Managing in a Downturn Survey results 2014

11th April 2014


Charities are cautiously optimistic about the future despite continuing challenges on funding and are taking steps to enhance transparency in response to greater press scrutiny.  

new report released today by PwC, Charity Finance Group (CFG) and the Institute of Fundraising (IoF) finds that optimism for the future amongst charities is increasing as signs of economic recovery continue to strengthen.   7 out of 10 respondents to the survey, now in its seventh year, were optimistic about the next 12 months as charities look for ways to make the most of the recovery.

More than 450 charity fundraisers and finance professionals responded to the poll which has tracked how charities have coped since the economic crash in 2008. For this year, the report has an extra dimension as it lifts the lid on how charities have fared in the face of media scrutiny over the year and what steps they have taken to respond to the demands of transparency.

9 out of 10 respondents felt that the charity sector had been subject to more scrutiny and media interest this year, with 1 in 5 reporting that this had impacted negatively on their fundraising.

As a result, almost half of charities (49%) said that they had taken steps to enhance levels of transparency and disclosure of financial information during the last year.   The two most popular areas for which charities said that they would be enhancing transparency in the coming year were ‘costs of administration/ governance’ (45%), and ‘cost of fundraising’ (43%).

These new challenges have piled the pressure on the sector as those difficulties highlighted in recent years remain have not gone away.     Two thirds of respondents reported that the demand for their services had increased over the last year, with the same proportion expecting further increases in the year ahead.   As a result, 27 % claimed they were aiming to deliver more with the same resource as last year and 16% thought they would have to make cuts in other services to meet the additional demand. 

Other key findings include

• Charities continue to draw down their reserves to keep services running. Almost a third of charities have definite plans to utilise their reserves in the upcoming year and a further 23% were considering it as an option.  The majority planning to use their reserves were doing so either to maintain services (48%) or to cover operating costs (41%).
• The results on fundraising provide the basis for some cautious optimism.   Whilst the majority of respondents still report that fundraising was tougher this year and think it will get tougher next year, the numbers for both have dropped compared to previous years.   A year ago 89% expected the year ahead to be tougher.  But one year on, just 77% report that this has in fact turned out to be true.    In this year’s survey 68% think the next 12 months will be tougher for fundraisers.  
• As the economy picks up, the challenges that fundraisers face are shifting .  The challenge of ‘Donors having less disposable income’, and ‘Donors’ uncertainty about economic security’ have dropped almost 9% and 12% respectively.   In response 80% of respondents said they plan to explore new fundraising options in the next 12 months, and the proportion of charities that plan to increase training for their fundraisers almost doubled.
• The sector found itself increasingly in the public eye in 2013/14: the Cup Trust scandal; reports on chief executive salaries; and questions over the right of charities to campaign were addressed by the Lobbying Bill.   As a key part of the operating environment, this year’s survey asked respondents for the first time about their experiences and actions in relation to public scrutiny and media activity.


Peter Lewis, Institute of Fundraising Chief Executive, said:
“While there are undoubted challenges facing our sector, it is encouraging that the findings of this survey start to show a more positive and optimistic outlook for the year ahead, as demonstrated by fewer people than last year saying that things will be tougher for the year ahead. Donor acquisition rates are also improving, as is workforce morale with respondents saying their teams were more likely to be energised or optimistic than not.
“I’m also pleased to see a commitment to invest in training, with the numbers of those planning to train fundraisers in the coming 12 months almost double from last year.
“Many will find the next year difficult, but this survey shows that charities and fundraisers continue to be well placed to build on their good work.”

Ian Oakley-Smith, Head of Charities Sector at PwC said:
"Based upon the results of this survey, it is clear that there is a sense of improved optimism. However, real challenges remain, particularly for those charities that rely heavily on public sector income. It's encouraging to see continued evidence of charities improving their efforts to become more effective, either by more targeted fundraising or increased efforts to collaborate with others and being more strategic in their outlook."

Caron Bradshaw, CFG Chief Executive, said:
“The results show some cautious optimism emerging across the sector with charities beginning to feel more positive about the future. It’s important to remember how long the challenging economic climate has extended. The Chancellor was clear in his budget that there will be no let-up in public spending cuts. Charities continue to take bold and proactive steps to cope with ever-increasing demand for their services – for some this continuing situation is critical and threatens their survival.
“The sector has not had an easy year in the media either so I am pleased that the survey shows charities taking active steps to enhance transparency. 
“The survey shows that many in the sector still face risks to their stability and sustainability.  With the general election just over a year away, we will continue to press the government and opposition parties to recognise the long-term issues that need to be addressed if the sector is to continue to play its vital role in society.”


Notes to Editors:
1. Managing in a Downturn
The Managing in a Downturn series has surveyed senior fundraising and finance professionals in the charity sector since 2008 to chart the impact of the recession. This survey will be the seventh in the series.

The survey findings can be found here.

2. Charity Finance Group’s (CFG) vision is to inspire the development of a charity sector that is financially confident, dynamic and trustworthy. CFG works with finance managers to enable them to give the essential leadership on finance strategy and management that their charities need; promoting best practice in charity finance, driving up standards, campaigning for a better operating environment and ensuring every pound given to charity works harder. CFG has more than 2,200 members, and collectively our members are responsible for the management of over £19bn in charitable funds. 
3. The Institute of Fundraising (IoF) is the professional membership body for UK fundraising, representing  5,500 individual members and over 400 organisational members.  Our mission is to support fundraisers, through leadership, representation, standards-setting and education, and we champion and promote fundraising as a career choice.
4. PwC
PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 184,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at
© 2014 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details.

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