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The cost-of-living is already felt by many. Whilst it is affecting individuals and families across the UK, it is also having an increasing effect on the charities sector. Our Head of Charities and Philanthropy, Rupert Cecil, meets with Sianne Haldane, Philanthropy Consultant and Founder of Boon Impact, to discuss the key challenges charities are facing. From her personal experience, Sianne unveils the impact of the cost-of-living on fundraising, and despite the challenges faced, how charities are continuing to thrive.

Could you provide an overview of your current work as Philanthropy Consultant?
S: “I work with small and medium sized charities, and with high-net-worth individuals who give to charity or who have set up trusts to do the same. It is clearly apparent for me, that those individuals who are in a position to give, and who do give, have been directing more funding towards cause areas that are directly related to the cost-of-living crisis.

I have been asked to help identify areas of the greatest need for support and to connect individuals with charities that are tackling hunger, poverty, child poverty and homelessness. These charities are under huge pressure to deliver with limited resources and the demand for their services is sadly increasing.”

Are there any charities experiencing a greater impact with the cost-of-living?
S: “From the perspective of charities that I work with, which are across varying cause areas such as higher education, health, the environment, conservation, social mobility, and poverty, all are feeling the impact of the cost-of-living crisis. This has really challenged them in several ways.

Costs have increased to deliver services and even in covering basic operational needs to run an organisation. Many charities are either trimming down on their services that they offer and are unable to achieve the impact that they would hope to. For others, there have been cutbacks where staff are sadly being made redundant as a result.”

How has this affected fundraising across the sector?
S: “Because donors are feeling the pinch, many have seen a bit of a slump in their ability to raise funds from the general public. There is always a worry about donor fatigue for fundraising events too.

Interestingly though, there has been a trend for some more committed donors giving unrestricted funding, which is always helpful for charities!

For these reasons, fundraising is high on the agenda for all of the charities that I am working with. Many are starting to see high value fundraising (philanthropy and corporate fundraising) as areas of potential growth. They are not magic fixes though. To do both these types of fundraising well requires a bit more capacity building, and a strategic approach, plus they are more relationship based so they require time and investment. With corporates thinking about their ESG impacts and strategies, I can see a lot more growth in strategic corporate partnerships with charities.” 

Have you noticed any changes when it comes to fundraising?
S: “Some charities are being quite innovative and are exploring other revenue generating streams such as delivery of services in a more commercial sense. For example, some hospices are charging for catering services, such as on-site cafes or meal delivery to homes. 

On the other side of the spectrum, some are looking at even more sophisticated mechanisms to raise funds, like moving into impact investing – Cancer Research UK was involved in raising an "Impact Medicines Fund" where some of its drugs were being developed and Save the Rhino International was one of the not-for-profits involved in raising the first Conservation bond.”

Are you seeing many charities struggling to survive and is this inevitably going to result in further consolidation in the sector? 
S: “Consolidation in the sector is always a big question given there are already 168,850 registered charities in the UK! Interestingly, according to the charities mergers register (The Eastside Report), is that there were just 48 mergers involving 96 charities in the year to the end of April 2023. This is three fewer mergers than in the year before, and the lowest level since reports have been produced 10 years ago.

The Eastside report says the findings indicate that the support provided by the government and funders helped charities navigate the Covid-19 pandemic without the need to merge with another organisation. Also, charities have generally hunkered down on cost cutting to avoid merging.” 

These seem like unprecedented times but has the sector had similar challenges in the past? 
S: The Financial Crisis in 2008 was also really challenging for charities. Many then were similarly struggling. I would say that was also when a lot of charities, who were traditionally focused on "mass" fundraising, started to really invest in major gift fundraising. The prolonged period of strain since Covid has been particularly tough though for charities, but the silver linings have been the changes in practices around restricted funding and more participation in grant making from the not-for-profits and listening more to beneficiary needs.” 

What should charities consider in order to overcome these challenges?
S: I think depending on the size of the charity, there are different options. For really small charities with a limited budget, try leaning in on your trustees more to support with their networks and fundraising. Also, there is always a desire to grow your reach and supporter base - but make sure that you don't "chase" new supporters at the expense of your existing ones, invest your energy and time in really cultivating those relationships. Try to collaborate with other not-for-profits and potentially even make co-grant applications if it works and aligns with what you are delivering.

If you can, invest in philanthropy capacity building, corporate fundraising as well as developing a legacy giving strategy - these are all growth areas.

Lastly, having an online and a social media profile are important too!

Sianne Haldane is Founder of Boon Impact and is a Philanthropy Consultant providing philanthropy advice to individuals, corporates, and charities.

We look forward to welcoming Sianne to our training for charity trustees this September. More information about these events can be found at https://www.efgha.com/events.html

https://www.boonphilanthropyconsulting.com