Expect a challenging economic environment for the foreseeable future, charities warned

20 Jan 2021 News

Charities should plan for an uncertain and challenging economic environment for the foreseeable future, NCVO has said.

The annual Road Ahead Report 2021 report, published today, identifies and explains trends that are shaping the sector and are likely to have an impact on organisations in the future.

This year the report will be available to everyone, not just members.

Sarah Vibert, director of membership and engagement at NCVO, said: “There has been much talk during the pandemic about recovery, renewal and the sort of society we want to build post-Covid. The critical role of civil society in this endeavour cannot be underestimated.”

She added: “Yet, at a time when the sector has never been more needed in terms of supporting people and communities, it has never experienced greater challenges in terms of reduced income.”


The report reads: “The unpredictable nature of the Covid-19 emergency and the potential for future lockdowns means the financial outlook for 2021 remains volatile. This makes economic forecasting difficult.”

Nonetheless, NCVO notes that if the rollout of the Covid-19 vaccine goes according to plan, “we could see the UK economy bounce back relatively quickly”.

Yet the pandemic coupled with significant disruption to UK and EU trade following the end of the Brexit means charities “should plan for an uncertain and challenging economic environment for the foreseeable future”.

The report states that organisations will, therefore “need to ensure they can be as responsive and adaptable as possible”. This will mean moving away from long or medium-term strategy and grappling with the emergency response.

NCVO notes “unemployment is rising and is likely to rise further”. Indeed, as of August 2020, Pro-Bono Economics estimated that 25,600 jobs have already been cut and that a further 34,100 more people in the sector could lose their job by the end of the year.

Covid-19 has also increased the gulf between rich and poor, with worse-off households seeing savings drop and debts rise.


The report states that the immediate impacts for charities around Brexit “appear to be limited”.

It suggests looking at arrangements for processing data and states the ending of free movement will have implications for charities seeking to recruit, particularly for very specialist roles.

NCVO adds: “The UK government prioritised a higher degree of control over policy in negotiations, which is reflected in the final deal. Because of the novel nature of this agreement, it’s not clear how this will play out.”

It also states “the United Kingdom could split over the next couple of years” as we could see Scottish independence.


The Road Ahead report suggests that technological trends accelerated by Covid-19 “are unlikely to reverse”. 

Although growth in digital has many benefits, the pandemic has also highlighted the existing charity digital skills and infrastructure gaps, making this transition challenging.

Digital technology has been crucial in mobilising the general public during Covid-19. Mutual aid groups often organise entire activities via social media, particularly through Facebook and WhatsApp.

At the same time, digital exclusion has also prevented some people from volunteering, particularly those from low-income backgrounds or those over a certain age.

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