advice charities and the credit crunch
DESCRIPTION
An nfpSynergy presentation on how advice charities are affected by the recession, and how they can combat the effects of the credit crunch. Includes data on how the recession is affecting charity income.TRANSCRIPT
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• The effect of recession on the charity sector
• The effect of recession on advice giving charities
• What advice charities can do in difficult times
Overview
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What we know
• Not as much as we should – need to record our experiences
• Great Depression – charities did well. One study looking at voluntary funded hospitals found short term hardship but surprisingly robust income
• Study looking at last 5 US recessions shows slowdown in charitable donations (giving falls on average by 1.3% corrected for inflation)
• Certain income streams/charity sectors are disproportionately hit
• 1990s recession – we have comprehensive records for charities
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Income of charities affected by economic performance
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-10%
-5%
0%
5%
10%
15%
20%
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Year
Gro
wth
Total Income Growth
GDP Growth
= Delayed effect – average delay 17 months
Base: 550 charities Source: Dimensions, Charity Trends, CAF
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Cumulative Growth of Total Income in real terms (1981=100)
100
200
300
400
500
600
700
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Year
Tota
l Inc
ome
Gro
wth
0
20
40
60
80
100
120
140
160
180
200
GD
P G
row
th
Total Income
GDP
Trend
Economic downturn followed by slower Total Income growth
Base: 550 charities Source: Dimensions, Charity Trends, CAF
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-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Year
Gro
wth
Economy effect on Voluntary Incomes have a 10 month delay
Voluntary Income Growth
GDP Growth
= Delayed effect – average delay 10 months
Base: 550 charities Source: Dimensions, Charity Trends, CAF
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Cumulative Growth of Voluntary Income in real terms (1981=100)
100
200
300
400
500
600
700
800
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Year
Volu
ntar
y In
com
e G
row
th
0
20
40
60
80
100
120
140
160
180
200
GD
P G
row
th
Voluntary Income
GDP
Trend
Economic downturn followed by slower Voluntary Income growth
Base: 550 charities Source: Dimensions, Charity Trends, CAF
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Characteristics of best and worst performers in last downturn
Medium sized
Homelessness & Disability
Religious Charities (welfare)
Increased Fundraising
Small
Eclectic minor causes
Religious Charities (missionary)
Decreased Fundraising
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Real terms Total Income of Big and Medium Charities has far outgrown that of Small CharitiesCumulative Total Income Growth – By charity size (1980=100)
0
100
200
300
400
500
600
700
800
900
1000
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Big - £20m+
Medium - £2m-£20
Small - < £2m
Big and Medium Charities have strongly outgrown Small charities in Total Income
Base: 156 small, 250 medium and 142 Big charities Source: Dimensions, Charity Trends, CAF
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Not all charities/areas were equally affected
• Children’s and Animal charities were most resilient
• International Aid is not primarily affected by the economy but events
• Income streams were important – where the money came from
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Help giving charities in recession – real examples
0
5000
10000
15000
20000
25000
30000
35000
40000
4500019
7919
8019
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
07
0
50000
100000
150000
200000
250000
MIND
Samaritans
Shelter
Crisis
Barnado's
Inco
me
£,00
0sIncom
e £,000s
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Income challenges
• In 1990s recession income streams were pressured particularly legacies and investments
• Donations can peak during recession and then decline coming out of a recession
• Problems continue after headlines recede
• 1993/1994 was toughest time in last recession – 2010/2011 this time
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Cut backs in general spending“Do you expect to cut back on your spending in any of the following areas in the next 12 months?”
19%
27%
27%
32%
35%
31%
15%
17%
20%
20%
25%
33%
-26%
-25%
-25%
-25%
-17%
-16%
-9%
-9%
-8%
-6%
-5%
-4%
-60% -40% -20% 0% 20% 40% 60% 80%
Giving to charity
Gas bill
Petrol
Weekly food shopping
Clothing
Eating out
Definitely not Probably not Not sure Yes, probably Yes, definitely
Base: 1,000 adults 16+, Britain.
Source: Charity Awareness Monitor, Nov 08, nfpSynergy
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Do you believe you may be made redundant or become unemployed due to the current economic climate?
15%
50%
25%
10%
0%
20%
40%
60%
80%
100%
Yes No Don't know No answer
Dec-08
Base: 938 respondents those who work
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Respondents’ concerns about young runaways“Thinking about the issues related to child welfare, please state how concerned you are about them”
41%34%
25%
38%
18% 32%
29%
25%
9%
20%35% 14%
0%
20%
40%
60%
80%
100%
Jan 08 Jul 08 Sep 08 Jan 09
Extremely concerned
Very concerned
Fairly concerned
Base: 1,000 adults 16+, Britain.
Source: Charity Awareness Monitor, Jan 09, nfpSynergy 20
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Respondents’ concerns about the health of pets in the UK“Thinking about the issues related to animal welfare/protection, please state how concerned you are about them”
30% 31% 33%
22% 25% 20%
7%
18%
9%
0%
20%
40%
60%
80%
100%
Jan-07 Sep 08 Jan 09
Extremely concerned
Very concerned
Fairly concerned
Base: 1,000 adults 16+, Britain.
Source: Charity Awareness Monitor, Jan 09, nfpSynergy 21
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Respondents’ concerns about prompted issues related to experience of financial difficultiesPlease indicate how concerned you are about the following issues:
Base: 1,000 adults 16+, Britain.
Source: Charity Awareness Monitor, May 08, nfpSynergy
17%
17%
24%
28%
26%
29%
15%
20%
21%
20%
25% 17%
14% 19%
24%
22%
18%
23%
-60% -40% -20% 0% 20% 40% 60% 80%
Being able to make mortgage repayments
The risk of losing your home
The risk of a partner developing a serious health problemwhich would affect their ability to work
Having to turn to a charity for help if you were experiencingfinancial difficulties
The risk of developing a serious health problem whichwould affect your ability to work
Having to ask the state for help if you were experiencingfinancial difficulties
Not at all concerned Not very concerned Fairly concerned Very concerned Extremely concerned
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Advice challenges
• Higher caseload
• Different types of case
• Difficulty balancing short term and long term needs
• Reduced funding – less ability to generate funds
• Government funding cuts
• Stress on key partners
• http://www.thirdsector.co.uk/news/Article/896396/Soaring-demand-leads-smarter-ways-working/
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Advice solutions
• More staff
• More support for existing staff
• National Debtline – received twice as many calls – up to 1,600 calls a day
• Secured extra government funding till 2011 – recruited extra staff
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Advice solutions
• Better use of staff
• Better systems to help staff
• Samaritans – improved phone system – diverting unanswered calls to open lines elsewhere
• More volunteers – helping paid staff / freeing up resources – effective volunteer management stretches resources
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Advice solutions
• Less bureaucracy
• Make it easier to do the job
• Retail Trust – went from paper to screen admin taken away from frontline staff
• Increased links with its sector to secure funding
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Advice solutions
• Training improvements
• Faster/more flexible training
• Citizen’s advice direct in Scotland – Fast track volunteer training
• Coping with high demand on short notice
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Advice solutions
• Rationalise the service – concentrate resources
• Shelter – reduced funding meant restricting hours of advice
• Concentrated resources (8am-6pm) – higher levels of assistance with reduced costs
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Planning for the challenges
• Talk to government – including opposition parties – forewarned is forearmed
• Have a plan – what would you do if funding was cut by 1-10%
• Have a more serious plan – what would you do if funding was cut 10-20%
• Etc. etc.
• Talk to your key partners about their plans
• Talk to others in the same/more extreme circumstances
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Fundraising in a recession
• Tougher
• Not a time to cut back on fundraising!
• Time of greatest need is the worst time to stop asking for help
• Expressed need can help
• Cat’s protection – lost money in Icelandic banks
• Donors made up the lost money
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CAB fundraising
• Grants are the main source of income
• Government matters – elections matters
• Everybody can help
• Pressure your MP/prospective MP – get them on record before the election!
• Emphasise cost savings of GP based advice – it is money saved not money spent
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Summary
• Recessions affect charities
• Tough times ahead
• Innovation and flexibility can combat uncertainty
• Kick up a fuss
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