It’s both the best and worst possible timing for the NCVO to be releasing their well-respected annual Civil Society Almanac. Unfortunate, in that the data drawn from 2017/18 paints a picture of the sector before the Covid-19 pandemic – which feels like a lifetime ago, and a world away from the current challenges we face. Yet at the same time, as civil society attempts to take stock of the immediate impacts of the crisis, and plan now for recovery, it’s helpful to reflect on our underlying strength and trends.
At a superficial level, you might conclude that there is “Before Covid” and “After Covid”; a pre-2020 sector in reasonably good health, reporting continued income growth across a range of sources (from investments to public fundraising and government funding), expanding workforce, falling liabilities and increasing contribution to the economy; then post-coronavirus, a dramatic shock to the system – facing almost certain contraction across the board, with greatly reduced income, widespread redundancies and a much smaller sector. This time next year, there will be fewer charities, and those charities will have far less resources to deliver their missions.
But dig deeper, and there’s evidence to suggest that the underlying picture was already challenging before the pandemic hit, and the issues we need to address are not all born in 2020.
Overall income growth has been driven primarily by public support, representing nearly half of all income. However, half of the growth was due to legacies (largely due, incredibly, to just two individual bequests), with other sources struggling to increase. And that overall growth year-on-year has been slowing – according to other recent reports, in fact already may have been declining for many fundraising income streams. Which has been increasing the dependency on growth from earned income – particularly trading activities. Meanwhile, government income has been static, falling to its lowest ever proportion of the income mix – and again, there are lots of signs that statutory income is in decline, squeezed by a decade of austerity measures. Grant making fell slightly from the previous year, and the growth from investment assets was also slowing. Put together, considering the trends over the past 5+ years, there was every sign that the charity market was at best slowing in growth, and potentially more likely, beginning to contract by the end of 2019.
Which suggests that civil society was already particularly vulnerable to any further economic shocks – and illuminates the scale of the challenge in recovering from the direct impact of the coronavirus.
Unpacking this further: charities are increasingly dependent upon public support, which has been slowing and is now likely to be under further pressure as we move into economic recession, particularly as consumer confidence is likely to fall. In the first months of the lockdown, the closure of charity shops has had a dramatic impact on many voluntary organisations – the almanac highlights the importance of earned income and trading activities; the return to the high street has a long journey ahead. Investment values are falling rapidly, and many charities will also have needed to lean heavily into reserves. Grant making will be under pressure, and we are yet to understand the government’s spending plans as they begin to tackle a level of national debt that is greater than the size of the economy. Having grown to over 900k employees by 2019 (3% of the UK workforce), there is high likelihood that voluntary organisations will need to make cuts to address both short- and long-term financial concerns – which will further weaken the capacity of charities to turnaround their position. And the “voluntary” sector has always been hugely dependent on “volunteering”; while the report suggests this has been relatively stable, it’s noteworthy that people aged 65-74 are most likely to volunteer on a regular basis – an age group that have been placed at higher risk by Covid-19 and are more likely to be shielding for a sustained period – and so we may be facing a significant drop in our volunteer base too.
When you combine the underlying vulnerabilities of the sector with the immediate and most-likely sustained impacts of the pandemic, it is clear that the first few months of UK lockdown have only taken us as far as Basecamp – there is still a huge mountain ahead of us to climb.
But I would argue, the long-term trends point clearly to the need already for our sector to transform – even before we take into account the effects of Covid-19. It is my firm view that there has been no great decline in public concern for social change, no dramatic drop in altruism, philanthropy and activism. People are not less motivated to do good – in fact, I’d suggest all the demographic and social indicators point to the opposite: new generations are more inclined to positively change the world than ever before. The challenge for civil society isn’t to generate concern for our causes – it’s to be relevant, and find new ways to harness the passion and desire to act that already exists. And it is here, in the transformation of our sector and building of movements for social change, that we find the best path to not only recovery, but envisioning a better society.
We have learned so many lessons already in the immediate aftermath of the Lockdown. How to connect people, communities and causes, to harness digital technologies, approaches and mindsets to innovate at pace and scale; to re-think old assumptions about what is possible, how things should be done; to understand what is genuinely most important – in our lives and our work; to meaningfully prioritise and focus our impact.
Much of civil society is in survival mode at this moment in time. There is a very real danger that the pandemic will accelerate the challenges we already faced, and hasten the decline of the charity sector. But it might also serve as a pivot point; the catalyst we needed to tackle the systemic issues that were already holding us back. We may be a smaller sector, in terms of size and budgets, in the immediate future; but that doesn’t necessarily mean we accept having less impact. The imperative is to seize the lessons of both the current crisis and the longer-term trends – laid out clearly in the Almanac – and turn this moment into an opportunity to transform how we deliver positive social change. We will need to harness the passion of people and communities, secure greater support from government and business, ally and partner with social movements; and ultimately, dare to believe that we can, will and must emerge stronger from this crisis.