Knowledge & Insight

The charities sector - challenges of the post-2008 era

Mon 28 September 2015

The 2008 financial crash and subsequent economic downturn caused major repercussions across the charities sector. Immediately after the crash, weak economic performance and uncertainty about future growth put a squeeze on fundraising from anxious donors. While in the longer term, cuts in government spending have driven increased demand for many of the services provided by third-sector organisations. Charities have responded to these challenges with innovative and pragmatic solutions as they seek to create sustainable strategies that will enable them to continue to deliver essential services in today’s rapidly changing economic and political climate.

The fundraising environment

Stronger economic growth in recent years has relieved some of the pressure on donor incomes and improved donors’ outlook for the future. Yet these positive developments have been offset by changes within the fundraising environment. Greater investment in fundraising initiatives by many charities has heightened competition for a limited and potentially shrinking donor pool. And an aging donor base poses significant challenges for organisations who are forced to replace lost donors with a younger audience, many of whom may exhibit very different donor behaviours.

Transparency

Recent media investigations have posed serious questions around some of the techniques employed by a number of fundraisers, and this has led to discussion around the need for greater independent scrutiny within the sector. In response, the Charity Commission has stated that it intends to play a more pro-active role in investigating accusations of inappropriate activity. Yet individual organisations must take greater responsibility for their own actions, imposing their own robust standards of behaviour. And if they are to safeguard their “brand” and continue to enjoy the confidence of donors, charities must also provide greater transparency, both in operational practices and in their financial reporting.

Demand for services

According to the PWC report “Managing in the new normal 2015”, which surveys the views of senior fundraising and finance professionals in the charity sector, 70% of respondents said their charity had experienced an increase in demand for services over the past 12 months, and the same number said they expected to see similar growth over the next 12 months. And whilst there has been an increase in the number of charities who say they are not fully resourced to cope with the growth in demand, the good news is that the majority are confident they have the capacity to meet the needs of service users.

Charity executive search

The PWC report also cited “barriers to recruiting and retaining talent” as a significant cause of anxiety for charities, and there’s no doubt that competition for experienced and talented charity executives has increased. A growing number of charities are therefore turning to specialist charity executive search firms like Stone Executive. With a wealth of experience in charity executive recruitment, Stone Executive’s team of charity headhunters can help organisations identify and attract leading talent from across the UK and beyond.

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