Five trends that matter for foundations: NCVO’s Civil Society Almanac
Hello – let me start with an introduction. It’s a pleasure to join ACF as Interim Head of Policy, following in the footsteps of the excellent Richard Jenkins who has moved on to work with the Tudor Trust. I look forward to meeting ACF members in the months ahead.
I had an unusual first day on the job yesterday: joining my former colleagues at NCVO for the launch of their 2017 Civil Society Almanac. Their flagship publication provides an overview of the voluntary sector’s shape, size and financial trends. Whereas ACF’s Giving Trends report looks through the lens of foundations and their giving, the Almanac looks from the receiving end, by using charities’ accounts data. This means it can help set foundations’ giving in context, enabling them to consider grant-making trends alongside other financial trends.
Here are five trends that were highlighted at the Almanac’s launch that I think particularly matter for foundations.
1. Local cuts
The starkest message was a familiar one: the impact of local government funding cuts have continued to fall hardest on small and medium-sized charities. They have also fallen on particular types of charities: employment and training, social welfare and infrastructure organisations.
Falling grant funding is a long term trend, but the government’s approach to contracting has exacerbated the problem. These contracts are hard to win in the first place and often only cover the bare bones of service delivery. There is little sign of this changing in the immediate future.
2. Earned income continues to rise
One of the more encouraging signs is that many charities are generating more earned income. This won’t suit all organisations (particularly the smallest), but where they can, charging for their services or selling additional products and services can help to subsidise charities’ missions.
As with the first trend, foundations may like to consider their response. With the value of foundation grants now exceeding those of government, their funding approaches can make a big difference. For example, where appropriate, foundations can help to improve charities’ sustainability, and manoeuvrability, by providing core funding.
3. Brexit bump – but what next?
Giles Neville, head of charities at Cazenove Capital, spoke briefly at the launch as sponsor of the Almanac. He highlighted the recent boom in investment asset values, following the EU referendum. This is likely to see many foundations’ resources increase in the short term. However, the longer term outlook post-Brexit is far more uncertain, with the possibility of a downturn.
Many foundation trustees will want to consider how any short-term gains can be used to best effect in light of potential future scenarios.
4. Geography matters
While the Almanac is brilliant at describing headline trends, one of the pitfalls of using national level datasets is that they rarely do justice to local variations. In a recent report that I wrote with Lloyds Bank Foundation, for example, we highlighted the fact that ‘the economic recovery’ had barely been seen outside London and the South East.
Community foundations and others with a local focus will be better placed to assess all of these trends in light of their local context. They will also want to consider potential future variations – if public funding falls further, it will affect areas with a heavier reliance on public funding and higher public sector employment; if EU funds are withdrawn, it will have greatest effect in areas that currently benefit from those funds – Wales, the North East and South West. If the challenges are therefore about who decides where and how funding is delivered, might foundations have a role to play in making the case for equitable settlements on behalf of their beneficiaries, or supporting them to make the case themselves?
5. More data = better insights = better decisions
Finally, Rachel Rank of 360Giving spoke about the possibilities if more datasets were opened up.
The new “Grant Nav” platform (which uses 360Giving data) already enables searching by area, topic or other keywords – but it is only as useful as the underlying data. The more foundations and public bodies that release their data, the more comprehensive its coverage will be. This could lead to much richer insights that get beneath the headline statistics, as important as these are, to help foundations and other charities in the difficult decisions they need to make.
Rachel and her team would be glad to hear from any ACF members that are interested in exploring this further: firstname.lastname@example.org
For those working in the housing and homelessness and asylum, refugee and migration sectors, ACF is also holding an event on 17 May - Using data to achieve shared goals and answer shared questions. Click here to book your place.