See the big picture
A key theme looking ahead is collaboration – to create scale, for innovation and creative diversity, to tackle digital challenges and ultimately to serve a charity’s beneficiaries.
Head of Charities, Barclays Corporate Banking
Charities have already adapted to challenging times and increasing demand for their services, but with the cost-of-living crisis and a more complex geopolitical climate, charity leaders will need to support their people through a ‘perma crisis’ environment. Leaders need to be ready to drive further change by exploring the benefits of digital tech, while continuing to address the ESG agenda, and DE&I in particular. For example, stats from Pro Bono Economics1 show that women make up 68% of the sector’s employees, but only 56% to 63% of CEOs.
No leader can have all the answers, so I think investing in developing people and bringing in talent from outside the sector will be a priority in 2024. Leaders should also be making the most of peer groups and networks to share best practice. Vigilance around mental health is another important people issue and leaders should set the right example by establishing effective work/life boundaries.
With purse strings tight and service demand at unprecedented levels, sound financial planning has never been more important. I was particularly struck by figures from the Charity Aid Foundation that reveal 81% of charities have seen demand increase2, yet just 55% are confident they can meet their overheads. Effective financial forecasting will be vital in maintaining financial resilience and KPIs will need to be carefully monitored and regularly reviewed.
Striking the right balance between investment and reserves is, of course, critical and charities might need to consider a more risk-based policy and introduce stress-testing into their financial planning. Over the years, funding issues have persuaded some charities to be more commercial when looking at the financial viability of the services they provide, and others may need to drive a harder bargain with suppliers in 2024, as well as diversifying income streams.
It’s prudent for charities to adopt a what if? approach to financial planning and have a plan B ready if things don’t go as expected.
Head of Charities, Barclays Corporate Banking
Some charities are already successfully using artificial intelligence (AI), with just one example being the Royal National Institute for the Blind’s work with Microsoft on a version of ChatGPT to improve the service of its telephone helpline3. However, while the latest Charity Skills Report reveals that 78% of charities see AI as relevant to what they do4, almost the same percentage admit they don't yet feel prepared to use it.
Many smaller charities will be just starting their journey in exploring the potential of AI and other digital technologies in 2024 and will need to ensure they have a clear strategy on how these technologies can deliver the organisation’s purpose. This could mean working closely with expert partners, or even other charities, to deliver the benefits. All charities also need to carefully consider the risks, particularly around sensitive data. We’ve seen ever-more sophisticated cyber-crime, including data breaches and fraud, on the increase in the sector over the past 12 months. I urge all charities to remain super-vigilant.
1https://www.probonoeconomics.com/women-in-charities#:~:text=Overall%2C%20Pro%20Bono%20Economics%20(PBE,employees%20in%20the%20charity%20sector^
2https://www.cafonline.org/about-us/press-office/cost-of-living-charities-still-struggling-to-meet-demand-and-cover-costs^
3Jim Sanders, Director of Innovation, RNIB – during the Barclays National Charities Day event
4https://charitydigitalskills.co.uk/wp-content/uploads/2023/07/Charity-Digital-Skills-Report-2023.pdf^
Charity leaders need to be adaptable to societal shifts, embed ESG considerations into their strategies and communicate clearly to retain trust with donors and supporters.
To build financial resilience, consider building partnerships with businesses, and explore new sources of grants, commercial activities or donors.
Explore the power of AI, data analytics and other digital technologies to boost operational efficiency, service delivery, audience reach and campaign strategy.
Keeping fraud front of mind
Fraudsters are as active as ever across the charities sector, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.
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