The lifelong activist running a community garden helping isolated neighbours forge connections. The chief executive running an international charity employing hundreds of people, helping tens of thousands, and managing a budget in the millions. Coronavirus has come for them both, but in different ways.
Fun runs cancelled. Charity shops shut for 30% of the year. Opportunities to meet new donors vanished. The story of how the pandemic has starved many charities of funds has been repeated time and time again. But it’s also where the difference between how the crisis has affected large and small charities begins.
PBE’s latest research, conducted in partnership with the Institute of Fundraising and Charity Finance Group, shows 45% of charities with an income over £10m saying the biggest challenge coronavirus has presented them with is its impact on fundraising, compared to 31% of charities with income of less than £500,000. These smaller charities have found themselves much more stymied by social distancing, with 45% saying that is the single biggest negative impact of Covid compared to just 17% of large charities.
Funding plays a big part in organisations’ ability to adapt
It’s not hard to see how social distancing and its associated restrictions have made the job charities does more difficult. Volunteers charities rely upon are often older: people aged 65-75 are more likely to volunteer than any other age group.
The charity sector disproportionately serves the vulnerable and respite care, therapy and much of the socialisation and support offered to tackle loneliness have all been off the table for the two million individuals who have shielded.
UK charities’ international aid efforts have been hit by travel bans preventing project teams crossing borders and by public health programmes being put on pause as governments focus limited organisational resource on this newest threat; the WHO estimates up to 80 million infants may have missed routine vaccinations.
But why then are smaller charities more vulnerable to this than big ones? In the private sector, SMEs boast of their agility and their ability to adapt. To some degree, the data bears this out. During the last financial crisis, while bigname brands like Woolworths toppled, some research suggests SMEs were better able to cope.
The same does not appear to be true in the social sector. While a huge number of small charities have been able to ride the wave of innovation coronavirus has created, they’re still 16 points less likely than large charities to have been able to pivot to digital delivery.
Flexibility is about more than money
Of course, funding plays a big part in organisations’ ability to adapt. 39% of small charities now have fewer than three months reserves left. And a quarter of large charities surveyed have received government funding, while only 17% of small charities have.
But flexibility is about more than just the money you have to play with. It’s about how diversified you are and how many levers you can pull.
The chief executive of our large charity, seeing her shops ordered to close in March, had choices available to her. She could opt to furlough charity shop staff or she could put them to work on alternative projects – bolstering helpline teams, taking on development work or tackling organisational projects.
Our community garden team is likely to have had just the one project, and a limited number of staff with wide portfolios. Removing just one individual when that single person may be responsible for fundraising, finance, maintenance and core operations is far more difficult than chipping away staff whose to do lists can be picked up by their managers or by others who also full that function.
Difficult choices
Inevitably, some charity bosses are pulling the levers labelled “cuts” and “redundancies”. Cancer charity Bloodwise, for example, is reducing its headcount by 25% as “it's what we have to do to be strong for the long haul”.
It’s not an easy choice to make. The Rainbow Trust’s CEO described it as “the worst decision I’ve ever had to make”.
All in all, PBE expects coronavirus to cost the sector 60,000 jobs. It is large charities that are most likely to shed jobs and services because – again – they have the flexibility to do so. They will be much reduced for a time and then claw their way back up, though 40% of large charities expect it will take them more than two years to scale that summit.
Small charities, on the other hand, are three times as likely to believe they’ll fold.
Without flexibility, small charities are left rigid and can only stand or fall. Their whole deck of cards can come crumbling down if too much is knocked from under them.
It’s already clear the social sector will have shrunk as a result of coronavirus. Facing this litany of disparities in the ways different parts of the sector can deal with the crisis, it’s important to ask how different it will look too.
Nicole Sykes is director of external affairs at Pro Bono Economics
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