This document discusses the changing landscape for charities in the UK. It notes that while there are over 200,000 registered charities, only 1,400 have incomes over £5 million, and many rely heavily on government funding which is decreasing. It suggests that to be successful, modern charities need to have strategic thinking, financial sustainability, transparency, and a strong focus on outcomes. The sector will need to shift away from solely relying on funding and toward selling services to those wanting to buy them. Overall, the charity ecosystem is changing as government funding decreases and new forms of social financing emerge, challenging charities to adapt.

1. • “A modern charity”
IN
• “The changing landscape”
What might it mean for the
overall charity ecosystem?

2. Paul’s ‘cooking ingredients’
• Brightest thinkers/most skilled practitioners
• Enterprising, growing (faster than competitors)
• Strong brand, well-positioned with stakeholders
• A strategic culture – analysing/planning
• Financially sustainable
• Delivering quality services, with like-minded
partners, that reduce crime
More impact and more influence

3. The UK charity universe in 2011
• 200,000 registered charities
• Total sector income over £50 billion
• Investments £80 billion
• Only 1,400 with income over £5m
• 160,000 with income <£25k
• 20% in the middle ground

4. Universal features of a ‘modern charity’?
• A strategic culture
• Financially sustainable
• Transparent and accountable
• Strong focus on outcomes and public
benefit

5. • So the challenge for the voluntary sector is to gear up
for this
• And to shift its emphasis away from “can we find
someone to continue funding what we are already
doing” to:
o Will anyone want to buy and make use of our
products and services?
o Are there enough people out there who will want
to buy what we do?
o Can we provide our services within prescribed costs
and quality guidelines?
Payment by results

6. The changing landscape
• 38,000 charities receive a government grant or
deliver services under contract
• But 140,000 have no relationship with the state
• Government funding is 36% of sector income
• An increase from 27% in 1991
• There has been a major shift from grants to
contracts – 50/50 ten years ago; 25/75 now

7. Huge cuts in public spending
• £81bn of cuts over next four years to 2014-15
• Central government departments cut by 19%
• Funding to local authorities cut by up to 30%
• And two further years of cuts forecast yesterday

8. ‘Big Society’ may lack traction, but
there are real changes appearing
• Localism Act 2011
• Remodelling public service delivery –
„provider agnostic‟ and payment-by-
results
• New ideas around giving – social
finance
The sector’s ecosystem is changing

10. A squeezed middle
• The large, national household names are riding
the storm…
• …and community organisations continue to
thrive
• But life is getting tougher for middle-sized
organisations

12. Many service deliverers increasingly
dependent on state funding
• Will they become constrained in their
campaigning…
• …and/or relegated to role of largely powerless
sub-contractors?
• “Charities assisting commercial organisations to
maximise their profits” (NCIA)

13. The rise of social enterprise
• Big Society Capital has £600m to invest
over four years
• Will „traditional‟ charities be able to
adjust to new forms of financing?
• What is social enterprise, and might it
be captured by for-profit interests?

14. Source: Ipsos MORI
Don’t trust
them at all
Trust them
completely
1%
6%
3%3% 3%
5%
23%
10%
5%
19%
20%
2%
1%
4%
18%
11%
8%
22%22%
0 1 2 3 4 5 6 7 8 9 10
2005
2008
2005 Mean Score: 6.3 2008 Mean Score: 6.6
It’s all about retaining public trust
and confidence
• Charity must retain its distinctive brand if public trust
is to remain high

15. Sector behaviour the public want to see
• Transparent and accountable
• Independent, non-political
• Brave and innovative
• Collaborative, not competitive
• Providing VFM, and delivering public
benefit
• Building public trust and confidence