state of the sector 2011

State of the Sector 2011

March 2012

Tel: 020 7426 8888

Email: [email protected]

Web: www.nfpsynergy.net

2 2

Background

• Research completed in partnership with Third Sector magazine

• Third phase of the research

• Over 600 respondents from a variety of organisations

• Fieldwork - November 2011

2

3 3

Profile of respondents

• Mixture of levels of role; CEO, trustees, senior manager, department or team manager, project worker

• A quarter described their main area of expertise as fundraising, the remainder a mix of other areas e.g. operations, brand, management

• 5% of respondents said their organisation had no employees, and over a third had between 1 and 25 employees

• In terms of turnover over a third of organisations had a turnover of less that £1 million

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4 4

The impact of the recession and economic turmoil

4

Q1: “The recession and economic downturn have had an impact on the third sector in a range of ways. Please indicate how the income, services and staff of your organisation have been affected in the last two years.” Ranked by increased a bit/increased a lot

Base=695 State of the Sector Survey, 2011, nfpSynergy

-15%

-11%

-23%

-23%

-26%

-16%

-18%

-19%

-9%

-13%

-44%

-44%

-20%

-3%

-2%

-4%

3%

6%

32%

23%

24%

18% 4%

6%

3%

7%

13%

1%

-6%

-22%

-80% -60% -40% -20% 0% 20% 40% 60% 80%

Income from local

government

Income from central

government

Income from donations

Number of people employed

Overall income

Level of services provided

Not sure/Don't know Not relevant to us Decreased a lot Decreased a bit About the same Increased a bit Increased a lot

5 5

The impact of the recession and economic turmoil

5

Q2. How has your organisation responded to the pressures of the last two years?

Base= 692. State of the Sector Survey, 2011, nfpSynergy

25%

48%

58%

70%

92%

6% 4% 5% 7%4%

37%

48%

69%

23%

4%

Are you looking at

partnerships with

other

organisations

more than

before?

Has the recession

prompted you to

alter your

structure or

downsize?

Have you had to

deliver different

services or

change your

mission?

Has it prompted

your organisation

to consider

merger?

Has it prompted

your organisation

to merge?

Yes No Don't know/not sure

6 6

The impact of government initiatives and funding

6

Q3: Eighteen months after the election, we are interested in your views on the coalition government and its impact on the sector and your charity. Please indicate how much you agree or disagree with each of the statements below. Ranked by Agree/Strongly agree


-26%

-28%

-26%

-23%

-24%

-25%

-18%

-3%

9%

9%

42%

28%

8%

3%

3%

2%

-80% -60% -40% -20% 0% 20% 40% 60% 80%

The coalition government will

be better for your charity than

another Labour government

would have been.

The coalition government will

be better for the sector than

another Labour government

would have been.

The Big Society agenda offers

new opportunities for the

sector.

The public sector cuts

affecting the sector would

have been made by a Labour

government as well.

Don't know Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree

7 7

Government initiatives – perceived impact (part 1)

7

Q4: ‘Please tell us which government initiatives relating specifically to the third sector you think either have had, or will have, the biggest impact on your charity.’ Ranked by slight impact/significant impact for the better

Base = 580 State of the Sector Survey, 2011, nfpSynergy

18%

18%

18%

10%

27%

21%

10%12%

14%

26%

26%

29%

29%

25%

2%

6%

39%

32%

51%

31%

42%

42%

38%

8%

12%

20%

35%

7%

8%

7% 1%

1%

2%

3%

1%

3%

10%

Social Impact Bonds

Social Action Fund

Transforming Local Infrastructure

The Transition Fund

The Giving White Paper

Inheritance tax concessions for making 10 per cent legacies

Gift Aid claims of up to £5000 without declarations

Don't know Too early to tell Significant impact for the worse

Slight impact for the worse No impact Slight impact for the better

Significant impact for the better

8 8

Government initiatives – perceived impact (part 2)

8

Q4: ‘Please tell us which government initiatives relating specifically to the third sector you think either have had, or will have, the biggest impact on your charity.’ Ranked by slight impact/significant impact for the better

Base = 580 State of the Sector Survey, 2011, nfpSynergy

10%

13%

13%

16%

18%

11%

18%

19% 2% 7%

31%

35%

29%

27%

38%

32%

23%

26%

2%

4%

43%

43%

42%

44%

41%

47%

47%

51%

6%

6%

7%

8%

6%

3%

2%

1%

1%

1%

1%

0%

0%

1%

Mutuals Taskforce

Compact revision

National Citizen Service

Community organisers

Big Society Deregulation

Taskforce

Community First

The Innovation in Giving

Fund

Big Society Capital

Don't know Too early to tell Significant impact for the worse

Slight impact for the worse No impact Slight impact for the better

Significant impact for the better

9 9

What government initiative or policy change would you like to see that would make a positive difference to your organisation?

• Very varied responses

• Many made reference to specific government initiatives or policies that they wished to change (based on the purpose of their organisation)

o Local government and their relations with small charities (particularly around contracting)

o VAT

o Gift Aid

o Bureaucracy and red tape

o Tax incentives/relief

o NHS reforms

9

10 10

The changing regulatory landscape and the independence of the sector

10

Q7: These questions are about the sector’s regulators, their remit and their performance. Please indicate how much you agree or disagree with each of the statements. Ranked by agree/strongly agree


-57%

-41%

-44%

-23%

-32%

-19%

12%

16%

48%

39%

36%

26%

21% 1%

1%

2%

9%

2%

2%-48%-16%

-80% -60% -40% -20% 0% 20% 40% 60% 80%

The cut of a quarter in the Charity Commission’s budget will

not weaken its regulatory functions

The Public Fundraising Regulatory Association (PFRA) fulfils

its self-regulatory role in a proportionate, helpful and

appropriate way

The Charity Commission has responded effectively and

strategically to its cut in funding

The Fundraising Standards Board (FRSB) fulfils its self-

regulatory role in a proportionate, helpful and appropriate

way

HM Revenue and Customs administers Gift Aid in a

proportionate, helpful and appropriate way

It makes sense that STREET fundraising is regulated by the

FRSB and the PFRA

The Charity Commission fulfils its regulatory role in a

proportionate, helpful and appropriate way


11 11

The changing regulatory landscape and the independence of the sector

11

Q8: Alongside regulation comes the independence of the sector and individual charities. So please indicate how much you agree or disagree with each of the statements below. Ranked by agree/strongly agree


22%

27%

-39%

-42%

-28%

-10%

-8%

-7%

-4%

13%

22%

46%

36%

41%

41%

41%

1%

7%

12%

14%

1%

-23%

-22%

-18%

-9%

-80% -60% -40% -20% 0% 20% 40% 60% 80%

The sector’s independence is healthier than it was two years

ago

The sector’s independence is in excellent health

The independence of charities is compromised if they deliver

public services

Payment by results is a threat to the independence of

charities

The independence of charities is compromised by the shift

from grants to contracts

My charity has independence in terms of funding

My charity has the independence and freedom to speak out

freely on the issues that concern it


12 12

The big issues for your organisation (part 1)

12

Q9: There is a range of big issues facing the sector. Please indicate how much you agree or disagree with each of the statements below. Ranked by agree/strongly agree


29%

-13%

-21%

-21%

-17%

-3%

-2%

-1%

33%

39%

57%

57%

47%

46%

44%

11%

8%

13%

12%

12%

13%-9%

-18%

-1%

-2%

-80% -60% -40% -20% 0% 20% 40% 60% 80% 100%

Sector infrastructure bodies

need a radical rethink

I think charities are usually able

to deliver better public services

than government

The governance of charities is

fraught with difficulties

I think the sector is too cautious

about campaigning

There is too much competition

between charities, especially

the large ones

What it means to be a charity is

increasingly blurred

The public doesn't understand

how modern charities work


13 13

The big issues for your organisation (part 2)

13

Q9: There is a range of big issues facing the sector. Please indicate how much you agree or disagree with each of the statements below. Ranked by agree/strongly agree


38%

8%

8%

-12%

-20%

-29%

-33%

-32%

-17%

-22%

-6%

-5%

-10%

-6%

21%

23%

37%

34%

33%

27%

23%

5%

4%

6%

8%

12%

5%

-7%-2%

-80% -60% -40% -20% 0% 20% 40% 60% 80% 100%

I think the abolition of the sector

infrastructure body Capacity

builders was a mistake

Existing infrastructure bodies

serving the sector fulfill their

purpose well

I think very big charities have a

negative effect on the sector as a

whole

The big cuts to the government’s

Strategic Partners programme were

a mistake

Every charity should be able to

make its own decision about

whether it wants to pay its trustees

I think the need for impact

measurement by charities is being

over-emphasised

I think government is exerting too

much control over the sector

I am in favour of more delivery of

public services by charities


14 14

Biggest challenges for charities – ‘top 3’ responses

14

Q10. What are the three biggest challenges facing your organisation? Please tick up to three of the options below

Base- 537 State of the Sector Survey, 2011, nfpSynergy

15%

18%

20%

28%

47%

51%

69%

8%

13%

10%

11%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Other

Finding and keeping volunteers

Attracting high quality staff

Sorting out our back office functions (eg

IT, finance, etc)

Dealing with red tape and bureaucracy

Keeping high quality staff

Securing funding from government

Creating an effective board

Communicating the importance of our

work

Growing our voluntary income

Creating a sustainable funding base

15 15

Magic wand - fundraising

• Grants

o Centralised applications

o Appropriate reporting levels

o Feedback on failed applications

o Shorter applications

• Change in attitudes to giving

o General public

o Within organisations – trustees, staff

• Staff

o Not enough of them!

o Not skilled or experienced

15

16 16

Magic wand – other issues (not fundraising)

• Trustees

o “A limitless supply of capable, prudent and dedicated trustees – preferably a high percentage also being qualified accountants”

• IT/systems

• Leadership

o “getting (a) CEO who actually understands how to run a business and make strategic decisions”

• Administrative burden on small charities

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17 17

Issues in the sector – Key attributes (first 8) Most important attributes required to be a successful charity – in 2011, 2009, and in 2007

17

Q13. Please choose up to five of the following attributes which you believe are most important in creating a successful charity with a high impact on its beneficiaries.

Base=532 (in 2011). State of the Sector Survey, 2011, nfpSynergy

33%

34%

38%

43%

55%

58%

67%

32%

32%

37%

39%

44%

55%

55%

65%

32%

35%

31%

46%

54%

56%

70%

Quality of management

Capacity to innovate

Quality of trustees and

governance

Input from clients and

beneficiaries*

Financial soundness

Strength of values and

vision

Quality of leadership

Quality of work and/or

services

2011

2009

2007

* New category for 2011 ‘Involvement of beneficiaries’ in 2009 (1%)

18 18

Issues in the sector – Key attributes (next 8) Most important attributes required to be a successful charity – in 2011, 2009, and in 2007

18

Q13. Please choose up to five of the following attributes which you believe are most important in creating a successful charity with a high impact on its beneficiaries.

Base=532 (in 2011). State of the Sector Survey, 2011, nfpSynergy

12%

12%

10%

23%

30%

15%

30%

26%

6%

7%

9%

10%

18%

19%

22%

29%

9%

11%

8%

19%

28%

18%

40%

28%

Strong commitment to diversity

Internal communications

Modern IT strategy/attitude to digital media

Campaigning and media/PR skills

Ability to attract, develop and retain top talent

Management of brand, image and reputation

Ability to work in partnership

Quality of fundraising and/or marketing

2011

2009

2007

* New category for 2011. ‘Involvement of beneficiaries’ in 2009 (1%)

19 19

Issues in the sector – Key attributes (first 8) Skills most required/desired by respondents in their charity – in 2011, 2009, and in 2007

19

Q14 . Which five of these skills or expertise are you finding in short supply, or would ideally like to have more of, in your charity?

Base=511 (in 2011). *Answer option not included in 2007 State of the Sector questionnaire. State of the Sector Survey, 2011, nfpSynergy

23%

26%

34%

34%

32%

31%

30%

42%

27%

31%

31%

31%

32%

33%

35%

43%

Information Technology

Evaluation skills*

Governance/Trustees

Strategic planning*

Marketing

External

Communications or PR

Web/Digital Media

Fundraising

201120092007

20 20

Issues in the sector – Key attributes (next 8) Skills most required/desired by respondents in their charity – in 2011, 2009, and in 2007

20

Q14 . Which five of these skills or expertise are you finding in short supply, or would ideally like to have more of, in your charity?

Base=511 (in 2011). *Answer option not included in 2007 State of the Sector questionnaire. State of the Sector Survey, 2011, nfpSynergy

10%

19%

19%

21%

22%

22%

24%

24%

12%

15%

17%

19%

20%

20%

23%

26%

Service delivery

Management

Financial management

Human Resources

Campaigning

Internal

Communications

Leadership

Legal expertise*

201120092007

21 21

Biggest concerns in the next few years

• Sustainable funding and survival

o “sustainability and ability to meet increasing demands with diminishing resources”

o “operating may cease if funding is not obtain[ed] in the next few months!”

o “moving away from an over-dependence on statutory funding”

o “whether we can survive in a format/structure that stays true to our vision or whether the environment will force unacceptable changes”

• Staff and Volunteers

• Governance

o “my charity desperately needs someone at the top with a vision for what direction the charity should be going and a strategy for how to achieve that. Our trustees are hopeless…”

21

22 22

What are the biggest challenges facing your organisation?

22

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