By Sonakshi Anand, Senior Researcher at the Institute for Voluntary Action Research

Since early April, the Institute for Voluntary Action Research (IVAR) has hosted peer support sessions for over 280 voluntary, community and social enterprise (VCSE) and cross-sector leaders across the UK. We are publishing regular briefings about the challenges leaders are facing; the support that they need; and questions for policymakers and funders.

Five things remain front of mind for leaders of VCSE organisations

1. Pressure of uncertainty for the long-term

Everyone is feeling the pressure of uncertainty: what will the environment look like ‘afterwards’ with an expected economic recession creeping in? Will our finances hold out until we get back up?  What will be needed for our service users, and will there be funding for the type of work we do? Leaders are finding it hard to plan in such uncertain times, especially with the ambiguity around the following:

Longer-term funding

We have heard leaders voice their anxiety about the impact of the economy on the availability of future funds; changes in funders’ long-term priorities impacting their eligibility; writing funding applications when the future is so unclear; and the outcome of outstanding funding decisions that are under threat of being revoked or postponed. The burden of applying for emergency funding and having to ‘come up with new ideas’ has been noted.

There are pressing concerns about the weakness of the longer-term funding pipeline on which so many depend. Leaders are experiencing challenges right across their fundraising portfolios, citing, for example: inconsistent approaches to covering organisational overheads; the pressure of identifying and applying for short-term funding alongside managing services; and gaining traction in the digital fundraising market for small organisations.

“In the sector, there are already limitations in the funding pools available … we are just stuck in the unknown in the medium and long term.” 

Strategic planning for their organisations

As leaders contemplate the future of the larger sector, they are speculating about the long-term economic and social damages COVID-19 will create for their organisations, services and beneficiaries. While they see a key role for the VCSE sector in recovery and rebuilding, they are aware that with fewer resources, many organisations will have to re-imagine what they do and how they operate. Most believe that the size and shape of their organisations and services will need to change, possibly dramatically, making it necessary to re-plan their organisational strategies.

VCSE leaders have to judge how much energy to put into planning in the midst of a very insecure future, while at the same time trying to provide the clarity and vision so often expected from a leader.

“Thinking longer term – we can cope right now, but our problem is how do we strategise as an organisation about what to do next when we don’t know what the world will look like?’”

2. Increasing inequalities, vulnerabilities and a technology divide among service users

“The vulnerability of the people that we work with is challenging and distressing.”

There is a significant concern that hard-to-reach vulnerable people are missing out on services due to the ‘digital divide’. Looking ahead, many leaders are mindful that COVID-19 has exposed deep inequalities and there will be a greater demand on their services:

“COVID-19 has not affected people equally.”

For some, there is an urgent need for the VCSE sector to “become far more robust in confronting the structural issues that generate deep-seated disadvantage.” Challenging and shaping policy at the same time as responding to the crisis can ensure that measures are in place to support and protect the most vulnerable populations, both in the immediate and long-term. However, it’s difficult to know how to initiate and pursue policy discussions and lobbying for change in the midst of a crisis.

3. Declining unrestricted income and reserves

The loss of vitally important sources of unrestricted income (e.g. membership fees, public fundraising, charity shop trading, venue hire and rental income) continues to weigh heavily on the minds of VCSE leaders. Many organisations are using financial reserves to sustain their work. There is a risk that as we emerge from lockdown, with the need for services and support remaining acute, the sector is drained of funds and less able to respond to the demand.

4. Managing staff and keeping up staff morale

When describing the welfare and morale of their staff, some leaders have recently begun to use words such as burnout, fear, and fatigue. They describe the cumulative drain of a range of challenges including:

• adjusting to new working practices
• dealing with highly emotional situations
• juggling work and home life, and
• living with prolonged uncertainty and constant change.

While leaders are finding different ways to respond, this is taking its toll, particularly on leaders when they are left carrying the uncertainty on their own, or when they feel people are looking to them for answers which they are unable to provide.

5. Partnership and cross-sector working

For some leaders, their recent experience of being a smaller player in a collaboration with both statutory services and larger charities has been characterised by cancelled contracts and clawing back of project funds with little or no notice: ‘

“The quid pro quo system isn’t happening. When these big dominoes fall, us smaller guys are the ones that get trampled on.“

However, despite this, the majority see collaborative working as an essential ingredient for survival and effectiveness in the future.

“A natural reaction is to focus internally, but we know from experience that partnership working is a lifeline and will keep us all afloat.“

Four things policymakers can do to support VCSE leaders

1. Keep funding open

Leaders urge all funders and policymakers – whether independent, corporate or public – to sustain funding and maintain flexibility as they consider both their medium and long-term grant-making strategies. With depleted reserves, the financial implications of COVID-19 could stretch well beyond the next 12 months. Organisations of all types are desperate that “funders should keep the funding coming.” There is an ask for funders to think carefully about the type of funding they are making available to the sector, and to whom.

While many appreciate the availability of emergency funding, as well as the willingness to adopt a flexible approach when it comes to existing funding arrangements and relationships, there is still a strong call for funders to demonstrate strategic foresight and to recognise the long-term needs of the sector. In particular, this includes acknowledging that organisations need to have access to core and long-term funding, as well as opportunities to approach new funders.

2. Introduce more trusting processes

There is also a call for funders to consider more agile, trust-based funding, which leaves space for “exploration of need” as well as “an element of experimentation, by both individual organisations and new consortia.” Ensuring that organisations are able to apply for funding for a longer time period is also a priority. No matter how welcome emergency funding has been, the burden of fundraising has grown exponentially with so many short-term funds. And there is a pressing need for support that will be used post-lockdown.

You may be interested in the Human Learning Systems approach; our recent report Trust, Power and Collaboration includes some practical advice on how to implement this.

3. Make things more certain for charities with clear and consistent communication

VCSE leaders understand that policymakers and funders have tough decisions to make about programmes and priorities. But it helps them if you are clear about what you have already decided, the questions that will take more time and sharing your thinking with the VCSE leaders. As one leader put it – “If you don’t know yet, say so” – as this helps to reduce some ambiguities for the leaders. There is scope for the government to help the sector by making further policy shifts with better communication for the sector to navigate through the policy changes. Policymakers and funders must ensure they have good knowledge about, and respect for, the sector’s contribution, and remain focused on real need.

“It is silence that is most unnerving as deadlines approach and finances dwindle.”

4. Involve charities in cross-sector conversations

VCSE leaders continue to express frustration about the lack of – or the nature of – conversation and dialogue with the public sector. Some feel side-lined and ignored; others feel dictated to; many describe a culture of planning and decision-making that means the potential contribution of the VCSE is underused or wasted. Where there is an appetite in the public sector for open dialogue with VCSEs, this is often hampered by underdeveloped structures for meaningful communication, representing sufficient diversity of voices: “We need better dialogue with local authorities. They think that because they talk to one CVS that they’re hearing from everyone.” 

Elsewhere, we have heard about barriers to cross-sector working coming down. The message coming from our sessions is that cross-sector dialogue is vital. First, to ensure that there is good understanding of each other’s responses, so that services can be better planned and coordinated. Second, for the true impact of COVID-19, and the inequalities it has exposed, to be addressed by future public policy.

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