News

Financial sustainability Leadership and career development Crisis management

Media release: Charity sector innovation boom set to last beyond pandemic

Charities expect to continue their rapid shift towards digital working and collaboration in 2021, building on the innovation they have displayed in response to the Covid-19 crisis even as the pandemic itself begins to retreat.

New research from Pro Bono Economics’ Covid Charity Tracker, produced in partnership with Charity Finance Group and the Chartered Institute of Fundraising, shows widespread innovation and invention through the charity sector as a result of Covid-19. That tide of constructive, creative change is expected to carry through and even build into 2021.

From app-based delivery of food vouchers, to hashtag-based running challenges, the crisis has moved fundraising, service delivery and day-to-day operations online. Three quarters (77%) of charities have made greater use of digital and technology during the pandemic, while two thirds (67%) have innovated to deliver services remotely.

The shift is all the more remarkable given that, in 2019, only 10% of charities reported to the Digital Skills Report that they had been through a digital transformation process that was embedded in all they did.

The Covid crisis may have been a one-off event, but these positive trends appear likely to continue and to accelerate into the year ahead. Today’s new figures show seven in 10 charities want to make more services digital and deliver new services remotely over the next 12 months. Over half (54%) want to increase their use of technology and digital within their back office functions.

Meanwhile, 50% of charities are looking to collaborate more with others in their sector, something 30% were reporting undertaking in August last year. Additionally, 35% wish to enhance their relationships with business. However, corporate giving has not been spared Covid’s impacts. Previous surveys have revealed just under a third (28%) of charities have reported a decline in corporate giving in 2020, despite high-profile partnerships by major brands such as Sainsbury’s donation-matching for FareShare. That suggests that alternative kinds of private-sector support, such as employee volunteering, use of unused equipment or office space, and donated services may all be beneficial approaches to take in the months ahead while cash remains tight for both sectors.

This widespread intention to enhance and improve collaboration is a rare positive indicator of the sector’s long-term prospects. Despite these positive trends, the research provides a clear reminder of the challenges facing the sector. One in four charities (25%) anticipate it taking at least two years for income to return to pre-Covid levels, and 81% expect Covid to negatively affect their ability to deliver their objectives over the six months ahead.

Anya Martin, Senior Research and Policy Analyst at Pro Bono Economics, said: “Voluntary and charitable organisations have a long history of overcoming adversity. 250 years ago, they rose to the world-altering challenge of the Industrial Revolution. Following the last financial crisis, the sector pivoted towards new sources of earned income when other sources of funding fell away. This crisis is no different.

“Much about the months and years ahead are uncertain and the funding gap is a flashing red light on the sector’s dashboard. Yet a determined focus on collaboration and digital innovation means it is possible the charity sector emerges from the pandemic more closely knit and more efficient in the long-term – ultimately able to help more people, more effectively.”

Roberta Fusco, Director of Policy and Communications at Charity Finance Group commented: “Charities and social change organisations of all sizes have shown huge amounts of resilience, adaptability and decisive action through 2020 to ensure that they keep delivering a continued focus on their mission and meeting the rising tide of need from existing and new beneficiaries. The imperative to keep rapidly adapting will continue through 2021 with the impact of rising unemployment and the implications of Brexit. The capacity to remain flexible and adaptable relies on financial sustainability, which is under serious threat for many.

“Charities have stepped up to deliver and adapt at pace and have pulled on all the levers at their disposal, but they still face 2021 with hope - now government needs to do the same in their support of never more needed charities and not give up on the millions of beneficiaries who rely on the public benefit they deliver.”

Daniel Fluskey, Head of Policy and External Affairs at Chartered Institute of Fundraising said: "The story of Covid through 2020 for the charity sector has been one of huge challenge, but also of resilience, flexibility, and innovation. The loss of income told to us by the sector in this research means that we have never before seen such a threat to the delivery of charitable services and public benefit that charities exist for. Where charities have been able to carry out fundraising - either through limited activities in a safe and responsible way, or through new channels and innovative appeals - people have responded generously, but we have not been able to match the normal levels of income our beneficiaries rely on for the services they need.

“As we look ahead to 2021, we will need to learn the lessons of what worked last year and embed some of the flexibility and innovation that we've seen in fundraising activity. But we also have to be realistic that the charity sector will start 2021 smaller than it was in 2020 and that a full 'recovery' is unlikely to be seen this year."

 

Key findings:

 

Table 1. Which, if any, of the below changes do you want to make to your working practices over the next 12 months? (select all that apply)

 

Proportion

Identifying alternate sources of income

81%

Becoming more efficient in how we run our organisations or deliver services

61%

Making more services digital/delivering more services remotely

71%

More internal/back office use of tech/digital

54%

Collecting more data about our services / programmes

37%

Collaborating more with other charities

50%

Collaborating more with businesses

35%

Merging with another charity

4%

None of the above

2%

Notes: 9-15 November (n = 216).

Source: PBE Covid Charity Tracker survey

Table 2. How long do you expect it will take your organisation to return to pre-crisis income levels?

 

November

Don't know

8%

More than 24 months

25%

More than 12 months

69%

More than six months

85%

Notes: 9-15 November (n = 216).

Source: PBE Covid Charity Tracker survey

Table 3. How do you expect Covid-19 to affect your charity’s ability to deliver on its objectives in the next 12 months?

 

Proportion

Large negative

34%

Small negative

47%

No impact

7%

Small positive

7%

Large positive

2%

Don’t know

3%

Notes: 9-15 November (n = 216).

Source: PBE Covid Charity Tracker survey

 

About Pro Bono Economics:

PBE is a research charity that uses economics to support the social sector and to increase wellbeing across the UK. It combines project work for individual not-for-profits and social enterprises with policy research that can drive systemic change.

About Charity Finance Group:

Charity Finance Group (CFG) is the charity that inspires a financially confident, dynamic and trustworthy charity sector. We do this by championing best practice, nurturing leadership and influencing policy makers.

About the Chartered Institute of Fundraising:

The Chartered Institute of Fundraising is the professional membership body for UK fundraising. We support fundraisers through leadership and representation; best practice and compliance; education and networking; and we champion and promote fundraising as a career choice. We have over 6,000 individual members and over 600 organisational members who raise more than £10 billion in income for good causes every year.

For further information, please contact:

PBE Press Office at pressoffice@probonoeconomics.com or 07715 073433. Follow Pro Bono Economics at (@ProBonoEcon) and Matt Whittaker (@MattWhittakerPB) on Twitter.

« Back to all news