Reading tea leaves #13: recovery is in the gift of the charity

By: 

Cheryl Chapman

Managing Editor, Philanthropy UK

Tracking the impact of the recession on giving...

There is talk of ‘recovery’, ‘green shoots’ and ‘optimism’ in surveys received by Philanthropy UK over the past two weeks, but reading between the lines, perhaps what we are actually starting to witness are, in part, the beneficial effects of the rapid and innovative response to the harsh economic climate by funders and charities.

The recession has brought to life the phrase ‘survival of the fittest’ and a sizeable proportion of organisations on both sides of the giving equation are responding by streamlining or merging operations, finding new ways to collaborate, targeting new donors and innovating in funding.

This week we carry several stories of  landmark funding innovations and new thinking, including a website that has the potential to transform community funding, a new ‘catalytic approach to philanthropy' that could solve the world’s most pressing needs, and the first ever government funding aimed specifically at ‘scalable’ social enterprise.

There is much to be optimistic about as donors continue to step up to the donation plate in ever more creative ways. And charities too are doing their part by cutting operational costs and taking other recession-busting action.

The key findings of the Charity Commission’s third Economic Survey of 1,001 charities, carried out between July and August to illustrate the continuing effect of the recession on charities in England and Wales, are that:

• 52% of charities have taken steps to combat the effects of the downturn. 
• 9% of charities have considered merging, collaborating or forming a consortium with another charity, up from 3% - though still lower than the commission would like. 
• A fifth (21%) of those surveyed had looked to reduce office and energy costs.

Puzzlingly, however, it found only 18% had increased fundraising efforts – which might seem to be a no-brainer.
 
The survey shows that despite reported decreases in fund values and a slight increase in the number of charities being affected by the recession - 56% now compared with 52% at the beginning of the year - almost three-quarters (71%) of the charities surveyed by the Commission said that they felt ‘optimistic’ about the outlook for the next six months.

In The Management Centre’s Global Fundraising Confidence Survey 2009, charities are reportedly ‘seeing green shoots of economic revival’.

Though the survey reveals that, on average, income to non-profit organisations across the world fell by 3% and that 50% saw a drop in income over the past year, with 20% of them seeing their income fall by over 10%, it surprisingly showed that 33% of non-profits saw an increase in income, and 14% reported income growth of 10% or more.

And the survey shows that, worldwide, fundraisers’ confidence is growing, with 56% reporting that they feel more optimistic about donations in the coming 12 months.