Charity finance in Jane Tully Charity Finance Group

Transcription

1 Charity finance in 2014 Jane Tully Charity Finance Group

2 Where we were in 2010

3 .and where it is today. Nonetheless, despite being a much derided term, we are told that the Big Society remains a guiding principle for Cameron.

4 What the Coalition will be remembered for so far. THE GOOD* IHT, VAT on shared THE BAD services, GASDS Open data Social investment & BSC Social Value Act National Citizen Service Looking at the charity pension issue - Big Society Open public services Endless reviews of charity regulation The giving summit Gradual erosion of tax reliefs Charities online THE UGLY - - Budget 2012 ( Give it Back George ) Sock puppets report Welfare debates Reduced consultation period, dismantling of the Compact Lobbying bill *(often in theory and yet to be convinced)

5 The external environment

6 Forces and trends shaping policy agenda for charities 1) It s still all about the economy, stupid! As economy continues to underperform, growth and deficit reduction dominate all policy discourse Rising cost remain an issue and new remit for the BoE on monetary policy may result in low interest rates and continued higher inflation Austerity expected to remain until 2018 Tax increases, higher borrowing or welfare cuts possible post election - Charities must demonstrate relevance to growth agenda - Inflation high and bank deposit returns will remain low

7 Changes Forces and since trends elections shaping policy agenda for charities 2) Implementing reforms to public services - Public sector cuts continue into 2016/17 harsher cuts to come post next election. - Open public services agenda: larger contacts, PbR, subcontracting, working w primes & supply chains. - Challenges to implement and perform on localism, social value - Shift in power to LEPs, clinical commissioning groups, police commissioners, prime contractors, academies Continued uncertainly over funding for many - esp for local CVS Winners and losers in the competition for contracts depending on issue, scale and contract readiness. Charities dealing with implementation of new structures/systems

8 Reductions in public funding

9 Changes Forces and since trends elections shaping policy agenda for charities 3) A growing anti-welfare agenda Hardening of public attitudes on taxation and welfare skivers Cuts to housing bens etc introduced AME (protected spending on benefits and tax credits) has risen significantly during this parliament Govt keen to reduce - Charities dealing with more beneficiaries, where state provision is withdrawn Attitudes towards taxation and spending (%) (Source: British Social Attitudes Survey 29, 2012)

10 Changes Forces and since trends elections shaping policy agenda for charities 4) Coalition politics becomes the norm Coalition politics will remain Manifestos may matter more - key negotiating tool. High level commitments expected but limits on the detail. Red lines. Likely targets: strivers and squeezed middle Disenfranchised voters and lower political engagement Personalities not parties: fuelled by TV debates, soc media, 24hr Rise of the right, and smaller parties and single issue will get more airtime. Local, EU and Scottish tests - Time to influence is now. Opportunities to provide policy solutions

11 Forces and trends shaping the policy election agenda 2015 for charities debate 5) Digitalisation, data & online relationships Internet continues to grow despite growing tensions over regulation Mobile and tablet use overtaking PCs Growth of.gov.uk to engage Growing reliance on cloud solutions Digital divide continues More monetisation Open data driving trend toward transparency, but growing issues with privacy and security - Growing emphasis on digital marketing and need for data skills - Investment in websites and apps - New ways to give

12 Forces and trends shaping policy agenda for charities 6) Public & media demanding accountability Media and public more sceptical and challenging 24hr news Armchair reporters and auditors Lower tolerance for perceived waste eg salaries Disillusionment w politics & business. Trust in charity remains high but shaky. - Charities must protect brand & improve transparency Most important qualities for trust and confidence in charities (Ipsos Mori 2012)

13 Forces and trends shaping policy agenda for charities 6) Public & media demanding accountability Media and public more sceptical and challenging 24hr news Armchair reporters and auditors Lower tolerance for perceived waste eg salaries Disillusionment w politics & business. Trust in charity remains high but shaky. - Charities must protect brand & improve transparency Most important qualities for trust and confidence in charities (Ipsos Mori 2012)

14 Forces and trends shaping the policy election agenda 2015 for charities debate 7) Societal changes Aging population placing increased demand on public services Changing household structures, more people renting Better educated workforce/population Decline in traditional religions Political disengagement More ethnic diversity and increased number of foreign born UK residents Govt nudging behavioural change: showing not telling 8) Changes in business practices New business models Growing focus on CSR, driven by consumer demand and desire to sanitise business/banking brand Decline of the high street

15 How charities are faring How are charities faring at present? - Perfect storm increased demand for services, rising costs and falling income

16 The key policy and practice issues in charity finance 1. #SORPmania - SoRP framework: New SoRP introduced in summer 2014 for accounting periods starting on or after Jan Looking to the future, possibility of an international accounting standard for charities

17 The key policy and issues practice in charity issues finance charity finance 2. Pensions auto-enrolment and pension liabilities 180,000 charities in E&W alone Approx 25,000 w. paid staff

18 The key policy issues in charity finance The key policy and practice issues in charity finance 3. Responding to reductions in public funding and managing risk in new public service models

19 The key policy issues in charity finance The key policy and practice issues in charity finance 4. Public demanding more transparency on costs

20 The key policy and practice issues in charity finance 5. The role of the Charity Commission Role and remit up for discussion again Likely to see significant changes to it s structure and role, given the Cup Trust debacle and recent PAC report Note: charities will be asked as of 2014/15 whether they have an investment policy. If you need help compiling one, please see the CFG/CIG Writing your Charity s Investment Policy publication

21 The key policy and practice issues in charity finance 6. Prevent erosion of charity tax reliefs, incl. business rates - Successful scheme worth over 1bn to charities in Focus on simplification as only 1/3 charities avail of it - Business rate relief worth over 1.6bn to charities in 2012/13

22 The key policy issues in charity finance 7. Restructures and mergers or collaboration

23 The key policy and practice issues in charity finance 8. Growth in trading and social enterprise

24 The key policy and practice issues in charity finance 9. Innovating in fundraising

25 The key policy and practice issues in charity finance 10. Social investment

26 Challenges facing small charities with financial management - Small doesn t necessarily mean simple - Inability to afford staff with strong financial expertise - Lack of financial capability among trustees - Difficulties locating appropriate information and support - Difference between charity and other sector financial management procedures

27 Outlook for the future

28 Contact: Jane Tully