Financial pressure and the current regulatory environment hinder small charities from growing, delegates heard at the Charity Finance Summit 2024 yesterday.
Priya Singh, NCVO chair, said at the closing panel discussion: “I don’t need to tell a room full of financial people in the sector that there’s continual financial strain.
“We are absolutely seeing that there’s financial pressure, the rising cost of living, decreasing income, and while charities have adapted really impressively, the rising cost of living and all of those things have really made so many reach breaking points.
“Charities are being asked to do more with less in terms of resources.
“The regulatory environment that creates the same level of regulation and details of regulation across a broad spectrum doesn’t allow for smaller organisations to thrive.
“And it also doesn’t allow for boards and trustees and leaders in charities to share the risk that comes from collaborative working and investment in the future.”
‘Concerning trends’
Shazia Arshad, head of communications and creative at Islamic Relief, said that one of the “concerning trends” that the charity is seeing is that small charities are not meeting their rates and rents.
“We had the impact of Covid-19 and the subsequent impact of the cost-of-living crisis,” Arshad said.
“We‘ve seen that very much through the lens of our domestic programmes and the partners that we work with.
“Without the infrastructure and the very basic needs of charities being met, and particularly those smaller charities that run very essential services in local communities, we’re very likely to see a lot of these small groups not being able to survive the tough times.”
Expectations of the new government
Kunle Olulode, director at Voice4Change, said he would like the new government to focus on investment and its “creative” use of dormant assets in the charity sector, which he said was not used “creatively” in the past.
“That would impact hundreds of community organisations up and down the country, including some projects that I’m involved in,” Olulode said at the summit.
Meanwhile, Arshad said the new government should also focus on grant applications.
Arshad said: “One of the things that we notice is that small charities don’t even necessarily have the capacity to get in those applications or fill them to the extent that they need to.
“And having to write a grant application is an exhaustive process.”
She said the new government has an opportunity to ensure that fund managers give small charities the chance to access that money in a longer and sustainable way.
Singh from NCVO said charities are forced into a “single” type of funding model.
“Funding models that create the one-year going concern tick box are insufficient to drive the societal change that we are primarily fantastic at creating and supporting because the sector understands its communities, understands its people in much more granular detail than possibly any other part of the services,” she said.
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