UK Social Sector Health Check Report indicates that charities expect demand on services to rise while funding becomes increasingly challenging

Charity Bank’s inaugural UK Social Sector Health Check report, released this week, polled 182 social sector leaders to understand the challenges they face, and to assess the impact of the current climate on the sectors ability to respond to the needs of people and communities.

Charity Bank also invited guest contributors to share insights on the state of the sector, how political and Brexit uncertainty are impacting, as well as commenting on the latest on funding, regulation, technology and governance.

The results make for stark reading. The report found that 85% of charities expect demand for their services to grow over the next two years, 86% are concerned about future grant funding and 82% don’t think they’ll be able to sustain donations over that period.

The results also show that the last few years have proved challenging for the social sector. A decade of austerity has seen local authorities forced to slash their services, with charities and social enterprises having to plug the gap, often on significantly reduced budgets.

However, the social sector is resilient and well versed in responding to challenging situations. In the words of one respondent, “Challenging times often generate the most innovation”.

Looking ahead however at possible income streams, 62% of respondents see social investment as an opportunity to secure new funds.

Technology is highlighted as another area which could deliver income generation for the sector over the next few years, although 58% of those questioned saw technology limitations as a challenge for next year.

Charity Bank‘s report also shows Government policy continuing to pose a challenge for 63% of respondents, while the sector is split on what Brexit means for them. Almost half (49%) think it will present issues, while 46% are unclear and 13% think it could create opportunities.

Ed Siegel, Chief Executive, Charity Bank said:

The social sector is entering this new decade under a cloud of uncertainty, and with the majority of organisations worried that funding will be more difficult to come by, many are looking at alternative ways to generate income and this can increasingly involve repayable finance. Almost two-thirds (62%) of the organisations we spoke to see social investment as an opportunity for growth. With the recent launch of the Impact Investing Institute, we’re also hoping that social investment will increasingly be seen as a great opportunity for investors that care about the impact that their money can have.

He added:

Technology is advancing at a rapid rate and could benefit the sector hugely – beyond making it easier for people to donate. However, as our research shows, lots of the organisations we work with are struggling just to fund their basic operating costs, let alone grow the provision of their services. While investing in technology can feel like a massive up-front cost and is not without risk, it could ultimately improve the services that charities and social enterprises are able to offer, enriching communities and offering a strong return on technological investment for the social sector.

You can download a free copy of Charity Bank’s UK Social Sector Health Check report by registering on the Charity Bank website.