Conclusion
Objectives and Findings
Local charities and community groups are an essential part of community life. Their services are invaluable and often irreplaceable.
However, prior to this report, little research has specifically looked at the UK’s “local” voluntary sector.
Our aim was to gain a snapshot of this sector in 2015. We believe that the findings of this report serve to not only improve our understanding of the core characteristics of local charities and community groups, but also to stimulate a national debate about how best to achieve a sustainable, flourishing sector.
- The impact of the financial crisis is evident throughout the local voluntary sector. Many groups have genuine fears over their mid to long-term survival.
- The issue of service capacity is a ticking time bomb. Demand for the services of local groups has grown significantly, stretching resources to their capacity.
- Many charities cite the impact of austerity on their beneficiaries, coupled with the shrinking state sector, for this rapid escalation in demand.
- Despite regular talk of the need to diversify funding, there is a continued over-reliance on grants. In addition, many groups see contracts as overly restrictive, often impinging on their autonomy.
- A reactive culture has emerged within the sector, where groups are forced to prioritise day-to-day demands and are unable to address long-term issues, such as building reserves and increasing skills. This is of huge concern for the sustainability of the sector as a whole.
- There is a shortage of core skills. Many organisations do not have adequate resources to provide training to their staff or volunteers. Furthermore, there is a shortage of reliable, available, appropriately-skilled volunteers in the sector. This is of particular concern given that many charities are highly or solely reliant on volunteers for running core activities.
- There are evident regional differences affecting voluntary sector organisations located across the country. We believe these often reflect wider economic and social issues.
- Collaborative working with businesses, local statutory services or other voluntary sector organisations is now standard practice.
- Although the local voluntary sector covers a diverse range of causes, there are important shared characteristics. Local groups see their key strengths as being their ability to develop strong, trusting relationships with service users and their knowledge of local needs.
- Our survey data indicates that the majority of local charities and community groups are small, with a high percentage focusing on health and well-being or disability issues.
Recommendations
It is difficult to make any clear forecasts about the sector given the economic and political volatility of recent times. The UK’s economy is in recovery and our hope is that this upturn will filter through to the local charity sector - through individual donations and fundraisers, as well as increased private and public investment. However, at present there is little evidence of such a trend emerging spontaneously. Looking at both our own findings and the wider research cited throughout this report and beyond, Localgiving believes that there are a number of key actions that can and should be taken to improve the current situation and safeguard the sector.
The following recommendations are intended to: a) help alleviate financial challenges in the short-term and b) contribute to a more sustainable, financially-robust local voluntary sector that is better able to cope with wider economic and political changes.
There is an urgent need to diversify income streams. Many local charities and community groups remain heavily reliant on grants, leaving the sector vulnerable to economic or political fluctuations.
Local voluntary groups must look to diversify their income through exploring new financial models and emerging funding channels such as corporate partnerships, public donations, individual fundraisers or earned income. However, there are well-documented obstacles preventing many groups from benefiting from alternative income generating activities. The development of specialised skills (legal, finance, fundraising etc), practices and contacts takes considerable time and resources. Any serious commitment to supporting the local voluntary sector to transition towards more sustainable financial models will require a significant injection of resources.
It is vital that long-term, accessible training programmes are developed to support time-poor volunteers to cultivate practical skills and experience at their own pace.
An increase in unrestricted funding is essential to improve the sustainability and autonomy of the local voluntary sector. In recent years there has been a shift towards ring-fenced, conditional funding. These sources restrict recipient spending to specific areas of work (usually standalone projects) at the expense of spending on operation costs (running costs, insurance, reserves, salaries etc), or capacity building. Individual donors, too, have increasingly begun to earmark donations - many associating this with increased accountability. Whilst the ability to measure impact is of great importance, the unfortunate result has been a local voluntary sector with less autonomy, flexibility and financial security.
A significant attitudinal shift is required to address this. The local voluntary sector and its advocates should become more vocal about the need for unrestricted funding and unapologetic about spending on core costs. This message should be supported by partners in the government and corporate sector and, importantly, also in the media where unrestricted funding has often received negative attention.
Developing strong inter- and intra- sector partnerships can lead to a far more efficient and effective use of skills, resources and knowledge.
Our findings revealed that growing numbers of groups now work collaboratively with businesses, local statutory services or other voluntary sector organisations. This can have huge benefits, from resource pooling to skill swapping. However, these relationships should be chosen carefully and structured appropriately - ensuring that partner organisations are culturally compatible (ableto co-operate) and, importantly, that smallerorganisations or junior partners always able to maintain their autonomy.
More should be done to raise awareness of the local voluntary sector and its work in order to encourage a greater level of public, corporate and central government support.Local groups currently feel under-appreciated by the UK general public and central government. In addition, many are unable to connect with fundraisers, volunteers and individual donors at a comparable level to larger national and international charities. We therefore recommend central government works to increase engagement with local groups by establishing a working group dedicated to the local voluntary sector. In addition, we recommend backing for schemes that encourage public donations to localngroups. We call upon the media and corporate sector to help promote such initiatives.
Skilled volunteers with specialist knowledge must be attracted into the sector.
In addition to a drive to raise general awareness, serious consideration and resources need to be put into encouraging specialists in areas such as marketing, fundraising, finance, corporate engagement to volunteer for local charities. Trainingfor those already engaged in the sector is undoubtedly useful, but cannot provide the experience or specialist knowledge brought in by skilled practitioners. As a start, we welcome the government’s pledge to introduce paid volunteering leave for employees in large organisations.
There is a clear need for a more equitable distribution of funding opportunities across the countries and regions to ensure the sector can flourish across all areas of the UK. It is essential that we find new ways to stimulate funding for voluntary sector organisations in under-resourced areas. As well as looking at mechanisms for centrally distributing resources to regions according to need, it is vital that ways are found to generate money from within regions themselves. A particular focus should be put on engaging philanthropists, businesses and the wider local community in the discussion and increasing their knowledge of the work of voluntary sector organisations within their local area.
Building digital skills capacity within the sector holds the opportunity for increased efficiency, income generation, communication and collaboration.
Small, local charities have access to numerous affordable tools online - ranging from design to mass communications; project management to fundraising. However, to maximise this opportunity, it is important that we, as a sector, identify the best channels for disseminating knowledge. Training programs to up-skill local charities must be comprehensive, long-term, adequately resourced and cater to specific sector needs.
Looking to the future
The Local Charities and Community Groups Sustainability Report is our first study of this scale and ambition. Moreover, it is the first significant report of its kind exploring the local charity sector in the UK in recent times. Its findings will inform Localgiving’s activities, allowing us to better support, train and advocate for local groups. In addition, we hope that it will contribute to the national debate on the wider voluntary sector.
This report has provided us with valuable baseline data, giving us the opportunity to track emerging trends through future studies. Our hope is that its findings will act as a catalyst for action, prompting key stakeholders from across all sectors of society to engage with the issues and work together to find innovative solutions. Through the implementation of progressive, long-term support initiatives, we believe it is possible to create a brighter, more sustainable future for local charities and the communities of people they serve throughout the UK.