Wednesday 29 June 2016

Brexit And Charities

In the second of this week's post-Brexit pieces, we look at how UK charities are faced with an even more uncertain future.

The last couple of years have been, shall we say, complicated for the Third Sector. Deep drops in donations, a difficult relationship with government and a couple of high-profile scandals have left charities exposed and struggling. In Brexitland, things are unlikely to improve.

Financially, the Sector is likely to take a big hit. The steep fall in both UK markets and the value of the pound have a couple of harsh effects. Firstly, many charities that do work abroad buy a lot of foreign currency to be able to purchase supplies and pay support staff on the ground. That has suddenly become more expensive.

Meanwhile, grant funding from charitable foundations to worthy causes will also drop off. The tanking UK market means that the investment assets that these foundations rely on to do business are suddenly worth a lot less than they were this time last week. £5billion less, in fact. The political uncertainty in the country at the moment is not one in which the markets feel comfortable doing business. If things continue as they are, charities that depend on grants over the next financial year could find themselves looking at a lot of red lines in the account book.

And this is before we mention the uncomfortable question of funding from the EU itself. A potential £200million shortfall from EU programs is likely to vanish, with no enthusiasm from the UK government to replace it. When the minister in charge of the sector, Rob Wilson, calls grant funding for charities "unsustainable", you know you're in trouble.

That relationship between charities and government is uncertain to improve in this new environment. David Cameron's Big Society seems a long time ago now, and there's likely to be a hardening in attitude from a more right-wing administration (which seems a given, given the front-runner for new Prime Minister). Charities, as ever expected to do more with less and forced to pick up the shortfall from collapsing and underfunded public services, will find themselves caught between a rockier rock and a harder place.

The more difficult question to quantify (one which David Ainsworth teases out in this piece for Civil Society) is how charities face a public that suddenly seem to view refugees, the disabled and the underprivileged with suspicion or downright dislike. The Third Sector has always been one that works on an inclusive view of the world. We are all brothers and sisters, and we have a responsibility to help those who cannot help themselves. Does the UK still share those views? Right now, it's hard to see it. Perhaps the job of the Third Sector is about to shift, and its job will become one where it has to persuade the British public to step away from a blinkered, xenophobic view of the world outside its shrinking borders.


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