A rise in inflation, a fall in public funding and a government that is almost completely consumed by Brexit negotiations are among the challenges for charities over the next year, according to the National Council for Voluntary Organisations.
A report from the NCVO, called The Road Ahead: A Review of the Voluntary Sector’s Operating Environment, considers the major issues for voluntary sector organisations over the coming year.
It warns that 2017 is likely to present greater challenges for charities than last year, with households experiencing lower take-home pay and increased inflation.
"The combined effect of these trends, added to the fact that they are continuing after a number of already difficult years, will put even more pressure on charities and their volunteers, especially the smaller ones that have been struggling for a long time already," the report says.
A continued squeeze on public finances will put pressure on income from government sources, the report says, with 2018/19 and 2019/20 being particularly difficult.
"Charity income from government sources has previously tracked departmental spending fairly closely, so it is likely that it will continue to fall at least in line with the spending cuts," the document says.
"A particularly sharp drop in spending is expected between 2018/19 and 2019/20, which charities may wish to anticipate if they get a high proportion of their income from government sources."
The document also says that the bulk of the government’s attention will be focused on Brexit, which could make it difficult for charities to have their voices heard on other issues.
"As our government proceeds with delivering Brexit and enters into negotiations with the remaining 27 EU member states, Brexit will dominate the political agenda and almost completely monopolise the attention of decision-makers," the report says.
But it adds that the government will want an agenda outside of Brexit, which could present opportunities for charities in some policy areas.
It says the early signs are that Prime Minister Theresa May wants to build a more positive relationship with the voluntary sector than in the latter months of David Cameron’s government.
Data-protection legislation will be a key area for charities over the coming year, the report says, with a tougher enforcement regime being implemented by the Information Commissioner’s Office and preparations being put in place for the introduction of the General Data Protection Regulation in 2018.
The full version of the report is available only to NCVO members, but the umbrella body has produced an abridged version that can be accessed by anyone.