I’m sure you’d agree that the UK seems a very bleak place to be at the moment. A revolving door on Number 10 and government ministers dizzy from numerous U-turns, the pound plummeting and people unsure whether they’re in for a tax rise or tax cut (including Liz Truss); we’ve certainly seen better days.
One of the many fallouts from the country’s precarious political position is that we’re experiencing one of the worst cost-of-living crises we’ve seen in generations. Poverty is spreading, and even the middle classes are feeling the pinch. Budgets for frontline services, which were already tight or non-existent, have been cut further, and charities have been forced to fill in gaps they shouldn’t have had to fill. I recently wrote about what could happen if the situation got worse, which makes for grim reading.
In the early days of the pandemic, without the knowledge and the medical solutions we have now about and against Covid, decisions were taken that could have proved crucial or rash. In fairness to the government, they didn’t have much time nor proven data models to hand that could have helped. Looking back now, with hindsight and the luxury of time, and at the tail end of the pandemic, it’s much easier to have an opinion on the initial action that was taken to minimise the spread of Covid cases.
During those first few months, when no one really knew how the pandemic was going to pan out, the third sector was incredibly responsive. Given that most charities were experiencing unprecedented demand for support and that many faced going under completely, as it was difficult to fundraise for core costs in lockdowns, emergency funds were created. With minimal criteria other than simply keeping charities afloat, they helped to keep many third sector organisations going.
Around eighteen months ago, when lockdowns were no longer necessary and Covid vaccines were helping to stop the virus spreading, grant-makers were able to swap this emergency funding for more targeted financial support, subject to specific criteria, which could once again underpin the causes and work they were aligned with and passionate about. It seemed like everything was getting back to normal.
Then the cost-of-living crisis hit. Families where both parents were in full-time work couldn’t make ends meet. Demand for food banks increased by a whopping 81%. Small businesses, ineligible for any support against rising energy costs, were forced to raise their prices way out of their customers’ budgets or face going bust. The result: more and more people requiring help.
Charities, still vulnerable from the pandemic, are struggling to cope with the demand for their services.
This is exactly the scenario I spoke about.
However, whereas I speculated that the whole world would implode if charities didn’t exist to pick up the slack, I’m happy to be proved (relatively) wrong. Funders have stepped up. Funders seem to understand that the third sector has effectively jumped out of one crisis straight into another.
Data shows that more than 10% of funders in London have recognised the peril the third sector is in, and that they have increased their grant-making capacity or maximum funding limits as a result. Some funders have changed their approach to offer simplified emergency cash grants, rather than money heavily limited by criteria. Some grant-makers with endowment funds have talked about drawing down the capital after realising that the interest wasn’t providing as much support as they’d have liked—however, in the current climate, this comes with its risks. Other funders have uplifted their awards to include core/staffing costs, after realising how close to the wire some of their partners are at the moment.
However, these changes have not been easy, and it’s obvious what the future outlook will be if things continue. As one funder put it, ‘We cannot go on like this. There needs to be a swing back to stabilisation rather than survival.’ It’s common sense that, if we just lurch from one crisis to another, the country will never get far enough forward to overcome its fiscal issues.
In every sector, stability is needed. The stability of our financial markets. Stability within our government. Stability in the country’s long-term plans. Without these things, we can’t offer stability to the people in need of support.