Ninety one per cent of charities negatively affected by pandemic, and internal disputes on the increase

Given the long running and unpredictable nature of COVID-19, as well as its wide-ranging effects, recent research published by the Charity Commission suggesting only ninety one per cent of charities surveyed had experienced some negative impact as a result of the pandemic seems almost remarkable, and leaves one wondering about the experiences of the other nine per cent!

However, for the vast majority of charities surveyed, a negative impact was felt, and the most commonly felt negative impacts were in the areas of a charity’s services and delivery (85 per cent), financial position (72 per cent) and staffing and governance (66 per cent).

The report also confirmed that:

• most charities surveyed had lost income from charitable activities,
• many had lost income from fundraising activities and trading, and
• a third had lost access to volunteers during the pandemic.

Cyber harms less harmful for the sector than anticipated?

Interestingly, very few charities that responded to the survey reported encountering, or suffering a significant impact as a result of, cyber harms.

Towards the start of the pandemic, as charities shifted towards digital working, there were frequent warnings of an increase in the risk of cyber harms to charities from entities such as the Fraud Advisory Panel, as well as the Charity Commission.

The results of this survey suggest that those warnings may have been sufficiently heeded, with a good outcome for the sector thus far. Digital security and defence against cyber harms will doubtless have to continue to be a focus for all charities for the foreseeable future, however.

Optimism for the future

The report also highlighted the flexibility and adaptability of the sector – in particular in its use of technology – in trying to counter the impact of the pandemic, and pointed towards some optimism for the future amongst those charities that responded to the survey.

Although the effects of the closure of the furlough scheme were yet to be felt at the time at which the survey was carried out, 91 per cent of charities surveyed said that they did not expect to make any staff redundant in the next 12 months.

And, while a majority of respondents anticipated some threat to their charity’s financial viability over the next twelve months, only a slightly smaller proportion thought that their charity would be in the same or a slightly stronger position than in January 2020 over the next twelve months.

Increasing risks of internal dispute?

A blog from the Commission accompanying the publication of the research warned charities of another issue not covered by the survey, but of which charity trustees should be aware – that, based on their casework, “disputes in charities seem to be increasing in volume and, in some cases, in ferocity”.

The Commission therefore highlighted the need for those in leadership positions to be able not only to make sometimes difficult decisions in the best interests of their charity, but also to behave and to communicate those decisions in a way that promotes co-operation in the best interests of their charity.

Charities looking to guard against such issues by seeking to improve the performance of their leadership teams in terms of behaviour and communication, may find useful starting points in the sections of the Charity Governance Code on the principles of “Integrity” and “Openness and Accountability”, which provide suggestions as to best practice.