It is too early to say what the decision to leave the European Union will mean in the long term for any sector, but some change has already begun to manifest itself in economic, social and political terms.
The markets are volatile – we’ve already seen the pound hit a 31 year low and forecasters have said a recession is likely. Socially, there has been an increase in tensions and divisions within and between communities, as well as different and competing ideas about what the final Brexit settlement will look like.
Politically, things are in flux too – we have a new prime minister and cabinet, with a restructure of government departments, and a leadership contest within the official opposition. While Rob Wilson MP remains the minister responsible for the charity sector, the Office for Civil Society and Innovation (OCSI) has moved to the Department for Culture, Media and Sport (DCMS) from the Cabinet Office.
The arguments and discussions as to whether things are moving for the better or worse will continue, but what is already pretty clear is that Brexit is likely to have an impact on almost every aspect of how a charity operates. From how much charities can raise or need to raise to deliver services where demand is already rising, to the availability of grant or statutory funding, to the value of charitable assets and investments and the costs of delivering their services (especially for international development and aid charities). Most importantly, the culmination of these factors has the potential to profoundly affect the causes and beneficiaries that charities work for.
The need for charities to fundraise may be greater than ever if existing funding opportunities from current sources are no longer available – charities in the UK receive an estimated £200m from EU funds every year, and while this represents only 0.5% of the sector’s income it will certainly leave a hole. Equally, any significant change in house prices could diminish the amount of money received through legacies, while decisions by businesses to make efficiency savings or relocate may lead to a drop in corporate charitable donations. There have also been concerns voiced from international organisations that the cost of providing services to their beneficiaries overseas is bound to increase as the exchange rate fluctuates, while the funding they receive through the international aid budget may also be at risk.
But right now, this is all conjecture. Until we know more and things develop the immediate challenge is dealing with the uncertainty that an impending Brexit brings. There inevitably will be debates to be had and questions to be answered along the way – the IoF will be working to get the answers to those questions and put forward the views and priorities of fundraisers so that the sector can best respond to challenging times.
Charities have to plan for the future and have strategies in place to ensure their sustainability and future delivery of their work – an ongoing period of uncertainty makes future planning hard and will create long discussions by charity trustee boards. And even if the economic impact in the long term is limited, there is a real risk that this uncertainty alone could have a tangible impact on the amount of money that can be raised, or the impact an organisation can have as they are forced to hypothesise about situations that may never happen, but that they might have to plan for just in case.
What we do know from the last recession is that through times of uncertainty our sector is resilient. Charities are flexible – they can adapt, collaborate, and innovate. Most encouragingly, we know that donation levels from individuals and the support that people give to charities they care about is steady even through difficult times.
So, while the impact of Brexit can’t be avoided, it may be mitigated if charities embrace the right approach to dealing with challenging times. That means adopting the same sense of determination, pragmatism and flexibility that they bring every day to their invaluable work for good causes, both in the UK and abroad.
Content on this page is paid for and provided by the Institute of Fundraising, sponsor of the Guardian Voluntary Sector Network’s fundraising hub.
