Charity Horizons: Detailed findings from our survey
The ICAS Charities Committee has published the detailed findings from its Charity Horizons survey.
Back in July, the ICAS Charities Committee published the initial findings from its Charity Horizons survey. Today the Committee is publishing the detailed findings to the survey questions. Christine Scott and Colin McCrann take stock of the results.
The aim of the survey was to find out how charities are adapting to today's more challenging financial environment and to examine how this has impacted on relationships between charities and their funders.
Our initial analysis of the survey responses produced some unexpected findings in addition to confirming that financial concerns are very much to the fore.
Due to the number of responses received and the amount of information provided, the Charities Committee decided to publish more in depth results. This more comprehensive look at the views of ICAS members involved in the charity sector are in line with our initial findings and conclusions.
Charity Horizons survey results
The Charities Committee received 260 responses from ICAS members across the UK: 196 responses were completed from the perspective of a charity employee or volunteer; and 64 were completed from a charity advisor perspective.
The survey responses reflect the views of a wide range of charities, from small charities purely run by volunteers to very large charities with more than one hundred staff. Different charitable objectives and different legal forms are reflected as are public service providers and grant-makers.
The main challenges faced by charities in the short-term (‘one year’) and the medium-term ('one to five years') are financial in nature: this is the view of both charity sector and advisor respondents to the survey.
The table below illustrates the significance of financial challenges faced by the sector in the next one to five years, represented as a percentage of respondents.
Charity sector: financial challenges
Advisors: financial challenges
The percentages do not add up to 100, for example, as respondents can identify a challenge that is financial in nature in each of the three challenge categories.
Charity sector respondents’ concerns about charity finances remain at a similar level across the short and medium-terms with perhaps a slight improvement in the level of concern in the medium-term. Advisor concerns over charity finances are slightly more marked in the short-term than in the medium-term, with the level of concern in the short-term being significantly higher than the level of concern expressed by the sector itself.
Some of the responses given were fairly generic; for example, there were many references to finance, funding, and fundraising so it was not possible to undertake much more detailed analysis. Concerns about public sector funding and declining membership are two aspects of the financial challenges faced by charities which could be drawn out but the number of respondents referring to these more specific challenges is fairly limited.
By asking respondents to provide information on the top three challenges, rather than the top challenge only, it is possible to highlight additional concerns. The table below identifies the top three themes identified by charities and their advisors as challenges.
Charity sector: themes
Strategic and operational
Strategic and operational
There is a degree of consistency between the charity and advisor perspective with both groups scoring financial and skills challenges as being significant. By contrast the sector itself places greater emphasis on strategic and operational issues than advisors, while advisors are more concerned about red tape relative to the sector.
We also asked respondents whether charities are identifying measures to address their top three challenges: the responses expressed below are in percentages.
Charity sector: identifying measures
Advisors: identifying measures
The results for the charity sector are positive in that most charities are identifying measures to address their main challenges and, where they are not; there is awareness among charity staff and trustees that there is a need to do so. The responses from the advisor perspective are more difficult to interpret due to the high percentage of ‘don’t knows’ but, to an extent, are consistent with the charity perspective as more charities are viewed as identifying measures than are not.
Measures to deal with financial challenges are to the fore: what is most striking about the answers received is the emphasis on diversifying income as a means of addressing financial challenges with references to making cuts and efficiencies mentioned to a lesser extent.
Taken as a whole, the measures charities are taking to address the challenges they face give an insight into how charities think about the future. When it comes to financial challenges there is a clear emphasis on income generation rather than on retrenchment. Charities are also planning for the medium-term, and in some cases the longer-term, and they are investing in IT and in skills. These measures give a real sense that charities believe their services will continue to be required and that they will be here to deliver them.
Relationships between charities and their funders
We asked a number of questions about the relationships between charities and their funders covering the charity perspective and the advisor perspective. The specific relationships covered are:
- Charities and public service organisations purchasing services from them
- Charities and their public service grant-funders
- Charities and their non-public service grant-funders
- Grant-making bodies and their grant recipients
Key highlights from this group of questions are presented below.
There has been much discussion about the relationship between charities and their funders particularly public services funders. Anecdotally, the impression is that tighter public finances have led to the deterioration of relationships with public service funders. However, the results of this survey do not bear that out.
Charities perceptions of their relationships with the public service organisations are very positive. This is the case even though contract and grant-funding negotiations are perceived to have become more difficult in recent years:
- 82% of charity sector respondents agree or strongly agree that their charity has a constructive relationship with public service organisations which purchase services from them, even though 67% agree or strongly agree that contract negotiations are more difficult than in the past.
- 80% of charity sector respondents agree or strongly agree that their charity has a constructive relationship with their public service grant-funders, even though 68% agree or strongly agree that funding negotiations are more difficult than in the past.
Relationships between non-public service grant-giving bodies and charities receiving grants from them are also largely positive but less so than relationships between public service funders and charities.
Non-public service grant-giving bodies’ perceptions of funder/ recipient relationships are consistent with the perceptions of charities, with 65% of such grant-giving bodies and 69% of charities agreeing or strongly agreeing that relationships are constructive. Interestingly, only 24% of grant-giving bodies believe negotiations about funding are tougher than in previous years compared to 48% of charity recipients.
Advisor perceptions are a bit less positive about the relationships between charities and their funders, for example, only 57% of advisors agree or strongly agree that relationships with public service purchasers are constructive, compared to 82% of sector respondents. 93% of advisors believe that contract negotiations are tougher compared to 67% of charities.
Most charities (66%) indicated that they would welcome the development of funding models where the risks can be shared between the charity sector, public service purchasers and private funders. There are various barriers to innovation in this area and there a lessons here for government who should be cognisant of sector views and should be assisting the sector in breaking down these barriers.
Undoubtedly charities across the UK will continue to face significant challenges in terms of their finances and in ensuring that they have both the necessary infrastructure and skills to deliver their charitable purposes. However, the results of the Charity Horizons survey show that there are many reasons to be positive about the future role of the sector in providing support to local communities and individuals and in delivering public services.
Once again, the ICAS Charities Committee would like to thank the many ICAS members across the UK who responded to the Charity Horizons survey which we conducted in April this year.