Daniel

Daniel Ferrell-Schweppenstedde

Policy and Public Affairs Manager

Charities Aid Foundation


 
Beth Clarke

Beth Clarke

Programme Manager, CAF Resilience

Charities Aid Foundation


Why charities and funders should invest in resilience

These days the idea of resilience is being mentioned more frequently - resilience of individuals to cope with pressure, resilience of systems to absorb shocks, and resilience of local communities to deal with external pressures. The Cabinet Office is even calling for evidence to inform a National Resilience Strategy.

Covid-19 was a real-time stress test for society including charities. Many organisations, particularly smaller ones, saw their finances come under pressure and according to the Charity Commission the share of charities with incomes of more than £500,000 which had negative or no free reserves rose from 9% in 2020 to 28% in 2021. In spite of this, charities and their funders, community and mutual aid groups stepped up and provided unprecedented levels of support. Civil society represented the backbone of the local crisis response. Having a strong and responsive local ecosystem of support and services made a difference for many people. From this perspective, charity resilience and community resilience go hand in hand.

But even before the pandemic charities faced a challenging operating and funding environment. Many experienced record levels of demand while dealing with underfunded contracts or restricted grants that provided little flexibility to change course or adjust their services. The pandemic exposed many charities to additional pressures and led to another increase in demand for services. Not only did the pandemic challenge resilience but it raised its importance and place it at the forefront of many charity leaders' minds.

CAF's charity resilience initiative

The CAF Resilience Programme launched in 2017 and has served as a pilot project exploring what resilience could mean, how resilience funding could be structured, and what impact it could have. The ten small charities who participated received a two-year grant of £100k which was primarily spent on salaries freeing up key staff to focus on building their charity's resilience.  The organisations also received advisory support to help them identify where their needs lay, a structured learning approach to reflect on changes needed, and advice around areas such as fundraising and the funder-charity relationship.  The majority of participating charities were still completing the scheme when the pandemic began in 2020 enabling the programme to acquire evidence of how the funding of resilience work reaped benefits when faced with extremely challenging working conditions. The charities involved have come through the pandemic and in several cases have managed to thrive reaching more people through digital service delivery, taking on more contracts and growing their operations.

Background

In 2020 Beth Clarke from CAF's Charity Advisory Team delivered a session on resilience work as part of Small Charities Week. During the seminar participants were polled on their ability to engage with the topic of resilience.  Responses were received from 226 people working at charities with average incomes of under £400k. The survey data provided some interesting insights into the charity-funder relationship and the ability to build up resilience. Only 19% of respondents reported that a funder had initiated a conversation about core costs in the past (pre-crisis).  Eighty percent felt that having funding allowed them to step away from their day-to-day work and focus on strategy and new ways of working and 75% said this would also increase their charity's impact.

Respondents were asked to pick three main issues that resonated most with their charity's experience and which could be explored with funders when engaging with them on resilience. Respondents said that multi-annual funding would allow them to plan and see things through (28%), that they needed funding that frees up time and thinking space (21%), and that they want to do better impact reporting but that it is hard without additional funding (15%). Core cost funding and freeing up time for doing strategic work is also essential to funding resilience.

This new insight into how resilience funding delivers on the ground comes at a time when during the crisis many funders have supported pledges that promise more flexibility, core funding and trust-based relationships with grantees. For example, over 350 funders signed the pledge coordinated by London Funders, while on the European level the Donors and Foundations in Europe (Dafne) and the European Foundation Centre (EFC) issued a similar pledge which had 186 signatories. The hope is that the promises made in these pledges carry over into a post-crisis world but they could also provide a foundation for funding new approaches that incorporate resilience building. Now is an opportune moment for charities to work with their partners on resilience and preparedness for the next unexpected high impact event.

The role of government

Government also acts as a funder and provided emergency Covid-19 funding. But it had to be dispersed quickly to help charities tackling the crisis and was not geared towards funding longer-term internal change. Going forward government will remain a significant player in the funding landscape for charities. There have been longstanding calls for public funders on the national and local level to find a more long-term and sustainable funding relationship with the sector. Resilience funding could be an element to bolster local service delivery ecosystems and communities using the power of the public purse.

Charities need to be able to plan for the unexpected

There are also steps charities can take on their own. Many were in crisis mode before Covid-19 hit and are now severely cash, resource and time strapped. There is always the urge to move resources into reaching more beneficiaries when there is evident and pressing need. But there is also a clear realisation that charities need to be prepared when the next crisis comes around, protecting their organisations from going under and maintaining the ability to continue serving their communities. Investing in resilience can not only enable better crisis preparedness but also help set charities on a general path that allows them to expand their operations, increase impact and improve service delivery. If funders also show their support for resilience work then they send a strong message to charities that they can ask for this type of funding and begin to invest in themselves more.

Learnings from the CAF Programme: Creating resilience, how funders can help strengthen small charities can be downloaded here.