Charity Bank launches its State of the Sector report

Dec 17, 2019

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Demand for charity services will continue to rise, while income generation will be a growing challenge in 2020.

The social sector is feeling the pressure of meeting an increase in demand for services, while dealing with widespread budget cuts, research from Charity Bank reveals.

Charity Bank polled 182 social sector leaders for its State of the Sector report, released today, and found that 85% of charities expect demand for their services to grow over the next two years. However, 86% are concerned about future grant funding and 82% don’t think they’ll be able to sustain donations over that period.

Government policy continues to pose a challenge for 63% of respondents, while the sector is split on what Brexit means for them. Almost half (49%) think it will present issues, while 46% are unclear and 13% think it could create opportunities.

Ed Siegel, Chief Executive, Charity Bank said: “The social sector is entering this new decade under a cloud of uncertainty, and with the majority of organisations worried that funding will be more difficult to come by, many are looking at alternative ways to generate income and this can increasingly involve repayable finance. When Charity Bank was founded, the very idea of social investment was controversial - charities and social enterprises were expected to survive on hand-outs from the Government and the public, but today that’s an unrealistic goal. Almost two-thirds (62%) of the organisations we spoke to see social investment as an opportunity for growth. With the recent launch of the Impact Investing Institute, we’re also hoping that social investment will increasingly be seen as a great opportunity for investors that care about the impact that their money can have.

Technology is another area which could deliver income generation for the sector over the next few years; the Poppy Appeal raised £780,000 from contactless donations this year, up from £211,000 in 2018[1]. However, 58% of charities and social enterprises see technology limitations as a challenge for next year.

Ed Siegel continued: “Technology is advancing at a rapid rate and could benefit the sector hugely - beyond making it easier for people to donate. However, as our research shows, lots of the organisations we work with are struggling just to fund their basic operating costs, let alone grow the provision of their services. While investing in technology can feel like a massive up-front cost and is not without risk, it could ultimately improve the services that charities and social enterprises are able to offer, enriching communities and offering a strong return on technological investment for the social sector.”

Download the full report from: charitybank.org/2019

About Charity Bank

Charity Bank is the loans and savings bank owned by and committed to supporting the social sector. Since 2002, we have used our savers’ money to make more than 1,000 loans totalling over £290m to housing, education, social care, community and other social purpose organisations.

Find out more about us here.

Nothing in this article constitutes an invitation to engage in investment activity nor is it advice or a recommendation and professional advice should be taken before any course of action is pursued.

[1] Source: https://www.thirdsector.co.uk/poppy-appeal-raised-780k-contactless-donations-year/fundraising/article/1667664