Charities say securing funding is the most serious challenge they have faced since the start of the pandemic

05 May 2021 Press Releases Events

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Charities say securing funding is the most serious challenge they have faced since the start of the pandemic

The Charities Regulator has today published new research findings on the views that charities have in relation to the impact of Covid-19, their views on revenue generation, public trust and confidence and the Charity Sector. A total of 1,240 people responded to the survey carried out by Amárach Research on behalf of the Regulator.

Commenting on the findings, Helen Martin, Chief Executive of the Charities Regulator said, “It’s clear from the findings that a constant challenge for the sector, regardless of an organisation’s size or complexity, is funding and income. The survey findings confirm that the pandemic has had an impact on traditional sources of income for many charities as well services and volunteering.

“As we emerge from this pandemic many charities will be challenged by the new context in which they find themselves.  From the survey findings we can see that this is likely to be the case in particular for  smaller charities which have few if any employees and are mainly reliant on donations from the public.  We know from our recent survey of the public, that levels of public trust and confidence in charities are closely linked to levels of transparency and accountability of charities regarding their finances.  The fact that two thirds of respondents to the survey of charities believe that increased regulation and the introduction of the Charities Governance Code is improving trust and confidence in the sector underlines the sector’s commitment to good governance. From the Charities Regulator’s perspective, we will continue to support charities to enable them to operate in a way that increases levels of public trust and confidence through the provision of practical guidance focussed on enhancing standards of governance and increasing transparency and accountability across the sector.”

All registered charities were invited to participate in the survey and of those who responded:

  • 52% were charity trustees;
  • 34% were employees of the charity;
  • 9% were volunteers (who were not trustees) and
  • 2% were advisors to the charity (for example an accountant or solicitor).

 

Charity Revenue

Charity revenue comes from multiple sources. Respondents were asked to identify their top five sources of funding in normal times and central Government was mentioned by 40% of respondents. This is separate to central and local government paying charities for the provision of services which was mentioned by a quarter of respondents (24%). Fundraising events were mentioned by one third of respondents (32%). Fees for the provision of services was also mentioned by 24%. Other sources of income were unsolicited bequests (23%); traditional cash collections (23%); fundraising campaigns (23%); donations from members, staff and volunteers (20%); and philanthropic or corporate bodies (19%).

Respondents were asked about their source and scale of funding prior to the pandemic. Over four out of five respondents (83%), said that their main sources of funding had not changed in the two years prior to the pandemic, significantly ahead of the 15% of respondents who said that it had.  One in five (21%) said that their funding had decreased in the two years prior to the pandemic, compared to slightly over a third (37%) who said it had increased and 42% who said that it had stayed the same. For those whose funding had changed, the major changes were as a result of changes in State funding or a decrease in donor funding.

Covid-19 impact

Respondents were also asked to identify the most serious challenges that they faced since the start of the pandemic and income and securing funding remains the key challenge - identified by over half  (56%) of all organisations as a serious challenge and selected by one third (32%) as the most serious challenge. This is consistent across charities of all different sizes and structure. 

Other challenges identified by respondents include complying with social distancing and other Covid measures (47%) and a reduction in the services that can be offered or being unable to offer any services (46%).  Forty four percent also highlighted the impact on fundraising activities and a third (33%) mentioned fewer donations or a reduced value of donations.       

Charities are responding to these challenges with 37% reporting that they were looking for new sources of funding, 35% mentioned providing services in a different way and 28% said they were increasing their presence on social media.  Interestingly just 13% of respondents indicated that they planned or were planning to cut costs.

 

Public Trust and Confidence

Maintaining public trust and confidence remains a critical issue for the charity sector and just under half (44%) of charities surveyed believe that public trust and confidence in charities has increased in the past 12 months. This is just marginally ahead of the 43% who believe that it has not changed and substantially ahead of the 12% who believe that public trust and confidence has decreased.

The twelve percent of respondents who believed that public trust and confidence has declined over the past 12 months were asked why they thought this had happened. Just over a quarter (27%) of respondents identified media coverage of serious issues in large high profile charities impacting across the sector; 26% similarly thought that ongoing public dialogue about perceived issues in the sector impacted and just over a fifth (21%) identified negative media coverage about charities generally.

The survey findings show that public trust and confidence differs when it comes to larger and smaller charities with over half (56%) of those charities with income of more than €500,000 believing that confidence had increased and just 7% in this category believing that it had decreased. In contrast, for charities with incomes of less than €50,000, just a third (32%) believed that public trust and confidence had increased, while 15% believed that it has decreased. 

Those who believe that public trust and confidence has increased over the past 12 months were separately asked whether the role that the charity sector has played during the COVID-19 pandemic had contributed to this improvement in public trust in the sector.  Over nine in ten (90%) of this subsample of respondents believed that it had, with just 1% disagreeing. 

 

The Charities Regulator

89% of charities surveyed said they trust the Charities Regulator to treat charities fairly and proportionally, 90% agreed that the Regulator acts in the public interest and 89% agreed that they trust the regulator to make effective decisions when granting or refusing charitable status or applications for registration.  Furthermore, two thirds of respondents (66%) also believe that increased regulation and the introduction of the Charities Governance Code is improving trust and confidence in the sector – and only 6% disagree.

Scope, scale and reach of the sector

The Survey Findings align with what we know from the Register of Charities and the Charities Regulator’s interactions with registered charities in relation to the diversity of charities in Ireland today and provides further insight into the scope, scale and reach of the sector.  The key points that emerge from the analysis include the following:

  • Most charities are small.  While 58% have paid employees, of these 40% employ fewer than five people. Forty two percent have no employees at all and must rely totally on volunteers to achieve their charitable purpose.
  • The vast majority of charities generate low levels of income. Over a third (37%) have annual income of €50,000 or less, a similar number (37%) have annual income of between €50,000 and €500,000, while just 21% have income of more than €500,000 per annum.
  • The consequence of the size of the organisations in revenue and resource terms is that the majority are focussed regionally.  Just under a quarter of the organisations surveyed provide services to the whole of Ireland and a further 10% provide services overseas.
  • There appears to be a continuous appetite to establish new charitable organisations.  Just under one in five (17%) of the organisations surveyed were established within the last five years and 6% were established in the past two years. 
  • This constant renewal of the charity ‘stock’ underlines the need for continuous education of charity trustees and those working in the sector.  While there may be some overlap of experience among trustees, each organisation will have its own goals, focus, charitable purpose and associated activities. The need for  informed and knowledgeable charity trustees who are familiar with applicable regulatory requirements and are committed to maintaining high standards of governance will be critical to the sector in the future.

 

You can read the full charities survey here.