The economic instability of recent years has been felt by both businesses and individuals, and the charities sector faces as significant a level of exposure as any other. Non-profit organisations have overheads to meet, just like anyone else, while the belt-tightening that most of us have been forced to undertake means that many individuals and households have less disposable income to devote to altruistic causes.
Here, we examine some of the trends we have observed in 2018 to date, and take a look at what is likely to happen in the sector over the coming months.
The General Data Protection Regulation was one of the biggest news stories from the first half of 2018 and came into force on 25 May. Charities have been hit particularly hard, as many are heavily reliant on the personal data they hold for supporters, staff, volunteers and those who use their services.
There are no “special rules” for charities, and in the past, the ICO has been quick to hand out fines, including an £18,000 fine to the International Fund for Animal Welfare, a £16,000 fine to Cancer Research UK, a £12,000 fine to the Royal British Legion and numerous others. These fines were under the old Data Protection Act rules, and under GDPR, the penalties could be significantly higher.
Brett Terry, director of people at the NSPCC, thinks that being ethical is one of the biggest challenges facing the sector. ‘A charity’s accountability to its patrons and beneficiaries is rightly being challenged more frequently and scrutinised more closely than ever. Being under the media microscope means that charities need to get better at communicating their expenditure, strategies, impact and ethics to grow public understanding and instil confidence, showing that they are using funds in the best way to support the people on whose behalf they operate.’ He goes on to say, ‘Relevance, transparency, impact and accountability are vital in helping charities to run effectively. The sector needs, now more than ever, to continue to come together to tackle the common misunderstandings about the way charities work and better develop strategies to build public confidence.’
Reaching out to the new generation
Generation Z is slowly but surely becoming the number one target demographic across every sector, charities included. This is a generation that has grown up with social media and smartphone apps, so engaging via these platforms and adopting digital fundraising methods is essential rather than optional.
However, there is more to this than simply setting up a Facebook page. Many charities are reliant on staff and volunteers at the other end of the age spectrum. Truly engaging means adopting more cross-generational strategies and exploring the influencer marketing phenomenon.
Social care compliance
In late 2017, two high-profile tribunals prompted the government to clarify the rules on sleep-in carers, confirming that they are entitled to minimum-wage hourly payment for every hour they are on-shift. This has led to a raft of carers seeking back-pay, some of which goes back several years.
There is a real risk of some charities facing insolvency in the light of these liabilities. The Social Care Compliance Scheme (SCCS) is an initiative launched by HMRC to support any such organisations in their efforts to identify and settle all outstanding amounts by March of next year.
Charities still playing a vital role
These are all challenges that the charities sector is having to face head-on. However, it is worth noting that despite the difficulties that 2018 has presented so far, charities continue to play a pivotal role in the economy, providing around 750,000 jobs and funding 40 percent of all medical research.
Despite the economic constraints, it is also worth keeping in mind that 44 million people in the UK, or two thirds of the population, regularly donate to charity. It’s a statistic to be justifiably proud of. Keep an eye on our blog pages for more news on the charity sector over the coming months.