UK CHARITY SECTOR STRATEGIC OUTLOOK - COST OF LIVING CRISIS SWOT & PESTLE ANALYSIS

A UK charity sector strategic outlook to use for your cost of living crisis SWOT and PESTLE analysis and your strategic planning and fundraising strategy. It offers 2 scenarios for what the charity sector future might look like in 2023. It also identifies the key issues for charities and the steps you should consider for your own charity in responding to the cost of living crisis.   

It also explains the Charity Excellence #SurviveAndThrive programme to support charities through the crisis - our most ambitious step change ever in the free services we provide for charities.  It is toolkit 1 of 11 in the Crisis Toolbox.  This resource was last update 30 Sep 22. 

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THE COST OF LIVING CRISIS - ECONOMIC OUTLOOK

The budget committed circa £150 billion but is aimed at driving growth by tax cutting.  The energy cap will be a relief to charities through to Mar 23 and, if business is boosted, may help grow grant makers investments that provide income, albeit only in the longer term.  However, whilst inflation has fallen, it is still predicted to peak at 10%.  That will drive charity costs and also reduce the real spending value of donations.  Some argue that the budget may well drive inflation.  The lack of any material support for those in poverty is likely to drive a potentially far larger increase in demand for our services, pushing costs up further for those able to respond.

Looking forward, the spending doesn't appear to be funded.  If the growth aimed for doesn't materialise, it will have to be paid for by even more borrowing.  The Government sacked one of the most respected civil servants in the Treasury, has torn up the previous Chancellor’s fiscal rules and did not allow the Office of Budget Responsibility (OBR) to report on its budget - because it wasn't a budget (apparently).  The Government’s fiscal policy also appears to be at odds with the Bank of England’s, which wouldn’t be exactly helpful.  The markets have lost confidence and the pound has crashed.  It could get a lot worse.     

If the gamble on economic growth pays off, which seems very unlikely, it will ultimately benefit everyone, but not in the near term.  If it doesn’t, they may have thrown £150 billion we don’t have down a black hole.  The Government will publish its plan in November and all indications are that it will be a 'bonfire of red tape'.  That strongly indicates a very significant relaxation in planning and legal safeguards, posing a real risk to a loss of protection in areas such as the environment and protection for workers.  As a stop gap, they are focussing on 'efficiency measures', which is a euphemism for cutting budgets to the bone. The most likely main target is welfare.  

We’re using the CEF system Crisis Metrics and a predictive model for the sector in 2023 to track and report the developing crisis, as we did during Covid.  We are reporting what's happening and key risks and opportunities for charities to respond in our Monthly Crisis Assessment Update.

UK CHARITY SECTOR 2023 - PESTLE ANALYSIS

We’re using the CEF system Crisis Metrics and a predictive model for the sector in 2023 to track and report the developing crisis, as we did during Covid.  We are reporting what's happening and key risks and opportunities for charities to respond in our Monthly Crisis Assessment Update.

Our data shows that sector resilience has been falling since late 2021 and that we entered this crisis less resilient than we were during Covid.  Our predictive model indicates that this crisis will be both deeper and longer than Covid.  We estimate that the financial impact will be increasingly felt through to end 2022 and at its worst in the first quarter of 2023.  There are very high levels of uncertainty but, with no positive indicators, we believe that it will be a very bleak winter whatever happens, with a high risk of a significant number of permanent charity closures.    

Increasing Demand.  The impact of inflation on personal costs and potentially very large cuts in public services could potentially hugely increase demand for charity services. 

Increasing Cost.  Inflation will both increase charity operating costs and reduce the value of donations.  For those able to respond in some measure to the increased demand above, that will further drive up their costs. 

People.  Although funding is the most urgent need, the impact on our staff and volunteers is arguably the most important - they are our single greatest asset.  Many are low paid, and inflation will drive up their personal living costs and also the pay disparity between the charity and other sectors.  Work pressures will increase in the face of increasing demand and our inability to respond to this and our inability to effectively tackle the apparently endemic abuse will further erode trust in leadership.  Recruiting and retaining staff and volunteers will become increasingly difficult and supporting their wellbeing and mental health increasingly important.  

Funding Gap.  Our fundraising data shows that this has become increasingly challenging since late 2021.  We are seeing numerous community foundations launching appeals and some grant makers are launching crisis funds, but nothing like on the scale of Covid.  We estimate the likelihood of any sector specific funding from Government to be pretty much non-existent.  Our (very crude) estimate of Covid funding was £5 billion and we cannot see anything remotely like that being made available, although this crisis may be even greater.  The coming public sector budget cuts will impact the many charities that are reliant on public sector contracts.  Many of these are already being delivered below cost price and further cuts are likely to be untenable for many. 

#SURVIVEANDTHRIVE - CRISIS SUPPORT FOR CHARITIES

Eight online health checks, the huge information hub, Quality Mark and 3 online directories.

• Funding Finder - click through to more funders than any other grants directory, categories for Crisis Funding, Core Funding and Small Charities & Community Groups and 50+ downloadable grant lists.
• Help Finder – find advice, pro bono support and free services and products, including free fundraising support and companies that make product/financial donations.
• Data Finder - finds data for funding bids, fundraising research, impact reporting, planning and campaigning. 

Plus the system health check now includes crisis assessment, the Charity Sector outlook supports your planning, there’s the Crisis Toolbox. As well as guides on how to how to find new sources of funding, reduce your energy costs, save money without cost cutting  and the crisis hub, with links to even more support.  We also use the system’s Big Data for our monthly crisis update – the latest information on what you need to know and do.  

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SWOT - KEY ISSUES FOR CHARITIES IN 2023

Nobody knows, but based on my analysis, here are what I think the key issues foir charities should be thining about for their SWOT analysis and planning. 

• The Charity Sector Data store shows that many charities are still reporting poor strategic and operational planning. 
• Committing resources to undeliverable plans isn't ambitious, it's planning to fail. 
• Review your plans to test these and ensure they are deliverable and will maximise your impact. 
• As part of this, review your risk register and contingency planning
• Ensure that key and emerging risks have been identified and you have action in place to monitor and manage these.
• Consider making wellbeing, being inclusive and treating people with respect a key element of your planning.
• That may involve some cost but is primarily about the culture of your charity and behaviour, particularly trustees and management.
• That's about leadership and management, not budgets.  
• Get on top of your finances. 
• Are your planned income streams realistic and have you taken into account the scale of potential cost increases?
• The quality of fundraising bids now counts more than ever, and fundraising is the lowest rated metric of the 21 tracked by the Data Store.
• Review cost control - savings are quicker to achieve and more controllable than income and it's an area that is frequently ignored, making it an opportunity.   
• Assess your charity's sustainability.

The Charity Excellence will enable you to do all of that.  The strategy, risk, income and finance & resources questionnaires will enable you to do so quickly and easily, and your interactive dashboard will report your resilience and sustainability - and connect you to the resources and organisations providing support that you need.  You can also use the toolkits and checklists in the Resource Hub Charity Toolbox to assess and plan your own response to the crisis.

Better still, join our community by registering now to access the system tools, huge resource base and Funding Finder database. Everything is free. 

A Free One Stop Shop for Everything Your Charity Needs

Eight online health checks, the huge information hub, Quality Mark and 3 very simple to use online directories.

• Funding Finder - click through to more funders than any other grants directory, categories for Crisis Funding, Core Funding and Small Charities & Community Groups and 50+ downloadable grant lists.
• Help Finder - searches 100s of organisations to find advice, pro bono support and free goods and services to save you money.
• Data Finder - finds data for funding bids, fundraising research, impact reporting, planning and campaigning. 

Plus the system health check now includes crisis assessment, the Charity Sector outlook supports your planning, there’s the Crisis Toolbox. As well as guides on how to how to find new sources of funding, reduce your energy costs, save money without cost cutting  and the crisis hub, with links to even more support.  We also use the system’s Big Data for our monthly crisis update – the latest information on what you need to know and do.  

Fast, Simple & Everything Is Free

To find the funding and free help you need – Register Now