2018: what’s in store for Scotland’s third sector?


Janet Hamblin, head of charities in Scotland at accountants RSM, looks ahead to what 2018 has in store for the third sector

5th January 2018 by TFN 0 Comments

Engaging with Generation Z

Generation Z has reached adulthood and is now ready to volunteer.

Having never experienced a world where the internet and social media didn’t exist, engaging with this new workforce in the right way is crucial for charities as it will bring clear benefits, such as improving digital fundraising skills.

The more innovative charities will offer a highly personalised and increasingly interactive experience for their beneficiaries and funders that constantly reflect the latest digital advances.

Trustee boards will also need to embrace working with Generation Z – far too many boards are dominated by volunteers at the other, older, end of the demographic scale.

Board leadership through identifying a clear vision of how digital skills can help to achieve a charitable mission together with inter-generational volunteering will give charities the best chance of success.

This is vital as the charity sector in 2018 will represent an increasingly diverse population with wide-ranging needs.

Having signed up 15 enthusiastic Scottish charities and over 50 very motivated students in November 2017 to take part in our Young Charity Board Initiative organised by RSM, Santander and Edinburgh Napier University’s Get on Board team to help train and match young potential trustees with charities, we hope initiatives like this will help to drive real change to improve diversity on charity boards in the future.

Janet Hamblin

Janet Hamblin

Concerns on the stability and long-term viability of social care are likely to become more vocal in 2018

The full impact of GDPR

We will see the full impact of GDPR (General Data Protection Regulation) in 2018. Significantly smaller mailing lists will make it more difficult to target donors through traditional means, leaving charities to undertake smaller, more frequent, marketing initiatives and make more effective use of social media.

For those unprepared charities (where have you been in 2017?!), the required changes, together with staff training and the associated management time are likely to significantly increase costs next year.

The fall out of sleeping on the job

Sleep-in arrangements are widespread in the social care sector. When the minimum wage was first introduced in 1999, anyone employed to work overnight such as a carer, was entitled to a flat-rate allowance.

But, following recent tribunal cases, the government clarified its guidance in October 2017 to state that these organisations must now pay the minimum wage throughout the shift, meaning overnight carers would be entitled to more than their flat-rate allowance.

Social care providers have been given a year to identify how much they owe workers who were employed as sleep-in carers but not paid the minimum wage. HMRC also launched the Social Care Compliance Scheme to support organisations in identifying and settling outstanding wages by March 2019.

The issue has caused much concern in the sector with many charities arguably facing insolvency as a result of the need to pay past liabilities.

The government continues to explore options to minimise any impact on the sector but has to date simply extended deadlines rather than creating any financial support.

Concerns on the stability and long-term viability of social care (as a result of financial penalties and wage arrears) are likely to become more vocal in 2018 with further action required to bridge a liability for the sector which runs into the hundreds of millions of pounds.

Barclay Report and the Scottish budget backlash

While there was a sigh of relief from leisure and cultural venues run by the arms length bodies local councils (Aleos) when Derek Mackay announced in the Scottish budget that the Barclay Report recommendation to cease their charity relief from non-domestic rates would not be implemented, it looks as if there will be ongoing discussion about the eligibility of future Aleos for rates relief which we expect to impact on the number of new Aleos being established.

However, the proposal to remove the charitable rates relief from independent mainstream schools is inevitably sparking a raft of comments and discussions given the significant impact this will have on the costs of all mainstream independent schools.

Telling the story

As the Office of the Scottish Charity Regulator (OSCR) has been publishing the financial statements of all charities with income over £25k and all Scottish Charitable Incorporated Organisations for over 18 months now they are seeing a steady increase in the number of views of these accounts on their website

We believe this means there will be an increased focus by charity boards on “telling their story” in Scottish Charity Trustee Reports and this is supported by guidance issued by OSCR in December 2017.

As more charities focus on explaining their objectives and impact and the strength of their governance framework, this can only help to strengthen the public’s belief in the sector, which is vital.

Janet Hamblin is RSM’s head of charities in Scotland.