A closer look at SCVO’s State of the Sector survey

Over three quarters of charities and third sector organisations expect demand to increase but less than a quarter expect staff numbers and income to increase to meet this demand. Only 24% think that the situation for their own organisation will improve, while 35% think it will get worse.

You are unlikely to ever hear anyone say “actually, we’re doing OK for cash"

Now, people who know the sector well will know that we’re not famous for viewing the world with rose-tinted specs, especially when it comes to money. You are unlikely to ever hear anyone say “actually, we’re doing OK for cash – in fact, we’re unsure what to spend our surplus on”. But with a sector that has been able to survive and in many cases thrive in very difficult times, why is it that this latest research shows that we are still worrying about the half-empty glass that awaits us next year? Is it because that’s what you get when you ask hypochondriacs what they think about the health of the third sector? There are a couple of very good reasons for the sector’s mixed feelings about 2014. First, it’s important to note that this isn’t about self-centred navel-gazing – we’re actually more worried about our fellow organisations in the sector than we are about ourselves. While 35% of organisations think their own financial situation will get worse, almost twice as many (58%) think that the financial situation for the wider third sector in Scotland will worsen. What other SCVO research has shown is that this concern for the sector is valid. Predictions made by the sector may lean a little towards the negative but they have always turned out to be surprisingly accurate. While every year has its winners, there are also many losers, particularly amongst smaller organisations which are less able to cope with reductions in funding, and who are forced to plug funding gaps with funds from their ever-dwindling asset pots. Secondly, it’s not always the actual amount of money that’s the biggest concern for organisations. After general funding shortages, the 2nd and 3rd biggest challenges for the sector are the ‘lack of long-term funding’ and ‘Sustainability of funding’ (issues for 68% and 62% of respondents respectively). Respondents speak of the difficulty in being able to plan their services and provide their service users with continuity of service and consistent quality. Small and medium-sized organisations, with their reduced ability to weather any large changes to their annual funding are particularly concerned about short-term funding, and sustainability is a big issue for everyone. Finally, one of the reasons people worry about money shortages is because there’s never enough of it to meet demand or do all the exciting things we want to do. If organisations were ever to get a windfall of additional money, they’d only go and spend it all on helping more people or on fantastic, worthy new projects!