The coronavirus pandemic and its consequences are turning people’s lives upside down. Although the long-term economic, political, and social consequences of the crisis are still difficult to assess, it is already clear that vulnerable groups are significantly affected. The pandemic thus also poses unprecedented challenges for organisations dedicated to supporting these communities and wider society.
The two-fold challenge that the social progress sector is facing is also tangible in the UK: While the work of charities and foundations is more important than ever to mitigate the impact of the crisis, many organisations are facing a significant drop in funding.
New challenges, but also new opportunities to achieve social progress
To address the severe impact of the pandemic on the UK’s healthcare system, economy and society, the UK government launched a range of financial support schemes. Around 8.9 million Britons – more than a quarter of the workforce – have been sent on temporary leave under the UK’s furlough scheme. Similar to the “Kurzarbeitergeld” in Germany, the scheme aims to avoid people being laid off as the government continues to pay part of the employees’ salaries. Despite these measures, pessimism about economic recovery is growing. At the end of May, only 15% of Britons were optimistic about an economic recovery, while in late March still 23% expressed confidence that the economy would rebound. Trust in the UK government has also taken a hit since the onset of the crisis. In late March, 72% of the British people still thought that the government was handling the coronavirus pandemic “very” or “somewhat” well. By the beginning of June, this number had dropped to 39%.
The charity sector is no exception when it comes to the devastating impact of the pandemic. It is estimated to lose £4bn projected income in the first three months of the crisis alone, with fundraising and trading income hit the hardest. Charities are reporting a projected loss of 48% to their voluntary income. The crisis thereby exposes the vulnerabilities of the sector’s funding model. Already prior to the pandemic, it faced growing pressure: Over the last years, the number of people donating money to charities declined. At the same time, confidence in the sector fell and charities faced growing competition from start-ups and social enterprises. In 2018, an independent inquiry by the Civil Society Futures initiative argued that charities risk becoming irrelevant unless they drastically change their current approaches and reconnect with the communities they serve.
Despite the vital role of UK charities in responding to the pandemic, the government’s support for the sector came late. The focus of the British government was initially on providing comprehensive aid for businesses and the people. The £750 million support package ultimately announced in April focuses on helping frontline charities working in the health and social care system. Nevertheless, many organisations continue to face significant financial constraints, threatening their survival.
Yet, the challenges presented by the pandemic have also accelerated innovation across the sector. The response by individual and institutional philanthropy has been fast and engaging, spurring new ways of working and driving impact. Rapid-response funds were set up swiftly and foundations reduced the reporting requirements for grantees to reduce the burden on these organisations. Many companies also stepped up and provided support, often entering new forms of partnerships and cross-sector coalitions. Their support highlights the growing relevance of purpose in businesses and corporate messages around their role in supporting wider society – a development that is likely here to stay.
At the local level, volunteer groups and neighbourhood networks quickly grew and were able to provide tailored support within their communities. The newly launched “Furlonteer” initiative alone, which brings together employees on furlough with charities looking for volunteers, received more than 1,000 registrations within its first 48 hours. The pandemic moreover provided a boost to community-based fundraising initiatives that were able to generate significant funds. The record-breaking fundraising success of Captain Tom Moore constitutes an impressive example of this. The World War II veteran was able to raise around £32 million for the National Health Service NHS. In his appeal for donations marking the occasion of his 100th birthday, he committed to walking 100 lengths of his garden to encourage donations.
Finding answers for impact
Organisations, that want to contribute to a better society for everyone, are facing unprecedented challenges amid the pandemic, and there are no easy answers to address these.
While the UK was strongly involved in developing international solutions during the global financial crisis in 2008, the initial response to the pandemic was characterised by a lack of international cooperation. The global scale of the current crisis however urgently calls for global solutions.
From conversations with our partners and clients in the United Kingdom and Germany, it is clear how important partnerships and cooperation are in the current crisis. Already prior to the pandemic, we saw many opportunities for mutual learning between organisations in the two countries on issues, such as fundraising, organisational development, partnerships, and stakeholder engagement. In some areas, there were lessons from the UK, for instance on how UK academics think about social impact. In other areas, there were lessons to learn from Germany, for instance with regard to the operating models of foundations.
While many of the challenges that social progress organisations currently face may differ in detail, they are often concerned with the same underlying questions: How are needs of communities changing, and how can those most affected be best supported amid the volatile environment? How has COVID-19 changed one’s own objectives, capacities and approaches and what adaptations are needed to seize new opportunities for impact? The crisis thereby also presents an opportunity to join forces and learn from one another to find answers for impact – across sectors and across borders.