free, and is designed as a chance for us to get to know each other, explore to together the challenges you face, and start to consider the support ewe may or may not be able to offer you. 

Check Out Our New Website

Take a look at our website to understand a little more about, and while you are there, why not complete our Free Self Assessment Health Check. It’s 14 questions, and provides you with a detailed report outlining some suggestions about changes you could make to improve your organisation. You can also catch up on all our blogs from the last couple of months. As exploring our training opportunities, which we are beginning to role out.

I’d like to finish on a positive note, by saying how incredible everyone is who works int he sector from CEO’s to Trustees, Volunteers to Front Line Staff. I don’t think the UK would be bouncing back in the way it is currently, if it  wasn’t for the third sector. Having almost four years doing whatever you can to keep NPC (New Philanthropy Capital) recently released their State of the Sector Report 2024, you can see the full report, as well as their summary in this post. As they suggest in their post, I wanted to join the debate and look at what help the sector needs to move forwards into the future.