Childrens Hospices And The Recession 100129
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Transcript of Childrens Hospices And The Recession 100129
National Council for Voluntary Organisations
The Third Sector: recession and beyondChildren’s Hospices UK | Chair and CEO Forum | January 2010
Karl WildingNCVO Research and Foresightwww.ncvo-vol.org.uk/research www.3s4.org.uk
Issues for discussion
• How did we get here? The Nice Decade
• How badly has the recession impacted upon the sector?
• And what financial challenges lie ahead, post-recession?
How did we get here?
The Nice Decade
The Sector’s income sources
Statutory sources & Lottery: 36%
The public (giving and purchases): 37%
Other VCOs: 11%
Private Sector: 4%
Interest & Dividends: 12%
Earned income: the route to resilience?Types of income - £billions
How badly has the recession impacted upon the sector?
Recession timeline (GDP growth)
-6
-5
-4
-3
-2
-1
0
1
2
3
4
Sept 06
Dec 06
Mar 07
Jun 07
Sept 07
Dec 07
Mar 08
Jun 08
Sept 08
Dec 08
Mar 09
Jun 09
Sep 09
Pe
r c
en
t c
ha
ng
e, y
ea
r-o
n-y
ea
r
Quarter
June: Angela Smith appointed
Aug: Credit crunch begins
Recession
2nd recession summit
1st recession summit
Feb: Real Help for Communities announced
Oct: Kevin Brennan
appointed
July: Phil Hope
appointed
June: Brown new PM
Dec: Interest
rates 2%
Nov: VAT cut to 15%
Dec: End of recession
Oct: Icelandic banks fail
April: Spending period 2008-11
begins
Quarter 2: Unemployment
starts to rise
Sept: Northern Rock fails
Dec09
1 in 4 report significant concerns: local surveys report greater problems
What has been the overall impact of the economic downturn?Charity Commission recession survey, August 2009
(D/Ks excluded)24
34
30
39
28
16
22
38
38
21
6
7
11
6
7
-54
-36
-20
-16
-43
-70 -50 -30 -10 10 30 50 70 90
>£10k
£10-£100k
£100k-£1m
£1m+
All
Not significant Significant Very significant Not at all
Sept 0826%
Jan 0925%
Aug 0928%
Is there a change?% reporting a significant/ very significant impact
Many charities are reporting no change in most income streams
Has income changed over the last 12 months?Charity Commission recession survey, August 2009
(D/Ks excluded)
11
18
16
13
17
19
6
70
66
60
56
50
46
23
13
12
22
26
22
31
69
0 10 20 30 40 50 60 70
Public sector
Mem'ship fees
Legacies
Fundraising
Trading
Grantmakers
InvestmentsDecreased
Same
Increased
Investments hit widest: but
only 8% of sector
income.
Majority report no change in
income
Charitable giving dipped by 11% in 2008/09
£29
£33£31
£10 £11 £10
£0
£5
£10
£15
£20
£25
£30
£35
2006/7 2007/8 2008/9
£/mon
th
Mean Median
Total £10.3bn
Total £11.2bn Total
£9.9bn
Philanthropy dipped in 2007/08:
£ million+ donations fell in value from
£1.6bn to £1.4bn (13%)
Individual giving in the USA fell 6.3%
in 2008
Source: CAF/NCVO
Looking ahead
VCOs are still low on confidence: but fewer expecting the situation to worsen
Sector leaders’ net confidence has been negative for 5 quarters, but is improvingConfidence in future prospects: net balance, 2008-09
-2
-5
-7
-9
-9
23
40
45
-20 -10 0 10 20 30 40 50
2009 Q4
2009 Q3
2009 Q2
2009 Q1
2008 Q4
2008 Q3
2008 Q2
2008 Q1
31%Worsen
40%No change
29%Improve
2009 Q4
Rec
essi
on
Source: NCVO
Many are expecting no change in income in the short term…
5
20
11
7
8
9
17
67
67
63
58
57
55
54
18
8
17
25
30
29
14
0 10 20 30 40 50 60 70
Public sector
Grantmakers
Fundraising
Trading
Mem'ship fees
Investments
Legacies
Decrease Same Increase
Will income change over the next 12 months?
Charity Commission recession survey, August 2009
(D/Ks excluded)
National Council for Voluntary OrganisationsThere is some evidence of increased collaboration, but few mergers
…though perceptions of the medium term are more pessimistic.
It’s the State, Stupid…
Resources clearly matter
• Service delivery under contract has driven greater dependency on statutory income…
• …whilst local government has continued to be the most important statutory funder of the VCS.
The growth of statutory funding The importance of local government funding (£bn)
Some organisations rely heavily upon statutory income…but most don’t.
Relative dependence upon statutory income: VCOs categorised according to how much of their income is from statutory sources, 2006/07
There is significant variation in the local relationship
Proportion of VCOs in each local authority that receive statutory income, 2006/07 (%) (quintiles)
Do the statutory bodies in your local area influence your success?
How did local govt respond in 1991-93?
Yes33%
No61%
DK6%
• Funding decisions (amounts; timing; distribution) of local councils likely to have a big impact on the VCS
38
20
18
16
13
5
0 10 20 30 40
Cut funding
Look on charity as an extension of social services
Moved us lower down list of priorities
Became more sympathetic
Moved us higher up list of priorities
Increased rent/charges for facilities
Has your relationship with local government changed during the recession?Source: CAF
If Yes, how has your relationship with local government changed during the recession?Source: CAF
Cuts in govt funding will not hit the VCS uniformly
Funding source is variable between sectorsFunding source, by sector, 2008
The 40,000 organisations that receive government funding are concentrated in subsectors such as employment, advocacy, umbrellas, education and social services.
Most subsectors are poorly capitalised – those with assets appear exceptional Reconfiguration appears most likely in mid-sized organisations.
…whilst assets are not a secure basis for manyNet assets, expressed as number of months’ expenditure
Is the sector facing a perfect storm?
• Falling charitable giving from individuals and corporates
• Likely cuts in discretionary funding
• Low reserve/asset levels
• Increased demand for services
• More intense competition from other charities
• More intense competition from other corporates
• Adaptability a defining characteristic: times are always tough
• Giving will recover
• Volunteer input already increasing
• Many not dependent on govt income
• Some reconfiguration/ collaboration will generate efficiencies
• The sector is in better shape than in the last recession
Yes No
Critical uncertainties?
Demographic impact & service provision
• Is increasing demand for services best met through VCOs providing core services or ‘nice but not necessary’ top-ups?o Is the VCS a substitute or a complement?
• Is the role of the local VCS more likely to be around voice, rather than choice?o If so, how will this be resourced in the Perfect Storm scenario?
• Will large, national charities or corporates provide the bulk of services to local communities?
Critical uncertainties?
The relative roles of individuals, the state and civil society
• Will the state do less, or do things differently, or both?
• Is the VCS a substitute or a complement for the roles that local authorities currently provide?
• If more risk and responsibility for welfare rests with the individual, how will VCS-local government partnerships support this?
There is enough time to plan…
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