A brief look at Brexit and charity fundraising

The National Council for Voluntary Organisations (NCVO) Road Ahead for 2021 report highlights the significant effect Brexit is set to have on charity revenue and the ability to raise funds. It cites latest predictions from the National Audit Office that there “will be significant disruption to UK and EU trade”.

The report suggests that supporters will have less money to donate, corporate partners will have less money to give, and there will also be disruption to public sector and major governmental grants available to the sector.

“This means charities and the people they support should plan for an uncertain and challenging economic environment for the foreseeable future,” warns the NCVO’s Road Ahead 2021 report. “The legacy of the crisis will impact on the public finances for some years to come,”

The threat of economic instability amid Brexit comes at the worst possible time – as UK charities tackle unemployment, as well as increased demand for support and reductions in fundraising caused by the COVID-19 pandemic.

Charities are also experiencing a period of digital acceleration, which includes the need to invest in remote working tools amid a trend for flexible working.

Furthermore, low Bank of England interest rates make it cheaper for charities to borrow money, but their pension schemes, savings, and investments are taking a hit. Meanwhile, the spectre of rising taxes means people will have even less to spare for charity donations.

Rising unemployment also adds to demand, with the UK’s most vulnerable communities already hit hardest by recession. According to the Resolution Foundation, Black, Asian and Minority Ethnic (BAME) communities are among the most impacted, with 22% of BAME staff losing their jobs last year.

UK Shared Prosperity Fund

The government has looked to replace major EU structural funds, including the European Social Fund, that were being used by charities in local areas to support communities.

Between 2014 and 2020 EU structural funding was worth more than £4.35bn to the UK.

This lost revenue stream is to be replaced with the UK Shared Prosperity Fund (USPF), that is due to launch in 2021. This will initially start with ploughing £220m into local areas via pilot initiatives, eventually at least matching EU funding, with the aim of totalling £1.5bn a year.

But the NCVO warns that any focus on supporting marginalised communities and the role charities will play in the pilots is “yet to be determined”.

The NCVO urges charities to ensure they fully assess how Brexit will impact on their work and the lives of beneficiaries over the coming years.

It adds: “If your charity has received EU funding in the past, have you thought about how your organisation is positioned to participate on the UK Shared Prosperity Fund.”