Charities evolve swiftly to survive post-pandemic
The nonprofit sector has adapted through hybrid fundraising events and digitising systems, but must now face talent shortages and inflation
Recovery from the pandemic is still at the forefront of the minds of most charity leadership teams, said Darrell Brislane, business development manager at M-Hance.
In 2020 many charities in Ireland experienced a simultaneous surge in demand for services and a collapse in income as a result of Covid-19. Unlike profit-making enterprises, most charities do not have funds tucked away to weather economic storms. Reserves are even looked down on by funders who want their money going directly to projects. The pandemic has created acute financial pressure for charities, with managing going-concern issues and insolvency risks have become a serious concern for many.
“Charities were particularly impacted by the pandemic, with incomes affected by temporary store closures and the cancellations of their usual, busy events and fundraising programmes,” said Brislane.
“As a result, over the past two and a half years a lot of charities were forced to make adjustments to their methods of operating. Many charities have turned, or are in the process of turning, to digital evolution for help, moving to cloud-based business systems to reduce costs, boost scalability and enhance security. Here at M-Hance we certainly saw customers pushing projects forward.”
With inflation above 7 per cent and set to increase in the year ahead, Ireland is experiencing a cost of living crisis. Inflation will raise the operating costs for charities, with staffing costs rising substantially to remain competitive, and with staff retention also a major concern for many in the sector. When one factors in spiralling energy prices and the increased cost of other goods and services that charities purchase to achieve their objectives, outgoings will need to increase more than previously forecast.
Brislane said the current hikes in inflation across the world could also start to impact charities, with supporters more likely to tighten their belts as their ability to give reduces. “In Ireland, the Economic and Social Research Institute expects inflation to reach 8.5 per cent in 2022 so this, coupled with a continued trend in the decline in donors, could prove to be challenging for charities.”
Ireland has a vibrant charity sector which impacts socially and economically in the complex weave of Irish society. “If we look at the statistics, there are almost 10,000 registered charities and a further 20,000 organisations in the Irish nonprofit sector,” said Brislane.
“Collectively, these organisations bring in over €14.5 billion annually and employ over 190,000 staff, 50,000 board members and over 500,000 volunteers, highlighting how important charities are in terms of their financial contribution to the economy and as employers.”
Central and local government are attracted to giving charities a greater role because of the sense of mission, independence and trust they bring. The challenge here is to preserve those qualities which mark charities out even as some are called upon to deliver more public services.
The benefits to society will be much more difficult to measure, with them bringing invaluable support and services to the people who need them across the country. “This is why having the ability to record and measure impact is absolutely vital and where a good supporter management system will help,” said Brislane.
Brislane said the pandemic had very much changed the way charities fundraised, with many turning to virtual events over the past two years.
“With organisations and consumers alike adjusting to business as usual, charities are reaping the benefits of holding both in-person and virtual events as hybrid options become all the rage.
“Organisations can overcome geographical limitations and still provide a dedicated physical space, all helping to increase the return on investment. Having the right technology in place can really help to facilitate the complexities of hosting hybrid events, ensuring they reach maximum impact.”
As life returns to normal, many charities are moving toward a hybrid model that combines the robust digital services users now expect, with selected in-person services.
“Cloud-based systems are indispensable components of helping organisations continue to protect the vulnerable,” said Brislane. “As well as providing charities with a flexible and resilient infrastructure, cloud-based systems are also great providers of virtual storage.
“Such flexibility is a valuable asset at this time with charities seeing a huge uptake in and demand for their services.”
Deirdre Garvey is chief executive of The Wheel, the national association of charities, community organisations and social enterprises. “The Covid-19 crisis has led to greater collaboration both within the sector and between the sector and state agencies,” she said.
“The relationship between our sector and the state is arguably better than at any point in the recent past, and there are welcome signs of greater partnership between statutory bodies and our sector. It is crucial that the sector and state bodies build on the new partnership approach we now have to deliver flexible and effective services where and when they are needed.”
Garvey said there was an acute need for investment in leadership in the non-profit sector.
“While it’s often on the agenda, it’s rarely the top priority. To meet anticipated future growth, we need to address the critical skills gap and provide pathways for future leaders. We need to appreciate that there is a strong net cost-benefit in investing in leadership skills – from role-modelling to staff and volunteer retention, to employee satisfaction.
“Leadership development is essential at all times to drive progressive, successful growth in the sector and respond to changing needs. However, in light of the transformative experiences of the past few years, we must support leaders, more than ever, and equip them to meet current and future demands.”
Garvey said many non-profit organisations were exploring new models of working, including blended or hybrid models.
“Recruiting and retaining suitably qualified staff and volunteers has always been a challenge for most non-profits, and it’s particularly acute at the moment. However, these new models of working could give organisations access to a much wider and more diverse talent pool.
“Social enterprise is at the heart of the wider social economy in Ireland. It is part of our heritage and, importantly, it is essential to a future economy that works for people and the planet. There are several important initiatives under way in this space that is becoming a crucially important paradigm for understanding the sector and its future.
“We need to move from the economic and social model that rewards the individual at the expense of society to one that puts the community at its heart and fosters our responsibility to each other and our communities. This change must be integrated into all aspects of the economy at every level, including our business models.”