The last few years have been undeniably challenging for the country and the world, with a pandemic, a major land war in Europe and an economic crisis. For charities, it has also been a time of challenge – but it has also demonstrated the importance of voluntary action.
When the pandemic hit, charities kept delivering services, they provided support to both Afghan and Ukrainian refugees and helped address the fallout of global instability – often having to adapt quickly and innovate to find a new way of doing things.
And alongside this, many were worrying about their own futures – particularly those reliant on event fundraising and trading activity. The cancellation of the London Marathon alone represented an estimated £70 million loss to the sector, whilst the Charity Retail Association estimated that charity shops lost over £285 million in sales over COVID-19.
Arguably the biggest challenge of all has been adapting to soaring inflation, leaving many charities with spiralling costs at a time when they are also helping more people in financial crises. The adaptability and resilience that charities have shown throughout has been nothing short of remarkable.
Indeed, charities have had some help. The generosity of the British public has remained steadfast throughout. However, rather worryingly, the Charities Aid Foundation’s UK Giving Report from this year revealed that a quarter of people had changed their giving activity or were considering doing so in response to the cost-of-living crisis. Even where people have been able to continue to give the same rates, they will have seen the value of that donation significantly eroded by inflation.
Government has also been supportive, providing a £750 million package for the sector in response to the pandemic, while charities benefited from many of the wider measures to support business; particularly the furlough scheme. And it has also responded to the financial challenges facing charities, with the Energy Bill Relief Scheme helping non-domestic energy users, including charities, and a £100 million scheme announced in the 2023 Spring Budget to support organisations facing additional demand because of inflationary pressures.
This level of support is very welcome, but it should make us think about why this sort of support exists. Ultimately, both during the pandemic and over the last year, the Government has been prepared to invest money in charities because it knows it will get a good return. Voluntary organisations are committed to delivering the maximum possible impact even in the most trying of times.
But while people are only too aware of how charities have stepped up in times of crisis, there remains a lack of understanding of the crucial role they play, underpinning social bonds and promoting opportunity.
When we talk to politicians, they may know that a charity is supporting their local community, but they do not always make the link to the way charities support both the local and national economy.
We can quantify some of the direct contributions that charities make to the economy – the former Head of the Levelling Up Taskforce and founder of Pro Bono Economics, Andy Haldane, estimated that the sector’s contribution to social value is as much as £200 billion. Charities are also a significant employer, providing jobs for nearly a million people in the UK.
And when you look beyond those headline numbers, there are many broader ways that the sector plays a crucial role in supporting the economy and driving growth: from making communities better places to live to directly supporting unemployed people into work. Indeed, the Levelling Up White Paper recognised the necessity of social capital alongside more conventional levers for growth, but the Government still has much to do to maximise the potential of the sector in delivering regional economic growth.
The importance of the voluntary sector can perhaps be most clearly recognised in its absence. Research by the Local Trust and Oxford Consultants for Social Inclusion (OCSI) identified that deprived areas that lack places to meet, are missing an active and engaged community and have poor connectivity to the wider community – all services provided by charities – also have higher rates of unemployment, ill health and child poverty than similarly deprived areas.
Charities, of course, are not the only answer. We need businesses to create jobs, innovate and drive investment. But the UK looks like a better investment when we have communities that make the most of our talent and entrepreneurialism, that help people to enter or re-enter the labour market and that make sure all our communities are good places to thrive as a family.
The Government has already shown that it values the work of charities when we are dealing with immediate crises, but a stronger partnership between government and the voluntary sector feels essential to achieving long-term sustainable growth.
Sarah Vibert is the Chief Executive Officer of NCVO.
This article was published in the latest edition of Centre Write. Views expressed in this article are those of the author, and not necessarily those of Bright Blue.
Read more from our August 2023 Centre Write magazine, ‘Back to business?’ here.
