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A Strong Bond

05 October 2020 by Sara Drake

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There is a unique partnership between charities and the public

Soccer Aid 2020 raised £9.3mn when the charity football match aired on 6 September, a record-breaking amount for the annual UNICEF event. At a time when COVID-19 has led to recession and mounting job losses, the power of a campaign to elicit such public generosity is not only heartwarming, but a potent reminder of the symbiotic relationship between the public and charities.

The sector’s dependence on the public for financial support and the public’s dependence on the sector for aid has been thrown into sharp relief during the crisis. As Val Cipriani, writing in Fundraising magazine last month, pointed out “when coronavirus hit the UK in March and lockdown was announced, two things became very clear very quickly for the charity sector: one, a lot of people were going to need a lot of help and fast; and two, fundraising income was going to take a massive hit”.

At the start of the crisis, the NCVO estimated that a minimum of £4.3bn in income had been lost, with some suggesting that this figure might be just the tip of the iceberg. With charity shops closed, fundraising events or face-to-face activities no longer able to take place, and significant numbers of charity staff furloughed, resources were under strain at a time when services were needed more than ever.

The UK government sought to plug some of the gap, providing frontline charities tackling the effects of the pandemic with a £750mn support package to continue vital work. Help subsequently arrived from others, such as the Lloyds Bank Foundation, which recently closed applications for £50,000 grants to help around 150 small and medium-sized charities provide support to people experiencing complex social issues including dependency, homelessness and domestic abuse.

How those charities performing less of a frontline role will survive is less clear. Dipping into reserves is not a sustainable option – Third Sector reported in early April that only 25% of charities were estimated to have reserves large enough to last three months.

Charities have needed practical advice and support throughout the crisis and the Institute has played its part in this, with Louise Thomson, Head of Policy (not for profit) producing guidance on the challenges facing the sector, from how to hold AGMs and trustee meetings virtually to advice on reopening safely once lockdown measures eased. This guidance and support is freely available to all those in need within the sector.

While charities have needed support for immediate issues in recent months, this hasn’t removed the need for the sector to continue its development in areas it was progressing prior to the pandemic. The results of the Charity Governance Code refresh report, published in August, have shown the depth of the sector’s concern about diversity, equality and integrity. There is strong support to reframe and augment the Integrity Principle to embrace and reflect recent changes in the operating environment. There is also wide support to broaden the Diversity Principle to address aspects of inclusion and equality. We provide secretariat services for the Code and I am delighted that both of these important areas will be addressed when the final report is published.

Diversity is an area of particular challenge for the sector and we looked at ways to improve trustee diversity at the Charity Governance Summit we held last month. We also launched a new white paper introducing a new theory: the Virtuous Circle of Good Charity Governance, an innovative way of demonstrating how good governance delivers great outcomes for the charity, the community it serves and the public it seeks support from. Another paper addressed the growing issue of environmental and social governance. We are seeing an increasing use of ESG factors in investment decisions, reputational risks, environmental awareness amongst consumers and clients and the need to attract talent with different motivations to work, and this has informed our work on the ESG maturity matrix for charities. In an area of growing importance for the sector our white paper outlines the increased prominence of ESG and explains its relevance to modern charities.

We are also supporting the transformation of the sector in our role as one of the convenors responsible for gathering views on the development of the Charities Statement of Recommended Practice (SORP), which sets out the framework for how charities prepare their annual report and accounts. We have been appointed by the SORP Committee to lead the group engaging trustees in the review process looking to make the next version of the SORP more relevant to a wider group of stakeholders.

The announcement of the National Emergencies Trust in August that one in eight people living in the UK expect to seek support from a charity or voluntary body in the next 12 months as a direct result of challenges created by the pandemic, leaves no one in doubt about the importance of securing the future of this sector, which will include the need for robust, effective and proportionate governance.

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