LocalGiving’s Local Charity & Community Group Sustainability Report 2016 has revealed that local charities are facing an ever-increasing demand for services coupled with greater difficulty in finding funding.
Key findings from the report include:
Demand for the services of local charities and community groups has continued to grow.
- 73% of respondents reported an increase in demand for their services. Less than 1% reported a decrease.
- 78% of groups predict further increases in demand over the coming year.
- Of those groups predicting an increase in demand just 18% feel that they are sufficiently resourced to meet this demand.
Although most groups are confident about their immediate survival, many fear for their long term prospects.
- 79% of respondents are confident that their organisation can sustain itself over the coming 12 months. However, this drops to just 46% when extended to five years.
- 57% of groups see generating income and achieving financial sustainability as their most pressing issue over the upcoming 12 months.
- 60% of respondents knew of one or more local groups that have been forced to close over the last year – up 7% on 2015 – up 7% on 2015 (53%).
- Encouragingly, 33% of respondents anticipate an increase in their organisation’s annual income in the current financial year, up from 27% in 2015.
- However, two thirds (67%) of groups were still predicting stagnation or a downturn in their financial position in the coming year.
- 76% of groups highlight ‘competition for grants and contracts’ as a financial concern, with 65% citing ‘generating income from individuals’ as a challenge.
Local charities and community groups are adapting to the evolving funding environment but the pace of change is slow.
- Grants were the primary source of income for 50% of groups in the previous financial year – with 51% predicting grants to remain their primary income source in the current financial year.
- 79% of groups have received some funding from the general public in the last 12 months. 65% see difficulty in generating donations from the general public as a current financial concern
- Take up of social investment within the local voluntary sector is slow. Just 15% of respondents have considered social investment as a funding source for their organisation; and more than half of respondents were unsure what social investment is.
In order to ease the strain on the sector, the authors of the report recommend that government, grant makers, voluntary sector organisations and businesses work together to ensure the provision of more accessible unrestricted funding opportunities for local charities.
They also recommend that continued support is given to local charities to build fundraising capacity, thus helping them to diversify their sources of income. Training opportunities must be accessible and ongoing, ideally including face-to-face support. It is also important that organisations are helped to retain staff and volunteers to avoid loss of skills later down the line.
In addition, they recommend that funders take responsibility for reducing inefficiencies in grant application processes in order to save local charities and community groups valuable time which would be better dedicated to service delivery.
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