How Charities Can Combat the Impact of Recessions
It won’t have escaped your attention that everyone in the UK is feeling the squeeze right now. Energy prices have soared, the cost of filling your car with fuel has skyrocketed and the weekly grocery shop has gone through the roof.
UK inflation hit a 40-year high in July and is expected to rise an extra 13% in October.
To combat this, the Bank of England has raised interest rates to a level not seen in 27 years and warned that the UK faces a recession that will last until the end of 2023.
However, it's not all doom and gloom.
The charity sector was hit hard in the recession of 2008, and it bounced back. This time will be no different.
How did the 2008 recession impact the third sector?
Back in 2008, a global financial crisis brought about what has become known as ‘The Great Recession.’As a result, charitable donations in the UK dropped by 11% and charities large and small experienced a reduction in income at the same time as a rise in demand for the services they provide.
Government funding dried up and organisations that had come to rely on this income stream had to find alternative sources – fast.
To be fair, many of the charities that relied on statutory funding had known for years that they needed to establish a ‘Plan B’ but hadn’t done so.
If there’s one positive to take away from the situation, it’s that the recession made them take action, by accelerating changes that were going to be made anyway.
It was hard. But they survived.
So, what can you do to ride out the recession and minimise the impact of future recessions?
Maintain Communication
Communication is key – in good times and bad.
Maintaining visibility is as important, if not more so, during times of hardship. Donations may decline, but people will still give to the causes they care about, albeit in smaller amounts.
What's more, the dip won’t last forever
.You want your voice to remain heard, so you don’t lose out when things pick back up.
Diversify Your Revenue Streams
From large-scale donors and private investment to public events, government grants and legacy giving, there’s more than one way to add to those coffers.
Give yourself options. Don’t focus your attention on one- or two-income channels.
Form Partnerships
Get together with like-minded charities with similar missions and fundraise together.
After all, half of the pie is better than none of it. And many hands make light work, as the saying goes.
Remember though, that trust is vital for partnerships to be successful. Don’t jump in with both feet before researching potential partner organisations first. Choose the wrong one and it will be more detrimental than beneficial to your cause.
Final Word
These are just a few actionable ideas for charities to combat the impact of recessions and come out the other side shining.
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