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The resilience of the charity sector

Posted on 08th February 2021 in Charities and Social Enterprise

Posted by

James Evans

Partner and Solicitor
The resilience of the charity sector

Tozers’ charities team has been fortunate to have co-hosted or attended several roundtable discussions among charity trustees and senior managers in recent weeks, where they have shared their experiences of what has been a hugely challenging last 12 months for the charity sector.

Drawing together some of the main themes emerging from those discussions, it is certainly not all doom and gloom, and it has been very encouraging to hear of many positive developments despite the many challenges.


Resilience of the charity sector

The charity sector has clearly demonstrated significant resilience despite facing huge financial and operational challenges, limited government help and  boards and senior management being placed under significant strain.  It is encouraging that many charities are still reporting having maintained service provision and having had a reasonable year financially, although in some cases that may have been helped by being able to access emergency funding streams which may not be available in the longer term.


Agility and rapid change

What is really striking is how many charities have been able to make rapid changes to strategic and operational plans and quickly establish new ways of delivering services and supporting their communities. Given the considerable economic uncertainties which lie ahead, retaining the ability – and reserves- to respond with agility to future ‘shocks’ will remain vital.


Bold decision making

Most trustee boards and charity senior management teams have faced constant challenges in the last 12 months and have really had to step up and make some very difficult decisions. We have noticed a trend of charities ‘not wasting a good crisis’ and taking the opportunity to make significant changes to their operations and structures to ensure they are better equipped to respond to the future environment they expect to operate in once lockdown restrictions are eased.

In many cases this has been by way of accelerating the implementation of existing plans already in the pipeline- especially digital strategies, or ‘grasping the nettle’ and making changes which the charity had already recognised were inevitable and were long overdue.


Innovation and commercialisation

As part of exploring new funding streams some charities are seeing this as very much the time to invest, and we have seen some establish very innovative new commercial ventures as a means of replacing lost income from fundraising and trading activities no longer available to lockdown restrictions, as well as looking to develop new income streams from existing assets.


Improved engagement

We have heard encouraging reports from charities having had to develop new ways of engaging at board level and with donors, volunteers and beneficiaries within the limitations of home working and online communication. Whilst maintaining staff and volunteer morale remains a challenge, in many cases charities are reporting benefits of having developed better engagement at board level and with key stakeholders. This has included funders and commissioners developing a deeper understanding of the charity’ work, and opportunities to attract new supporters, including facilitating additional trustee recruitment.


Reinventing retail

Views on the future of charity retail seem to be mixed but there still seems to be some life yet in the traditional high street model, enhanced by increased use of digital technology.  Some charities still plan to re-open their existing retail operations once lockdown restrictions allow and still see strong potential in traditional ‘bricks and mortar’ offerings, whilst others are revisiting retail strategies, moving to digital platforms and their retail presence will begin to look quite different as we move out of lockdown.

Geography seems to be playing a key factor in the south west, with charities likely to want to maintain an existing physical presence in the more popular tourist destinations where footfall is expected to remain high.


Collaboration across all levels

Although there have been plenty of examples of effective collaborations at local and at national levels in response to the pandemic, not least the #nevermoreneeded campaign, we haven’t seen much evidence at a regional level of significantly increased appetite for collaborative activity as yet, although we think this is likely to change and that collaboration will be high on board agendas in the coming months.  

This is not least in the healthcare arena where a number of new collaborations are being forged largely out of necessity as a response to likely future changes in the how the commissioning environment will impact VCS organisations.

Certainly it would be good to see more collaboration happening from positions of strength, as opposed to a last resort response to financial adversity.

Having said that, we have certainly seen a number of ‘forced’ charity mergers recently resulting from concerns over financial sustainability. Sadly, there have also been charity closures resulting from the financial impact of the pandemic, which has led to services being transferred to other organisations where possible.


Pragmatic regulation

As a final note we would also recognise the helpful role Charity Commission staff have played in facilitating charity responses to the pandemic, by taking a flexible and pragmatic approach where possible on issues such as broadening charitable objects, extending filing deadlines, re-purposing restricted funds, and the expenditure of capital endowment funds.


Find out more

Tozers co-hosts a number of regular roundtable opportunities for charity leaders to share experiences under ‘Chatham House’ rules. If you would be interested in receiving details of future events, or would like to know more about our services to charities, please contact James Evans.

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