Reasons to be gloomy about the coming decade for charities

Joe Saxton looks at what the coming decade looks like for charities

Part 1

 

Fundraising income is going to go down

Whatever way I look at it raising money is going to get harder and harder over the next decade. There will be a short term hit from a tighter Code of Fundraising Practice which is inevitable once it is taken out of the hands of the Institute of Fundraising. The Fundraising Preference Service may stop vast swathes of the giving public from hearing from charities at all. Let’s not forget that millions of households are signed up to the telephone preference service and mail preference service respectively.

And if this regulatory hit is compounded by a hardening of attitude that a summer of scrutiny by politicians and the media has stirred up, the public may well expect more (transparency, proof of impact, etc.) and give less (time and money)

 

We are now fair game for the media

Charities used to be a bit like the Catholic Church – beyond reproach.  Well not any more. The media has discovered a number of things recently: first, that beneath our worthy but dull exterior is some pretty bad practice; second, that charity ‘exposés’ chime with many of their readers/viewers; and third, that the sector is about as good at defending itself as a new born baby. So expect the media scrutiny to go on indefinitely. The mirror has very definitely cracked.

 

Politicians don’t know what to do with charities

Up until recently, politicians’ favourite response, particularly ministers, was to tell charities how fab they were and what a great job they did. Now they tend to say how shocked they are about the outrageous behaviour of a few charities. Love us or hate us politicians don’t seem to have any clear idea about the role of charities in the 21st Century. The Tories had a one-month wonder of the Big Society followed by the Lobbying Act. Labour had the risible Compact and hoped that large amounts of funding would suffice for a clear plan.

 

But then neither does the sector

We shouldn’t be too surprised that politicians can’t answer the question ‘What are charities for?’ because charities can’t answer that same question about themselves. Charities have changed hugely over the last twenty years, but you’d struggle to know it from the leadership and direction from the sector’s great and good. There is a kind of intellectual torpor in the sector about what all this change means for charities and how we should respond.

 

UK charity policy is going to become fragmented

Another way in which life is going to become tougher for charities is that the policy that applies to us is going to become more fragmented. Devolution means that we can expect different regulatory regimes covering any charities who work across the national borders of the UK. We already see it with charity lotteries and charity registration, but expect it to happen with gift aid, fundraising regulations, data protection, and SORP, to name but a few areas over the next 20 years.

 

The generation after baby boomers is not going to have the same wealth

Baby-boomers (those born between 1948 and 1960ish) are very lucky. They have good pensions, wealth through property and can retire usually in good health. They are a hugely valuable generation to charities with the best of their contribution yet to come (though some may have been irredeemably pissed off by the behaviour of charities). All of you out there should love them to bits while you still can. The generation after them (those now closer to 40 than 50) is going to have much less to give: their pensions will be much worse, their property wealth suppressed by high mortgages and the debts of a university education.  It’s harder to see how charities can do as well in the 2020s as we do now.

 

The digital revolution seems to have passed charities by

People hate me for saying this but the digital revolution has, so far, passed charities by. Online or digital giving remains a tiny portion of individual giving for most charities. On any hallmark of the digital revolution that has overtaken the corporate world, or us as consumers, charities are left on the start line. So are there big new ‘digital’ charities? No. Have old established charities disappeared because of digital technology? No. Has the sector created new ways of doing things that change charities for ever? Maybe a bit. Are there great new charity services that only new technology can make possible? Barely a handful. We use some of the existing technology tolerably well, but a revolution it is not.

What I don’t know is whether something about the charity sector that makes it inherently less able to benefits from digital technology.  Or is it just a failure of leadership and management and investment. It may be that as baby boomers are replaced (both as trustees, CEOs and donors) by a more digital literate generation we will see a change in the importance of digital for charities.

 

The public don’t really understand how charities work any more

Charities and the public are like so many married couples. We started with the flush of excited romance. We couldn’t keep our hands off each other. But as things settled down we began to go our separate ways.  Little by little we felt we didn’t need to tell them about the cost of fundraising, the salaries of CEOs and senior staff, and the whole edifice of management that a 21st Century requires. How charities do their stuff, and how donors think and want us to do our stuff are a long way apart. And the path of least resistance for charities has always been not to say more than we need to. When the public discovers what we are doing with their donations they tend not to like it, and to date our strategy appears to be to mumble a few excuses and say ‘We never lied’. Perhaps not. But we have rarely told the whole truth either.

 

Look out for our two new reports later this year and early next: ‘Past imperfect’ looking at whether charities have done a good job over the last few decades, and ‘Future perfect’ about what lies in store for charities and what we can do about it over the new few decades.

Joe Saxton
 

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