70% of charities in UK expect demand for charity services to grow

23 June 2016 Consultancy.uk

The charity sector has in recent years come under increased pressure from multiple fronts. The government continues to axe funding and public services; in addition, a number of public funding scandals have rocked the reputation of the sector. A new study reveals that while the sector is stronger than last year, it expects to face continued pressure for the coming year – on the back of growing demand for charity services and new rules around fundraising.

The charity sector has undergone a period of uncertainty as austerity measures at government and local government level cut into their funds, at a time when services to those with considerable disadvantages are also being reduced or cut due to austerity measures. In addition, the sector has come under considerable scrutiny regarding fundraising and the subsequent use of funds, with various new regulations and increased focus on the governance of charities and the role of trustees — all factors that will affect the changing fundraising rules.

A new report by PwCthe Institute of Fundraising and the Charity Finance Group, titled ‘Managing in the new normal 2016’, looks into the current funding landscape for charity organisations in the UK as well as their biggest concerns and barriers for the year ahead. The report is based on responses from 300 charities, of which 27% had incomes of more than £10 million.

Increased demand for charity services

Meeting demand
The research finds that the vast majority of the charities surveyed have seen an increase in the demand for their services (67%) over the past year, while for the coming 12 months 70% are expecting demand for their services to increase. Over the 12 months under 20% of charities saw no increase in demand and relatively few charities are expecting less demand for their services in the coming 12 months (under 10%).

Sufficient resources to meet the challeng

Furthermore, the research asked respondents to indicate whether they are able to meet the demand on their respective services in the coming 12 months. The number of organisations that feel they cannot meet the demand has fallen slightly from last year, at 27% and 29% respectively. Although many respondents expect to have to deliver more services with fewer resources, the number has fallen somewhat from the previous year. The number of organisations that believe they are able to meet demand is up slightly to 30%.

Most important factors for 2016

Important factors
The most important factors affecting charity players in the UK in 2016, according to respondents, are 'public funding cuts to services', which comes out on top again at 35%, followed by reduced grant funding from public bodies. Coming in a close third, however, is ‘reputational issues for the charity sector’ relating to the negative media attention on the use and governance of charitable funding. Other factors that highly concern charitable organisations are ’maintaining public trust and confidence’ and ‘changes to the regulations of fundraising’ both scoring above thirty percent. The areas of least concern include ‘pension deficits’ at around 10%, ‘the future of the Charity Commission’ scoring under 10%, and ‘development of the social investment market’ at around 5%.

Caron Bradshaw, Chief Executive, Charity Finance Group says “Charities are facing a number of challenges both financial and reputational, but this survey is encouraging as it shows charities taking seriously the need to meet these challenges. We need to give charities the time and space to adapt and have confidence in charities ability to grapple with them.”

Challenge for the future

Increased challenges
The partners also asked respondents about the biggest challenges they faced for the future of their organisation, on a five point scale. Top of the list is ‘maintaining public trust and confidence’, at almost a four, followed by ‘reputational issues for the charity sector’ which also almost reached a four, up from a two the previous year. An ‘increased demand for services’ was up slightly on the previous year, also at nearly a four.

The decrease in grant funding has become a much more acute issue for respondents, up from around a three last year to close to a four this year. Public funding cuts have also become a more acute issue, up from almost a three to almost a four. The ‘increased expectation from donors and other stakeholders’ too has risen, from almost a 2 to around 3.8. Most of the categories have seen a significant increase on the previous year, suggesting that charities are taking issues that have been highlighted and uncovered seriously.

Steps in response to increase scrutiny

Steps taken
When asked what kinds of responses charities have made in relation to increased scrutiny of the sector, the top response was ‘reviewed consent statements on donation forms’ at 40% of respondents, followed by ‘improved internal compliance’ at 38%. The third most cited step was ‘improved ways in which your donors/supporters can manage their communication preferences, at around 35%. Around 33% of respondents cited ‘increased trustee involvement/oversight’, while 30% ‘reconsidered the effectiveness of governance and decision-making’. The least cited defined response was ‘enhanced disclosure of financial information’, at 17% of respondents.

Peter Lewis, Chief Executive of the Institute of Fundraising says “This report shows us that the majority of charities have taken action to respond to public concerns about fundraising practices, and that the fundraising community is committed to achieving the highest standards. The report also shows that the public are continuing to in their generosity to the causes they care about, contributing to make the world a better place both here and abroad.”

Profile

More news on

×

OC&C and PwC support The Access Project with growth

13 December 2018 Consultancy.uk

The Access Project helps disadvantaged young people get into university. In recent years, the programme has extended its reach exponentially, thanks in part to pro-bono work from strategy consultancy OC&C and Big Four firm PwC, as well as a partnership with private equity charity Impetus-PEF.

London-based non-profit The Access Project is an education charity that helps bright young people from disadvantaged backgrounds beat the odds and secure places at top universities such as Oxford and Cambridge, where they make up less than 4% of the intake. A young person who has participated in The Access Project’s programme is more than twice as likely to go to a top university when compared to another student with the same academic track record and background.

What began as a programme operating in a cluster of schools in North London, is now a multi-site programme with operations in the East and West Midlands. The Access Project has expanded from 15 to 31 schools, more than doubling the number of young people the organisation works with from 530 in 2014 to 1,240 four years later. To facilitate growth, The Access Project partnered with Impetus-PEF, a charity which helps organisations for young people from disadvantaged backgrounds become high performing organisations.

Impetus-PEF goes about this by providing strategic core funding to improve capacity and performance, as well as dedicated support from an investment director, while supplementing this with skilled volunteer support from a 350 strong network of the top UK corporates. Impetus-PEF has a portfolio of 17 charities who it supports to improve their impact, assisting them with the scaling up of operations that more disadvantaged young people can benefit. In this instance, working with The Access Project, Impetus-PEF helped assess the funding opportunities open to them and to diversify their funding model. With turnover of £1.8 million, The Access Project now sees money coming from schools, corporate partners, major donors, grant-making trusts, and universities.

The Access Project has expanded on all fronts with the help of Impetus-PEF

On the road to this growth, Impetus-PEF enlisted strategy consultants OC&C to undertake a significant pro bono project looking at how The Access Project could access funding from university widening participation budgets (this is dedicated funding for widening university participation mandated from universities charging the higher level of fees). A member of Impetus-PEF’s fundraising team, who specialises in high net worth donors, also worked with The Access Project on their donor engagement strategy.

Meanwhile, Impetus-PEF linked The Access Project up with high quality IT support via its pro bono partner PwC, to help build an IT platform which could support the new data gathering and make it as easy as possible for staff to track progress in a more live way, for every single student enrolled in the programme. PwC worked predominantly with the Impact Manager at The Access Project to assess their performance management requirements and translate this into the technical needs for the new IT system. As well as helping with the design of the project, PwC helped The Access Project to choose the right supplier.

Growing impact

The involvement of Impetus-PEF and the consulting firms seems to have significantly boosted The Access Project’s impact and reach. In 2014, when the Impetus-PEF was first engaged, just over half of the pupils the charity was working with were from disadvantaged backgrounds, while 66% of those applied to a selective university and 33% got in. By 2017, over 90% of The Access Project pupils came from disadvantaged backgrounds and of those, 85% applied to a selective university, and 53% got in.

Remarking on the next steps, Investment Director, Sebastian Ergas said, "We’ve been pretty internally focused so far. The partnership will now shift. We needed to develop the programme and demonstrate results. Now it's time to look at future growth."

To this end, in 2018, Impetus-PEF already committed another £900,000 to The Access Project, to take the partnership to 2021 and to bring new funders. The charity plans to double again its number of students, with the aim of working with 2,500 by 2021, across 50 schools, and moving into a fourth region.

Commenting on the growing role of The Access Project, Chris Millward, Director of Widening Participation and Fair Access at the Office for Students, commended The Access Project for “demonstrably helping young people to unlock their potential…Their programme … is a great example of the sustained, targeted, collaborative and robustly evaluated work we need into the future.”