Funding fears grip charities in 2018

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Losing funding is the biggest risk facing UK charities in 2018 

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12th December 2017 by Susan Smith 1 Comment

Funding concerns are the biggest risk facing charities in 2018 at a time when public giving is predicted to go down.

Research from charity insurer Ecclesiastical has uncovered what charities believe are their biggest risk.

Charities believe government changes are the second biggest risk facing the sector but the impact of Brexit is way down on their risk register beneath reputational risks, the impact of new data protection rules and cyber crime.

Top 10 risks identified by charities

1.    Funding (identified by 84% of charities)

2.    Impact of Government changes (72%)

3.    Reputational risk (66%)

4.    GDPR/data protection (65%)

5.    Cyber/internet crime (63%)

6.    Grant providers (62%)

7.    Employer liability (53%)

8.    Exposure to social media (51%)

9.    Increased focus on governance (45%)

10.  Impact of Brexit (44%)

It comes at the same time as research from Cambridge and Counties Bank suggest a quarter of people are donating less to charity this year than last year.

A drop in disposable income and the rising cost of living are being given as reasons for giving less or not increasing donations to charity. According to the research nearly half of people (46%) says they will have donated the same to charity in 2017 to 2016.

Rachel Curtis-Bowen, chief customer officer at Cambridge & Counties Bank said: "The cost of living for many people is rising and our research shows that for many this means they will be donating less to charities this year.

“Charities rely heavily on donations and if they see a drop here it could adversely affect the services and help they provide to millions of people.”

David Britton, charity director at Ecclesiastical, said the challenging environment meant that charities were having to take more risks.

“This is a time of transformation with charities becoming ever more innovative in their fundraising and exploring new models and ways to engage. This, coupled with new regulation and increasing threats such as cyber-crime, means that charities are facing and taking more risks than ever before.

“The important thing to remember is that good risk management and governance coupled with the right level of professional expertise can help charities to embrace new opportunities and mitigate the financial risks they are dealing with in a difficult and ever-changing economic climate.”

Cambridge and Counties Bank research also reveals that charities are suffering from very poor returns on charity deposit accounts.

However, the Charities Aid Foundation said its research conflicted with Cambridge and Counties Bank and suggests people continued to give fairly consistently in 2017.

Susan Pinkney, head of research at CAF said, commenting on results: "Through our CAF UK Giving Survey we run a monthly tracking study of 1,000 people across the UK.  From this we can see that giving has remained pretty consistent across 2017.  Around 60% have donated in the last year, with average donations at £20. 

“In fact, this year we looked back at the last 10 years of giving, which covered a number of financial and other key events, and giving remained remarkably consistent at c. £10 billion per annum. This is despite the economic backdrop and demonstrates the incredible generosity of the British population."

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18th December 2017 by Rose Burn

As the Scottish income tax increases on the middle income and higher paid come into effect from next spring so no surprise if funding is the main concern for Scottish charities next year.