2016 has been a tumultuous and at times extremely painful year. What have I learned from the last 12 months? Expect the unexpected (to the extent where I am surprised Austria did not vote for a gun-carrying far-right President on Sunday). Uncertainty rules the day. What will our new relationship with Europe look like? How dangerous will a Trump presidency be, and what on earth will his small hands tweet next?
Amidst all of the uncertainty we still need to get on with the day job. I wanted to reflect back on some of the wider implications of 2016 and what they mean for next year:
1. Brexit and Trump have dominated 2016, and 2017 will be no different
Brexit and Trump have dominated 2016. The public have been bombarded with stories about both over a prolonged period of time, but debate is still being held at a very macro level - trade deals, access to the free market and immigration. There is very little space to get your voice heard. In this context all brands, not just charities, are struggling to get their messages across.
This lack of detail on exit negotiations also means there are very few hooks for charities to launch a campaign to reflect or grow the public’s attitudes. When the Government does reveal its negotiating hand, organisations from all sectors will inevitably seek to maintain or improve their interests in the negotiations, but until then, they can only be reactive.
2. Rising oil prices and a weaker pound mean inflation will increase
At the time of writing the pound in my pocket will get me 1.19 euros. On 22nd June I could get 1.30 euros. This means that if a family took £1,000 spending money on a European holiday in 2017, they would have over 100 fewer euros than in 2016, not to mention more expensive flights and accommodation. In addition, most companies that import goods and services from outside the UK are likely to increase prices.
If the pound remains weak in 2017, the public will have significantly less disposable income, which will inevitably mean cutting back in some areas, such as charitable spending. Along with rising oil prices this means inflation will increase. Your fundraising team will have to work very hard to maintain the same levels on income with your donors. A weaker pound also means international projects are more expensive, as demonstrated by World Child Cancer’s cut to their projects by 9%-13%.
3. Domestic issues and Brexit are the government priority
Working out how to Brexit is dominating the Government’s time. Hundreds of civil servants have been redeployed to focus on disentangling EU legislation. For international charities, 2017 looks set to be a tough year. The referendum this year was fought around domestic issues – parliamentary control of all legislation, immigration and more money for the NHS. Overseas Aid and Development is one the areas where we saw one of the biggest divides in our post-referendum research – 13% of Remain voters say it is their favourite cause, in comparison to only 6% or Leave voters. In addition to the focus being on more domestic issues, there has also been criticism of the governments’ ring-fencing of the 0.7% aid budget at a time of austerity, a policy UKIP and some Conservatives have heavily criticised.
International charities will have a triple whammy of tighter budgets due to exchange rates, harder fundraising and working on causes that aren’t so popular.
4. 2017 will be tougher for charities - not easier
Trump will not be inaugurated until 20th January and he has pledged to do an awful amount of awful things in his first 100 days. The UK Government is not going to trigger Article 50 until the end of March, with its negotiating position unlikely to be made public before then. The economic situation is likely to get worse - not better. The news is likely to be dominated by outrageous Trump remarks and cabinet division on Brexit, meaning less space for charity messages.
But come spring 2017, charities will need to be ready to meet these challenges head on. Be they defending legislation threatened by Brexit or being upfront with existing donors about their financial situation, the uncertain world will need charities to represent and fight for their causes.