There was an interesting article in this week's Third Sector magazine (6 July).  I shouldn't have received it at all... I cancelled my subscription sometime ago in an effort to be green...I read their news articles online usually, so was somewhat surprised (and shamefully delighted - please don't hold it against me!) to receive the magazine through the letter box.

In this article called The Future of Fundraising, Richard Gutch asks the question: "When do you stop being a government contractor and start being a charity?"

It's a good question isnt it!

Richard makes the point that many of our biggest charities in the UK, receive significant amounts of government funding and it is they that are facing extremely hard times as the cuts are made to public expenditure.

Back in May, Richard had interviewed CEO's in 9 charities asking them the same question.  He found that many of them had not had to do much fundraising at all, so awash were they in government money. In some cases income from fundraising was a little as 10% of overall funds.

"one described their charity as like a branch of the NHS..."

About 40,000 charities are today relying...RELYING...on government contracts to run their charities and deliver essential services to some of the most vulnerable people in the country.  That's 25% of our entire voluntary sector, with some of the largest charities in that 25%.  What this may mean we can only have nightmares about.

Richard suggests there are now two questions that we and charities must ask:

  1. What should the role of voluntary income be in maintaining services?
  2. Will we be able to generate more voluntary income?

The answers to these questions will only be answered in years to come as we simply cannot know yet what the outcome of the next 5 to 10 years will be.  As you may have read my previous posts, you will know that I am suggesting that there are very tough times ahead for each and everyone of us and some difficult decisions are going to have to be made very soon.

Back in 1998 I future gazed and saw that with the European Social Fund being significantly withdrawn for the 2001 - 2006 programme, many charities, which had then been relying on that funding would go 'out of business' and many others would merge with other organisations.  Sadly I was right about the closures and feel that merging is a good use of resources.

So my vision for the charitable sector of the future is a strong one, and one that has taken a good long look at itself, asked these type of very hard questions and has emerged phoenix-like from the flames.

There will be more merging, there will be more charities looking to relocate to less expensive head offices (why choose London?), there will be more outsourcing of essential services (such as admin and fundraising).

This could be a boom time for the freelance Pro!

So hone those skills and as I have said before brace yourselves for what is to come.  This is going to be big bust with little boom!

Ok, back to the article...

The other question being raised is about public opinion.  Richard says:  "The traditional mantra that public donations should not be used to fund services that the state should pay for might have to be reconsidered"

How do you feel about that?  In my opinion, the state can't afford to pay for these services, which is why the Voluntary Sector picked up the role all those years ago...when did that actually start to happen or has it always been that way?  We have to stop expecting the government to look after us - they can't and what's more it has made us into a country unable to fend for itself.  We've become reliant upon government and therefore have been made or have made ourselves vulnerable.

Becoming reliant on anyone or anything is always bad news.  I have seen many charities reliant on fundrasing income, those too small to go for government contracts and so are no better off than those who are about to have their feathers trimmed.

So what is the answer to all this?

If I knew that, I'd be the Prime Minister!  (Do you think he knows?)

Here's my take on it.

Charities will need to become far more versatile at their fundraising efforts and have a complete strategy across the board of every kind of income source.  A mix of restricted and unrestricted funding and no more than 15% reliance in any one area.  Lastly, although I'm sure there is more than this...charities will need to completely overhaul the way they operate in terms of governance - administration, delivery, fundraising  - eveything!

The public are going to have to get off their high horses about charities providing services which they deem the government "should" be providing if they want those services to be around at all (see above rant) and allow charities to properly fund their core costs (that's another rant for another day).  Charities will soon be able to prove that they are operating with minimal costs - or someone enterprising will have set up a business (yes a profit making business) to provide charities with a central service, making the costs of operating a charity a minimal expense.  I know of some all's beginning to happen.

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