Research on implications of the pandemic on charities, and how funders are responding
In spring this year nfpSynergy carried out a perception audit with the John Ellerman Foundation’s grantees and unsuccessful applicants. As part of the project, we asked participants about the impact of Covid-19 on their organisation. Some of the key findings can be read in our previous blog.
In partnership with the John Ellerman Foundation, we repeated this survey between 12th November and 3rd December to gain an updated perspective of the continued impact of Covid-19. 162 John Ellerman Foundation applicants completed the survey. We also explored new areas, including how concerned charities were about the medium to longer term consequences of the pandemic. In summary, the key findings are:
- Funders are still seen by charities to have responded well to the crisis
- Over 80% of those surveyed say they’ve adapted their working practices for the better – up from the spring
- There are high levels of concern about the availability of funding beyond the short term
- 45% of charities said they have had to dip into their reserves to survive the past six months
- Half as many respondents are now reporting that they need emergency funding to survive the next 3 months
- A vast majority have shifted their services online and say these services have been well received by service users
- Staff morale in charities remains low and has declined since the spring
- Three-quarters of respondents would like to see funders turn restricted grants into unrestricted grants to help them to get through the pandemic and beyond
- 4 in 5 would like to see funders increase their lobbying activities towards government on behalf of the sector
Funders are still seen to have responded well to the crisis
The response of funders has been one of the sector’s success stories of the pandemic. 84% of the John Ellerman Foundation applicants surveyed said they believe funders have been very responsive to the pandemic – up from 76% in the spring. The way funders have responded cooperatively has also been noticed and appreciated, with nearly three-quarters (73%) saying that they believed funders have pulled together well in the situation. These positive views were backed up by a number of open comments on the topic, with many praising how ‘fleet footed’ funders had been. As one respondent said,
"We have found that some funders have allowed us to reduce our reporting during this time, this has been extremely beneficial and we would really support this outside of the pandemic. Our organisations are stretched thin as it is and some reporting can be arduous. We believe more precise reporting could help our organisation to manage better."
Some held the view that funders had focused on responding to the very immediate and more frontline challenges (not necessarily a bad thing), but this meant that the longer term, more systematic societal challenges were taking a back seat.
"Our experience is that funders did turn their attention to the immediate presenting needs which perhaps was necessary, but certainly left those of us working on longer term, more systemic and structural reform high and dry. We'd like to see funders coming together to see how they should be collectively investing in 'infrastructure' or what we'd call social change innovation."
There are high levels of concern about funding beyond the short term
There is a great deal of concern about the future, with 85% of respondents agreeing that they are more worried about the long-term than the short-term consequences of the pandemic. As one respondent notes, the next couple of years are the biggest concern:
"Prudent financial management has meant that we had a reserve position which saved us from an immediate cash crisis this year. So our greatest financial concern is about the next 12-24 months. Our ability to recover financially will be dependent on our fundraising income picking up to pre-Covid level again."
This respondent was not alone in having used reserves. 45% said they used reserves to survive the past six months.
"Our unrestricted donations, which we use to support our core operating costs, are around £25k less than they were this time last year. We will need to plunder our reserves next financial year and it's looking like we will not have the funds to 're-stock' them."
Only 1 in 5 respondents said they had received information from funders about their longer-term funding plans, such as when business as usual activities will be accepted and whether long-term funding priorities will change, compounding the uncertainty. Any communication funders can provide on this would be greatly appreciated.
The number saying they need emergency funding to survive the next 3 months has fallen
The percentage of respondents saying they require emergency funding to survive the next three months has halved since the spring, down from 32% to 16%. This could be down to a number of respondents having been successful in obtaining emergency funding since the spring survey. In November/December over three-quarters (76%) said they had received emergency funding over the past six months.
Over 80% of respondents have adapted working practices for the better, but staff morale has taken a hit
The vast majority (81%) of applicants surveyed said they had improved their working practices for the better as a result of the pandemic – up from 66% who said the same in the spring. Likewise, 71% agree that they will be more efficient when things return to normal.
However, these improved practices and efficiencies have come at a cost for staff. 73% of respondents reported that staff have had to increase their workload (up from 63% in spring) and less are likely to agree that morale among staff is high (down to 31% from 38% in spring).
Many have shifted services online and so far, so good
84% of respondents surveyed in November/December said their charity has moved all or part of its services online, while 80% agree online services have been well received by service users. However, charities with smaller incomes were less likely to say this than the larger charities. As one respondent noted, there have been a great deal of changes to service provision this year:
"We provide a range of services, and the have all adapted and developed differently. Some have stopped, others have expanded, others continue but differently, and new ones have sprung up."
Demand is high for more unrestricted funding
Three-quarters of respondents said they would like to see funders turn restricted grants into unrestricted grants to help them to get through the pandemic. As one respondent suggests, emergency grants are a lifeline for the short-term, but the reporting requirements can be too onerous.
"Funding from emergency pots has helped but the short term nature of it and the reporting requirements adds other pressures other than giving some more capacity - core unrestricted grants would really help us at this time."
Likewise, another respondent would like to see more core funding in the future, just to help charities who foresee that they will remain in survival mode.
"It would be helpful if funding organisations could look at offering more core funding for the next few years as project funding may not be appropriate when we are all striving to survive."
Lobby government more on behalf of the sector
4 in 5 respondents agree that funders are an important voice and should increase their lobbying activities towards government on behalf of the sector. More broadly, one respondent’s recommendations for funders were:
"Maintaining that flexibility, being as open as possible about future funding plans, and lobbying on behalf of the voluntary sector for government support would be very welcome."
While another felt it was important for funders to play in role in…
"Signal[ling] the breadth of charitable causes that sustain society, including those that deal with systemic issues. All too many have gone along with the government and given the impression that 'emergency' causes like food banks and night shelters are really all that charity is about."
These findings show that many charities have reacted impressively quickly to the challenges Covid-19 has posed. Services have been adapted to meet new need, working practices have become more efficient and reserves have been carefully managed. But the findings also tell us that the next 12 -24 months could be incredibly difficult – many are predicting funding shortfalls without any obvious solution for plugging the gap. And staff burnout is a real concern. Funders have so far risen to the challenge, but their support over this time period will be crucial. Charities want to know what your funding plans are for the medium term when emergency funds are taken off the table. Can you make more unrestricted funds available? Can you add your voice to the calls to national and local governments to support charities? Funders have passed the test of 2020, but this is only the end of the beginning.