The Impact of COVID-19 on Service Delivery and Charity Finances

Cii recently surveyed our members on how COVID-19 has impacted both their service delivery and their finances. The survey also covered charities’ feelings on the future and potential increases in service demand. Our CEO, Liz Hughes, gives her views on the results.

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As we mark the first anniversary of the first case of COVID-19 being reported in Ireland, the landscape of Ireland’s economy and society has changed dramatically. The challenges that all sectors have faced have been at many times overwhelming and the charity sector was certainly front and centre in facing up to those challenges head on. However, the sector has also demonstrated and told a remarkable story of resilience, agility and adaptability.

As we look into the second year of the pandemic it is important that we learn the lessons of what worked last year and build on the innovation and positive collaboration that we witnessed in 2020.

Knowledge and data are crucial as we look towards the future. After such a difficult year we were particularly keen to speak with our members to better understand the impact of COVID-19 on their service delivery and finances over the past year as well as gather projections for the future. Many thanks those membership who responded to our call for feedback.

Increase in demand for services

Of the charities that responded, 64% reported an increase in the demand for their organisation's services during 2020. For those charities that reported an increase, this was on average 40% higher than pre-crisis expectations.

As the country grappled with the overwhelming realities of COVID-19, more and more people approached charities for help. When asked about projections for 2021, 80% of charities surveyed said they expected an increase in demand for their services in 2021 compared to 2020.

For those charities that expect an increase, this was on average, projected to be around 24% higher than 2020.

Tough Decisions

As physical fundraising activity ground to a halt, 50% of charities surveyed told us they applied for financial support or sought other additional sources of funding.

For many, 2020 was a year of tough decisions, 36% of charities we spoke to renegotiated rent, sold property or reduced office space. This means that for all of these charities when we return to our new normal, CEO’s and their boards will need to make decisions again about property and where they base themselves.

Expectations

57% of those we spoke to noted that they expected a decrease in income in 2021 and 70% of charities surveyed are ‘very concerned’ about the impact of a potential recession on their finances.

But there have been some positive trends

Over the course of 2020, we witnessed charities rising to the challenge time and time again. They innovated, they adapted, they brought their fundraising, and in many cases, their service delivery, online as they invested in their digital or fundraising infrastructure.

Of those who did so, some managed to actually improve their final position. Half of respondents indicated that they were ‘slightly ahead’ of their projected income for 2020, but they will continue to need support from both the public and government as the true impact of the pandemic will only be felt when government supports come to an end.

We have seen how other sectors have been supported in this regard. Last year the Government announced a range of supports for the private sector focused on increased digitalisation of services and related training.  However, no such schemes exist for the charity sector.

With so many organisations within the sector undertaking their work and providing their services online there is an increased need for digital innovation supports. For many organisations they have had to invest in technology and upskilling of staff to allow them to continue their work which has placed an additional burden on their organisation. And they’ve had to do this on their own.

As we go into the second year of this pandemic and our new way of working the Government needs to support charities to adapt and invest in their fundraising functions. Charities need to ensure that they can continue to raise the amounts of money that will be needed to see them through the next few years and this needs to be at least a two-year recovery approach.

This ties in with addressing the increased demand for services in 2020 and 2021 as well as the fact that not all charities were able to access the COVID-19 Stability Fund due to the restrictions around the Dormant Accounts Fund.

We have and will continue to encourage the Government to introduce a support scheme for charities to support the digitalisation of services and the necessary training for staff. Such a scheme could be based on the €5.5 million COVID-19 Online Retail Scheme announced in the July Stimulus package and administered by Enterprise Ireland.

Much about the months and years ahead remain uncertain. Charities have stepped up to deliver and adapt at pace, they have played a positive role in partnering with Government to protect and support the most vulnerable in society and they have used every single resource at their disposal to survive. We welcome the announcement of additional support for critical service delivery in the recent recovery plan announced by the Government The Path Ahead. However, as we move from a reactive to a proactive approach, we need to see progress on sustainable and strategic funding to ensure that charities will be empowered to positively impact the lives of those who need their support.