Several recent studies have shown that Voluntary and Community Organisations (VCOs) have been negatively affected by the economic downturn. VCOs are facing a reduction in their income while demands on their services increase. As a result NYFVO and the Funding Advice Network have collated some useful resources and information to help your organisation become more resilient to the impact of the current recession.

Charity Commission Research
Research carried out for the Charity Commission has found that 59% of charities in England and Wales report having been affected by the downturn, up from 38% in September 2008 and 56% in September 2009. Of those affected, 62% have experienced a drop in income.

The Charity Commission's fourth Economic Survey of Charities surveyed 1,010 charities in England and Wales. Larger charities, with incomes of £100,000 or more, have been hit hardest, with 79% feeling the impact of the downturn and a third seeing an increase in demand for services.

However, 84% of all charities said they were optimistic about the outlook for the next year, an increase on the 69% expressing optimism six months ago. This positive attitude was tempered: 47% of charities expect the recovery of the charity sector to lag behind that of the rest of the economy.

Investment income continues to be the most affected source of income for the charities surveyed, with 62% of charities with investments having seen a decrease in the past six months.

The Commission commented on the proportion of charities that rely primarily on public sector funding. The research shows that 24% of charities with an income of £100,000 or more consider public sector funding to be their most important source of income. The anticipated cuts in public sector spending may affect many of these when many public service delivery contracts between charities and public sector bodies end in March 2011.
http://www.charitycommission.gov.uk/Charity_requirements_guidance/Charity_governance/Managing_resources/economic.aspx

ACF survey of Trusts and Foundations
A survey of UK-based trusts and foundations carried out by the Association of Charitable Foundations has found that they are weathering the recession better than many other sectors, with nearly 75% predicting steady or rising income levels over the longer term and two-thirds planning to maintain or increase their level of grant-making. http://bit.ly/Buavx or http://www.acf.org.uk

Modernisation Fund
The Government’s £16.5 million ‘Real Help for Communities’ Modernisation Fund will help third sector organisations be more resilient to the impact of the economic downturn. It is focused on helping organisations providing services to those worst hit by the recession.

The funding will help in two main ways:
 

1) Bursaries of £1k for organisations to pay for initial advice on how they can become more resilient and work more closely with others to increase their impact, and grants of up to £10k to help pay costs involved in moving towards collaboration or merger.
http://www.modernisationfund.org.uk/grants/index.html

2) Interest-free loans of between £30K and £500K for third sector organisations with existing plans for mergers and collaboration or other activities to help them prepare for difficult times. http://www.modernisationfund.org.uk/loans/index.html

How resilient is your organisation?
Does your organisation have the basic capacity for resilience or are there areas you need to work on? Complete this online self-assessment tool developed by CassCCE. It asks some big questions to help identify key areas where you already meet the basics for sustainability and those where you need to do more work. On completion, you can print a report listing all your findings and giving advice on areas to be strengthened.
http://www.knowhownonprofit.org/tools-for-success/self_assessment

The economic downturn: 15 questions Trustees need to ask
CBI and Charity Commission have produced a guide to surviving the recession including a checklist of 15 key questions charities should ask themselves.
http://www.charitycommission.gov.uk/tcc/ccnews29check.asp

North Yorkshire County Council
North Yorkshire County Council have put together a signposting leaflet to help residents, community organisations and businesses across North Yorkshire know where to go for advice: A guide to help you through the economic downturn.

Real Help for Communities
The Office of the Third Sector have produced an action plan outlining £42.5m support for the third sector in the difficult economic climate: Real Help for Communities: Volunteers, Charities and Social Enterprises.

CAF Financial Crisis Helpline
The Charities Aid Foundation has set up a confidential helpline for charity leaders seriously worried about their financial situation.You can call the freephone Financial Crisis Helpline on 0800 980 2000 to request a one-off confidential discussion with one of their experienced managers. www.cafonline.org.

Association of Chief Executives of Voluntary Organisations
ACEVO is the professional body for the third sector's chief executives. They have launched a new website to provide support to members through the recession. www.recessionsupport.org.uk is an online portal offering practical advice and support on how to lead through these challenging times.

NVCO
The National Council for Voluntary Organisations website (http://www.ncvo-vol.org.uk) has pages dedicated to helping VCOs through the recession including an article to help you ‘Recession-proof your organisation’, information about ways an organisation can diversify its income, good practice information and advice to help VCOs make decisions about whether and how to work collaboratively, and practical resources about how to tighten up your financial systems.

Ben Kernighan, deputy chief executive, NCVO has written an article of the Third Sector with tips for VCOs to survive the recession: http://www.thirdsector.co.uk/Resources/Finance/Article/873960/survive-recession/

NAVCA
The National Association for Voluntary and Community Action, the umbrella body for local sector support, has set up a section on its web site to help its members provide support to avoid the worst aspects of the recession, at http://www.navca.org.uk/localvs/recession. This includes a useful round-up of resources from other organisations.

Compact Voice
Compact Voice has a two-page practical guide 'Key Compact Principles for the Economic Downturn' to help you identify the Compact commitments (the agreement between the third sector and government/public bodies) to be aware of in these difficult times.

Charity Commission
The Charity Commission continues to provide charities with advice and support via its website – www.charity-commission.gov.uk – and its helpline – 0845 300 0218.

The Charity Commission have found that VCOs  have taken steps to limit the impact of the current financial climate, from reducing costs, to increasing fundraising efforts, or drawing on reserves. Some charities have had to put other measures in place, such as cutting or holding off new services, collaborating with others to help them share expertise and costs, or reducing numbers of staff.

Funding
NYFVO produces a monthly funding bulletin which will keep you up to date about funding which will develop from the Government's £42.5m initiative to help the third sector through the recession.

If you need more advice about any of the issues raised please contact NYFVO or your Local Infrastructure Organisation.