Charities were stretched too thin before the pandemic, says NPC report

State of the Sector 2020, published today, says a telephone survey of the sector before the health crisis found that many were planning to do more, despite on overall modest increase in revenue

Charities were stretching themselves too thinly even before the coronavirus crisis hit, according to a new report from the think tank New Philanthropy Capital.

The report, State of the Sector 2020, which is based on 300 telephone interviews with small, medium, large and major charities between November and January, says that charities have experienced increases in their workloads in the past three years, while funding has remained static. 

The survey asked charities how much of each activity – such as delivering services, products or public sector contracts, public-facing campaigns, funding or doing research and running buildings or other physical assets – they were doing and how much they expected to do in the future, then compared the answers to those given in the previous survey in 2017. 

In 2017, most respondents said they would do the same or more of each activity in the future, and the 2020 report says “answers charities gave this year indicate that this prediction came true”. 

But when asked if they expected their workloads to increase again in future, most charities said yes, with the biggest jump coming in building community capacity, which rose from 46 per cent expecting an increase in 2017 to 55 per cent in 2020.

“We know from the NCVO Almanac that the charity sector is growing its revenue, but only by 2 per cent across the sector in the last year that we have data for,” the report says. 

“It is hard to square this modest overall increase in sector income with the ubiquity of charities telling us that they expect to do substantially more and that they are not planning on scaling anything back. 

“This suggests that, even before coronavirus, charities were spreading themselves ever thinner across a broadening number of working areas.”

The report says it cannot quantify the risk this poses, but it adds it is logical that already overextended charities would be hit hardest by a sudden explosion of demand and a reduction of funds.

Speaking at a virtual launch event for the report today, Tom Collinge, policy manager at NPC, said: “In the current crisis, we’re all very worried about the high levels of demand charities are facing and whether they’re able to cope for the people that need them. But what this survey shows is that, based on the 2017 numbers, charities were doing more of everything before the crisis. Not only that, they were planning to do even more of everything in the future. 

“There’s a worry that even before the crisis charities were spreading themselves too thinly. This is a serious concern: that charities were in a weaker financial position going into the crisis than people realised.”

Collinge said it was also a concern, given the huge increase in demand that was likely if a recession came after the pandemic crisis.

The report says there was a “widespread agreement that public trust in the sector has fallen”, with only 5 per cent of respondents believing that public trust had not dipped in the past few years. 

But the highest proportion of respondents (45 per cent) said they felt it would not affect their operations, although 23 per cent thought it could lead to a fall in fundraised income.

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