Charities will adapt to get through the coronavirus crisis, think tank says

02 Mar 2021 News

Charities can deal with the coronavirus crisis by learning from the 2008 global financial crash, a leading think tank has said.

Nicole Sykes, director of external affairs at the think tank Pro Bono Economics, said that charity income continued to rise during the recession a decade ago despite difficult economic conditions.

She told the March issue of Civil Society Media's Charity Finance magazine: “Charities have adapted before, they will again.”

Charities 'gearing up' for long-term financial hit

One year on from the start of the pandemic, Sykes said: “No one expected it to go on for so long, and no one expected the scale of the extra demand [for charity services]. 

“Now everyone is gearing up for the next two, three, four, five years of dealing with the consequences of this.”

Last year, Pro Bono Economics forecast that charities would lose more than £10bn in the first six months of the pandemic, as a result of both falling income and rising demand.

Referring to the lessons learned by charities after the recession in 2008, Sykes said: “Their funding model changed pretty substantially. The demand for their services changed pretty substantially as well, as austerity impacted their service users and their own incomes.

“But you saw charities adapt, and charity income continue to rise.”

She said that the charity sector is “adjusting to the new reality and knuckling down to the fact that this is a long-term thing”, adding: “You don’t know where that money is going to come from in the years to come. Most charities don’t have a funding horizon that long.”

Out of date budgets

Matt Harrison, the deputy chief executive of the umbrella body Homeless Link, told Charity Finance that his charity’s budget, written before the March 2020 lockdown, was “out of date” almost as soon as it was written.

He said: “It was batten-down-the-hatches for three months. 

“I think our board felt that it was being a bit prudent because I had said we would shut for three months, and not sell anything for six months. 

“But, of course, it turned out I was naively optimistic rather than prudent.”

'Staggered on'

Lawrie Simanowitz, an adviser at Bates Wells, said: “It [the impact of the pandemic] has been bad but charities have staggered on. 

“We thought we would see masses of closures, but that hasn’t happened. Fingers crossed, it looks like there won’t be, although there will be some."

The March issue of Charity Finance magazine is out now.

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