Charities expect innovation and digital growth to outlast the pandemic 

06 Jan 2021 News

Most charities plan to continue to develop digital working and collaboration in 2021, according to new research.

Organisations that took part in the Pro Bono Economics (PBE) Covid Charity Tracker, produced in partnership with Charity Finance Group and the Chartered Institute of Fundraising, said they plan to build on the innovation borne from the Covid-19 crisis.

However the research also highlights challenges facing the sector, with income under pressure and demand rising, with sector leaders emphasising that the ability to be innovative was underpinned by financial sustainability, which continues to be under threat for many charities. 

Greater use of digital 

The research finds that three quarters, 77%, of charities have made greater use of digital and technology during the pandemic, while two thirds, 67%, have innovated to deliver services remotely.

In 2019 10% of charities reported in the Digital Skills Report that they had been through a digital transformation process that was embedded in all they did. 

The figures from PBE show seven in 10 charities want to make more services digital and deliver new services remotely over the next 12 months. Over half, 54%, want to increase their use of technology and digital within their back office functions. 

Meanwhile, 50% of charities are looking to collaborate more with others in their sector, something 30% were reporting undertaking in August last year. 

'The funding gap is a flashing red light on the sector’s dashboard'

Anya Martin, senior research and policy analyst at Pro Bono Economics, said: “Much about the months and years ahead are uncertain and the funding gap is a flashing red light on the sector’s dashboard.

“Yet a determined focus on collaboration and digital innovation means it is possible the charity sector emerges from the pandemic more closely knit and more efficient in the long-term – ultimately able to help more people, more effectively.” 

The research adds that 35% of respondents wish to enhance their relationships with business. However, previous surveys revealed just under a third, 28%, of charities have reported a decline in corporate giving in 2020.

The research also highlights some other challenges facing the sector.

For example, one in four charities anticipate it taking at least two years for income to return to pre-Covid levels, and 81% expect the pandemic to negatively affect their ability to deliver their objectives over the six months ahead. 

Charities are also expecting demand for their services to continue growing in 2021. Many intend to continue adapting. Indeed, 81% reported an intent to seek alternate funding sources and 71% to deliver more services online.

'We have not been able to match the normal levels of income'

Daniel Fluskey, head of policy and external affairs at Chartered Institute of Fundraising, said: “The story of Covid through 2020 for the charity sector has been one of huge challenge, but also of resilience, flexibility, and innovation. The loss of income told to us by the sector in this research means that we have never before seen such a threat to the delivery of charitable services and public benefit that charities exist for.

“Where charities have been able to carry out fundraising - either through limited activities in a safe and responsible way, or through new channels and innovative appeals - people have responded generously, but we have not been able to match the normal levels of income our beneficiaries rely on for the services they need.

“As we look ahead to 2021, we will need to learn the lessons of what worked last year and embed some of the flexibility and innovation that we've seen in fundraising activity. But we also have to be realistic that the charity sector will start 2021 smaller than it was in 2020 and that a full 'recovery' is unlikely to be seen this year.”

Roberta Fusco, director of policy and communications at Charity Finance Group added: “The capacity to remain flexible and adaptable relies on financial sustainability, which is under serious threat for many. 

“Charities have stepped up to deliver and adapt at pace and have pulled on all the levers at their disposal, but they still face 2021 with hope - now government needs to do the same in their support of never more needed charities and not give up on the millions of beneficiaries who rely on the public benefit they deliver.”

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