Funding threat for Irish charities

Russell Brennan Keane have announced the findings from a survey of the charity sector in Ireland. The survey was conducted by Millward Brown Lansdowne late last year. Key personnel in charities with primary responsibility for financial matters and strategic decisions were asked about the challenges facing the sector.

“Our survey found that funding is the most significant challenge facing charities in the current environment and the difficulties experienced by charities will impact their abilities to deliver services,” said Conor Woods, charity and not-for-profit sector partner at Russell Brennan Keane.

“When it comes to fundraising, the tried and tested routes are no longer creating sustainable sources of income, and the more successful charities at fundraising are the ones that are embracing new strategies and being more innovative. Certainly the emergence of social media, online campaigns, and closer ties with corporate Ireland are paying dividends for many clients.”

The survey found that around four in five of the charities who receive Government funding are expecting a decrease in funding over the next two years; 64 per cent expect a decrease of up to 10 per cent and the remainder expect larger decreases.

Charities expect the reduction in Government funding to impact them in a number of ways - approximately 45 per cent expect it will lead to a reduction in services and a further 32 per cent expect to reduce payroll.

During the coming 12 months, organisations expect to monitor and potentially cut their organisational costs, review personnel structure and resources, and to diversify their fundraising activities.

However, almost four in 10 charities were unaware of ICTR’s Guiding Principles for Fundraising, which offer guidance about how fundraising should be organised to give donors clarity on what they may expect from a charity.

Over six in 10 charities felt the Government expects higher levels of legislation on charities that are not expected from other bodies and organisations.

“In my experience those charities who have adopted the Guiding Principles on Fundraising tend to be more successful in fundraising on the international stage and will suffer to a lesser degree as funding becomes tighter,” Conor said.

The survey also found that collaboration between charities is likely to become more common. Almost seven in 10 charities feel that consolidation in the sector is inevitable and 76 per cent expect that consolidation will be perceived as beneficial in the public’s eyes.

Conor noted that there are some interesting mergers and consolidations imminent. Attractions include savings on overheads, administration, and central costs, as well as long-term sustainability.

“Many charities are dealing with human resources issues; however many problems in this area are caused by charities not adopting proper procedures and following best practice when it comes to dealing with people,” he said.

“The change facing the charity and not-for-profit sector represents opportunity. It is timely for charities to review their position and identify options for the future.”

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