Charities Aid Foundation’s second Social Landscape report, UK’s biggest survey of charity chief executives, suggests the challenges facing charities are not about to get any easier.
David Crosbie, CEO, Community Council Australia, said he has no doubt we are now looking at similar trends in Australia.
“All the previous drivers of growth in the Australian charities sector are stalling: government funding; philanthropy and giving; income from fees and charges. On top of this we have much more competition from other charities, and, as the money in the sector increases, more competition from for-profits and other types of ‘hybrid’ organisations,” he said.
“The Australian charities sector is bigger than ever before, but growth has stalled or gone backwards for most organisations in the sector. The new reality is stalling income streams, increased competition and growing uncertainty. All this on top of various forms of disruption where older models of service delivery are being challenged. It makes the role of organisations like CCA even more critical.”
Findings from survey:
Nearly one in five charities ‘struggling to survive’
Charities are restructuring, downsizing and joining forces with other organisations as they struggle to raise enough money to meet growing demand.
The survey reveals that almost one in five fear their organisation is struggling to survive, rising to more than one in four among charities with an annual income less than £1 million.
Rising demand and an increasingly tough financial environment may be pushing some organisations to breaking point. More than a third had to dip into their reserves last year to cover income shortfalls.
The research, carried out with ACEVO, reveals that charity leaders’ biggest challenges this year are generating more income and achieving financial sustainability, meeting demand for services and a reduction in public and government funding.
The overwhelming majority of charities saw an increase in demand for their services over the past 12 months while an ever greater number expect to see demand growing over the next 12 months.
However, charities are less confident than they were a year ago about their ability to meet it. Only one in seven Chief Executives said they were completely confident they would be able to cope with growing demand, while over a quarter had little or no confidence their organisation would be able to do so.
Charities are responding with a raft of efficiency and modernisation measures.
- Three in five say they either have restructured in the past 12 months or will be doing so in the next 12 months.
- One in three has reduced or is set to reduce staff numbers and down size the organisation over the same period.
- More than a quarter say they have or will be reducing front-line services. This compares to 19 per cent who said this was a case when the same research was carried out in 2015.
- One in ten has plans to merge with another organisation over the next 12 months. More than three-quarters say they have or will be partnering with another not-for-profit while almost half say they have or will be collaborating with a private sector organisation.
- Most are looking to the future with recent or upcoming plans to increase their social media presence, invest in new IT technology and online solutions and introduce new methods of giving.
John Low, Chief Executive of the Charities Aid Foundation, said “Almost everyone in Britain benefits from the work of a charity and the demand for their services and support shows no sign of abating. This means that all of us have a stake in how the voluntary sector is faring.”
“In 2017 charities are facing ever-growing pressure on already-stretched resources. They are less confident than they were a year ago that they’ll be able to meet this demand. In some cases they are being stretched to breaking point. Faced with tough times, charities are restructuring, reducing staff and in some cases adapting their mission,” he said.
“Charities remain optimistic despite an unpredictable political climate, a challenging economy and public sector funding cuts and are getting on with the job of improving people’s lives and make a positive difference in the years ahead.”