Review: What did 2017 bring for charities?

At the beginning of the 2017, former Prime Minister David Cameron was appointed the new president of Alzheimer’s Research UK. It was a somewhat misleading start to the year to assume politics and charity could work hand in hand.

Much like 2016, which saw the dual shocks of Brexit and the rise of Donald Trump, 2017 was still very much tainted by the political landscape and the charity sector was burdened by uncertainty.

Brexit

In the first full year since the EU Referendum, it doesn’t come as a surprise that 2017 was totally dominated by Brexit. Ifs and buts played on charities minds as they prepared for the best and worst case scenarios.

Of course the government didn’t provide much ease, as rumours were rife of another referendum, before Theresa May finally triggered the two year process in March. Unfortunately for charities, the process is likely to have some less than positive effects on finances.

According to research from the Directory of Social Change, charities are at risk of losing over £250 million through Brexit, although the full amount could be “far higher” due to the way many funds are distributed by intermediary agencies in the UK, making comprehensive data difficult to obtain and analyse.

The research revealed the beneficiaries of “hundreds of charities” working in particular sub-sectors like overseas aid, research and conservation will likely be hardest hit, “unless the UK government acts swiftly to replace these funds”. It also found “strong disparities” in the distribution of funds across the UK home nations means the impact will also vary significantly across regions. So it’s safe to say, charities have been worried.

Legislation

Meanwhile, the government hasn’t provided much reassurance for charities. Both the Spring and Autumn Budget’s revealed little in the way of favours for charities, despite numerous concerns raised by the sector.

Furthermore, the Lobbying Act has been playing on minds, with many charity leaders claiming to feel suffocated by what has been dubbed a “gagging order”. The Lobbying Act dictates what charities are allowed to do publicly during the year running up to elections, in order to make sure people or organisations don’t have an influence over the vote.

But refusing to feel in any way ‘gagged’, charities spoke out. This year, over 100 charities and some of the biggest organisations in the country such as Greenpeace and Save the Children, raised their voices. In an open letter, the charities claimed campaigning was being lost from public debate due to “draconian” requirements of the Lobbying Act.

In 2016, Lord Hodgson’s report into reform of the Act proposed amendments such as a reduction in the regulated campaign period to four months before an election, changes to the rules on joint campaigning and a reduction in the scope of the Act to include only activity intended to influence how members of the public vote.

The government was initially considering the Hodgson recommendations, but in the lead-up to the General Election in June, many charities complained that a lack of clarity about the rules on campaigning meant they felt unable to raise issues.

Despite an increasing amount of calls to implement the Hodgson recommendations, the government announced in September it would not be implementing them. At the time, it cited a lack of space in the legislative programme to pass the necessary law and that the Electoral Commission was not content with some technical aspects to the proposed changes.

But refusing to take no for an answer, charities spoke out again. In October, three major bodies representing thousands of charities wrote to the Electoral Commission, calling for a debate over the reform. NCVO, ACEVO and Bond, which collectively represent a huge proportion of UK charities, asked the Electoral Commission to explain which proposed changes it opposes to and on what grounds.

In a letter sent to Claire Bassett, chief executive of the Commission, the three organisations requested a detailed explanation of why the Commission opposed making such changes to the Act. “What’s needed is an open conversation about how the rules on non-party campaigning can be changed so they meet their objective of ensuring fair electionsm,” NCVO chief executive Sir Stuart Etherington said.

“There is consistent evidence that the law has a detrimental impact on the ability and willingness of the voluntary sector to speak out. We need prompt answers from the Electoral Commission so we can get that discussion underway.”

Governance

The charity sector hasn’t been entirely dominated by political issues this year, however. Successful governance has also been a hot topic. Ever-keen to ensure charities are run to the best of their abilities, regulators have pushed for a greater focus on good governance.

In July, the new Charity Governance Code was released, outlining the standards that all charities in England and Wales should aspire to. The Code contained three major recommendations: reviews for larger charities every three years; greater openness; and limits on how long trustees may serve.

Commenting on the Code, Etherington said there is a “clear consensus” within the sector that there needs to be a greater focus on governance. “With this in mind, I envisage that we will soon see a commitment to following the Charity Governance Code become a requirement from many funders.” he said. “Taking action now is a way of getting ahead of the game.”

Technology

Unlike other years, there was an overwhelming focus on improving technology in 2017. While the inclusion of digital technology in charity strategies is increasingly becoming the norm, charities are still being urged to look for new ways of adapting to a digital world.

According to the Advanced Trends Report 2017, many charities are still not “fit enough for the digital era” and need to embrace cloud technology to adapt to the future. The report revealed 65 per cent of charities use cloud-based technology, yet nearly one in four (26 per cent) do not have access to real-time data and 40 per cent do not have the right tools to do their job effectively at all.

The software and services company said charities will be “held back” if they don’t embrace the cloud at the heart of their operations and use it to run core functions such as donor interactions and financial management.

But it’s not all doom and gloom, technology has also had a huge impact on UK charities this year. Social media has increasingly become a successful platform for fundraising and the methods of donating have soared.

Trusteeship

A major report published by the Charity Commission towards the end of the year highlighted the need for charities to do more to promote diversity on their boards. The report, commissioned by the Office for Civil Society and the Charity Commission, and delivered by a consortium led by Cass Business School and the Cranfield Trust, found there is a severe lack of diversity on boards, with the majority of trustees deriving from similar backgrounds and skillsets.

Charity Commission chief executive Helen Stephenson warned the research shows trustees “do not reflect the communities charities serve”. “Charities are therefore at risk of missing out on the widest range of skills, experience and perspective at board level,” Stephenson said.

The findings revealed trustees lack relevant digital, fundraising, marketing and campaigning skills at board level. It also highlighted concerns about their skills in dealing with fraud and external cyber-attacks.

“Uniformity at board level also puts charities at risk of adverse group dynamics, including dominance by individuals or complacency of vision. Our casework bears out that problems in charities often have their root in a culture at board level which allows inappropriate behaviours and poor decision making to go unchallenged,” Stephenson added.

“Diversity of experience, approach and personality helps guard against such problems and enables any organisation to foster a culture that is conducive to good governance.”

Another year has passed us, and sadly, challenges facing the sector haven’t got a lot easier. Did Cameron’s appointment showcase the beginnings of a blossoming relationship between the charity sector and the government? Absolutely not. Has the burden from Brexit disappeared? Not a chance.

But amid it all, what we have learned from the news in 2017, is that the charity sector has come together to speak out, to take on new challenges, to embrace change and to thrive under difficult circumstances. Take a read of the latest issue of Charity Times for experts’ views on the key items on charity leaders’ agenda for 2018.

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