Two years since the run on the high street bank Northern Rock plunged the UK economy into crisis, there are signs that things are beginning to pick up. Enormous queues seemed to have returned to the south London branch of IKEA and I’ve started to enjoy reading the papers again.
As the number of jobless continue to rise, we’ve heard a lot about how employment is a lagging indicator. Similarly, I think recession in the charitable sector will lag behind other parts of the economy.
Recent research suggests that giving in the UK has dropped by 11% over the past year. But more trauma – in the form of massive cuts in public expenditure combined with a fall in grant-making – is still to come.
So who will be the losers as the squeeze continues? When we look back in a few years time, I think that the biggest casualties will be medium-sized charities.
Small organisations – those with an income of less than £10,000 and that make up around 90% of the sector – are used to living on the edge. For many of them, a fall of income might mean going back to the kitchen table but it will not be fatal. And the largest charities – with their diverse income streams and hefty reserves – are in a position to ride out the recession, even if it does mean making cuts.
Medium-sized charities are stuck in between – in what I recently heard described as the ‘killing fields’. They are too big to get by with odd grant, but are also not large enough to manage significant public sector contracts or attract substantial public support. They will have to work hardest to survive and seem more likely to cut staff, merge with another organisation, or shut down.
The legacy of this recession will play a major part in shaping the charitable sector for years to come. Medium-sized charities look set to be hit hardest. Among them, those that flourish will be those that can best demonstrate the value of their work and are nimble enough to respond to the changes that they will inevitably have to make.
Friday, 2 October 2009
Subscribe to:
Post Comments (Atom)
Posts
2 comments:
John you are probably right that the legacy of this recession will play a major part in shaping the charitable sector, perhaps decades. How worrying is that?
Recession watch panels, ACEVO, NCVO, the sector press, commentators and pundits have been predicting your medium sized "killing fields" for months. The theory is, medium sized charities, like Beatbullying could easily be the casualties of the downturn: Not big enough to hold large / scandalous reserves, nor small and nimble enough to make the quick decisions to fend off the recession. At least we are getting talked at, (not by you of course, you are lovely), which is something I suppose. The thousands of small charities and membership organisations going to the wall, don't even get a mention, and most of them don't retreat to the kitchen table, they fold and the amazing, life changing work they do with hundreds of thousands of people folds with them.
Where are the summits convened for small and medium sized charities, or the glossy magazine pull outs, or the medium sized charities top ten tips for surviving the recession? Will the small & medium sized ever get a recession watch panel, or a constructive, intelligent information campaign that reaches out across the sector? I fear not.
Where is the voice and support for the 3 staff working out of an office in Reading, providing emergency support to drug addicts, 1 of whom will have to be made redundant because they have to pay the gas bill. Or the small charity turning over £150,000, working with the families of prison lifers that have to decide between salaries or paying the Inland Revenue? Or the young but amazingly innovative charity stopping kids joining gangs in Doncaster, who are literally saving lives, but whose local funders payment is 3 months late? I can't hear nor see them. Because, I would argue, the very same pundits and umbrella organisations are so busy worrying, writing and positioning about the legacy income of the top 50, the machinations of mergers, Commissioning and the who's who & politics of the super charities / monopolies they forget where the bloody coal face is and that they are meant to be the voice of the many and not the few. Where exactly is our leadership?
With that I am off to try and be "nimble" as that seems to be the route to medium sized survival.
Emma,
I think we are taking about the same group that is most vulnerable. Your additional point - that many organisations are being ignored, I agree with.
A familiar story: the debate seems to be dominated by the same medium/large London-based charities. But that doesn't invalidate much of what is being done around responses to be recession. If the money simply isn't around, then organisations need to know about strategies, such as collaborations, that they might use for their services to survive.
Part of the problem is that everyone - except perhaps the super-charities - is feeling the pain. NPC is busy making itself nimble too.
John
Post a Comment