The recent announcement that Breast Cancer Haven would be suspending services was a shock to many.
With such a specialist service, the impact on beneficiaries could be felt hard indeed.
This appears to be the first widely publicised case of a large charity closing because of the impact of Covid-19. At NPC, we’re worried that health charities are being hit particularly hard by this pandemic.
Throughout 2020, we tracked publicised redundancies in the British charity sector.
We found that about a quarter of them were in health charities, including some of the biggest cancer charities in the country. One charity predicted it will take five years for its income to recover.
This is a scary situation to be in.
With the NHS backlog overflowing, we can expect far greater problems from undiagnosed health conditions in the years to come. The fraction of support that health charities have received so far is unlikely to be enough.
The Breast Cancer Haven story is also unsettling because of its speed. It is rare to see a charity suddenly shut down like this – more often charities shrink, or slowly fade away.
We hope it isn’t the herald of things to come, and that reopening the economy will help improve revenues and reduce needs.
But we’re not out of this crisis yet. Even using reasonable assumptions on vaccines and lockdowns, the Office of Budget Responsibility has projected no full “bounce back” until later in 2022.
Covid-19 has put charities of all sizes under severe financial strain, with the NCVO finding that 44 per cent have narrowed the services they offer.
Our State of the Sector research shows how the needs served by an already overstretched sector have increased and intensified. It’s tougher to secure funding, and rapid change makes it hard to deliver on funding requirements.
For some, including household names, the threat is existential.
At the height of the pandemic we identified 27 of Britain’s largest charities where demand for their services was expected to rise as a result of Covid-19.
We reviewed their financial position and found that without help, they faced an estimated £500m shortfall.
Even with the furlough scheme, redundancies, costs savings, fundraising drives and government support, our subsequent interviews with 17 of these charities still indicated an estimated £155m to £200m hole.
Reserves may not be enough to see charities through. The Public Accounts Committee recently heard that charities with incomes over £500,000 without any reserves to draw upon rose from nine per cent in April 2020 to 28 per cent in March this year.
Charities fulfilling contracts for local and national government have been better insulated, whereas charities that rely on public fundraising, charity shop trading or social enterprise activity – such as cafes and training – have been far more exposed to significant losses.
As Britain reopens, we all need to play our part in helping charities recover lost ground.
Covid-19 is changing the sector, but in divergent ways. Some organisations have narrowed the range of services they offer, while others are broadening their activities to meet new needs or to reflect existing needs becoming deeper and more complex.
Very few charities have had time to think about the impact of these shifts on their beneficiaries or themselves.
Important long-term planning is being stripped back to meet emergency demand. It might be difficult, but charities and funders need to be thinking about the long-term strategic implications of the shifts they are making.
This could mean asking what impact new forms of collaboration have had, and what opportunities there are to build on this. Or it could mean reflecting on the agility the pandemic has forced us to adopt, especially in terms of the digital delivery of services, and what potential this way of working could have for future strategy. It could mean grant-makers making the shift toward flexible funding permanent.
These are some of the big questions we’re asking as part of our Rethink, Rebuild initiative.
Sadly, Breast Cancer Haven is unlikely to be the last big charity to close. With reserves running low and bigger challenges ahead, we need a new way forward if we are to continue to be the social sector Britain needs.
Dan Corry is chief executive of the charity think tank and consultancy NPC