Rent rises forcing smaller charities to work at home

When you're strapped for cash, sometimes the office is the first thing to be cut back

Chief executive Amy Hanson of Small Steps Project
Chief executive Amy Hanson of Small Steps Project

Small voluntary organisations are often described as "kitchen-table charities", a term favoured in particular by William Shawcross, chair of the Charity Commission. Evocative though the image is, for many small organisations a dedicated work space outside the home is essential, but something that has become more difficult due to spiralling rents.

And as the aid charity for children the Small Steps Project discovered when it recently found itself homeless, fitting back around the kitchen table can be a squeeze. For the past four years it rented a small office in north London, in a building owned by the Ethical Property Company, at a heavily subsidised rate. But in July the company sold the office and terminated the contract. "The lowest rent we could find elsewhere was twice what we had been paying," says Amy Hanson, chief executive of the charity. "Small charities in particular are being priced out - if the best you can do is an office for £10,000 a year and you raise only £30,000, the fact that you are giving away a third of your donations is really off-putting for donors."

The charity's two employees now work from home, surrounded by stacks of boxes containing their paperwork and paraphernalia, and it has taken a toll. Hanson says it was not practical to ask the charity's three volunteers to work from home, so the charity has had to go without. "We've lost a huge amount of capacity and we're working 14-hour days to compensate," she says.

The former offices of the Small Steps Project

Hanson adds that the charity needs the space to store receipts and paperwork for HM Revenue & Customs, as well fundraising equipment. "We're charity workers," she says. "Our pay isn't huge, so we're living in shoebox flats as it is and we can't fit everyone around the kitchen table."

She says the world is going through a period of change in which "things are half digital and half not".

This means charities still have to use physical space for the storage, yet they are being told to prove they are not spending too much on their operating costs.

"I don't think any other organisation would be asked to work like that," she says. For now, says Hanson, the only option for the charity is to try to make the best of remote working. But she says: "If you put workers under extreme conditions, it affects their work."

Antonia Swinson, chief executive of the Ethical Property Foundation (a charitable sister organisation of the Small Steps Project's former landlord, but which has no connection to the running of the company), says this picture is increasingly common. The EPF's Charity Property Matters Survey 2014 found that 45 per cent of charities viewed property as the greatest risk to their survival, and more than 40 per cent experienced difficulty finding funding to cover the cost of premises.

"Rent increases are forcing charities to review their working practices and move toward alternative strategies such as hot-desking or working from home and hiring a meeting room once a week," Swinson says.

Many charities that rent from local authorities have faced rent hikes as councils look to plug holes in their own budgets by charging market-rate rents - at least one charity helped by the EPF had its peppercorn rent raised by 1,000 per cent. The situation might be better in rural areas, says Swinson, but in property hotspots such as London, Manchester, Oxford and Cambridge, charities are competing with each other, other businesses and a lucrative residential market for space. Her advice to small charities is to get smart.

"The key thing for tenants is that they should understand how rent reviews are calculated under existing leases," she says. "Then they need to negotiate better terms on new leases. Charities have more power than they realise, as long as they don't just panic."

For some charities, such as the Small Steps Project, negotiation is not an option and remote working is a makeshift solution. In these cases, there's also a major role for funders to play, Swinson says.

"Funders need to understand they should fund the cost of premises because, after staff, premises are the most valuable resource a charity has," she says.

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