Coutts and charitable giving in the Covid era
During the pandemic, UK charities have struggled to balance a massive shortfall in funding with an unprecedented increase in demand. How severe was the impact on the sector and how can we best support it? Victoria Papworth, Philanthropy Specialist at the Coutts Institute, shares her insights.
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It’s not an exaggeration to say that Covid has had a huge impact on every element of our lives but, for the charity sector in the UK, it’s been like a wrecking ball. Not only did the sector suffer an estimated £10 billion shortfall in income (1), but also a huge increase in demand for services. As normality returns and government support tapers, the sector remains under huge strain, with two-thirds of charities reporting increased demand between April and June in 2021 (2).
On a more positive note, at Coutts, we saw a huge increase in charitable donations by clients, up from £24 million in 2019 to £45 million in 2020. We’ve also seen a huge uptick in the number of trusts and foundations established during the pandemic which is truly heart-warming.
The impact and effects of Covid on the charity sector will last for years, pressuring every area of every organisation. However, such disparities highlight where prudent philanthropy can step up and make a real difference.
An unequal burden
Some sectors were hit harder than others. The pandemic had an indelible impact on our health service and the charity sector that supports it. Disruption to cancer screening, diagnosis and treatment led to 45,000 fewer people starting cancer treatment between the start of the pandemic and March 2021 (3). This hiatus hugely increased the burden on the charities that help people manage the effects of both cancer and its treatment, support families through that treatment, and help them deal with bereavement.
Large organisations, such as Macmillan Cancer Support, are able to weather some of these issues and mitigate drop offs in funding. But smaller, local charities working in their communities to support the elderly population, or with people who are shielding in their homes, are the kind of organisations that have been hit hardest during Covid. So it's encouraging to see bodies such as the National Emergencies Trust be able to offer small scale support and funding to those who needed it most.
A shift to digital delivery helped some charities
Of course, lots of charities did pivot to online support. But for some, it just wasn’t appropriate – the level of support they offer requires face-to-face interaction and not every element of life can be easily translated online. What’s more, many families and households don’t have access to devices or data. This spurred some of the most interesting philanthropy during Covid. One example that springs to mind is the East End Community foundation, which is running an extensive programme to get devices and digital access into people’s homes by funding a one-year data subscription for the poorest families.
“As we all begin to understand what the ‘new normal’ means, we believe philanthropy will move from a reactive approach to charitable giving to a more strategic one.”
The value of continued support
A common conversation with clients has been around the efficiency of addressing need. Rather than trying to develop new relationships at a time when charities are struggling with loss of income and hugely increased demand, clients felt encouraged to offer their existing projects less restricted funding where possible, acknowledging the existential realities they were dealing with.
A more strategic approach to giving
During Covid, we’ve seen that our philanthropy clients want a longer-term relationship with the organisations that they support, seeking a more strategic approach that offers flexible funding. This shared understanding between patrons and projects acknowledges the reality of the mission and that every step of a charitable process has to be accounted for – from the finance director and the communications team to the photocopier and the rent. And what we've seen as a result is tremendous generosity, through both large-scale philanthropy and individuals from every walk of life going to great efforts to make funding available.
How we can help
By working with our clients over a period of years to cover the variety of their wealth needs, we are able to better understand what they want to achieve with their philanthropy, and ensure we support them on that journey.
As we all begin to understand what the ‘new normal’ means, we believe philanthropy will move from a reactive approach to charitable giving, to a more strategic one. The Coutts team is here to help our clients support the charities they are passionate about by thinking long-term, enabling these organisations to transition into post-Covid set ups, leaving them better placed to deal with the ongoing challenges of a society recovering from a pandemic.
We have a strong understanding of the charity sector and a deep network within it. We know what works, what the key issues are and the challenges that charities have been facing, and I think clients find that very helpful.
1. Pro Bono Economics, COVID Charity Tracker, November 2020
2. Pro Bono Economics, COVID Charity Tracker, September 2021
3. Cancer Research UK, May 2021