Voluntary sector finances pre-coronavirus - a complex landscape

Our analysis of the voluntary sector’s pre-COVID finances, published today, highlights a complex patchwork funding landscape of fundraising, trading, contracts, grants and reserves, all of which have been impacted by the coronavirus pandemic in different ways.

The complexity of this funding means there’s no silver bullet to the financial issues faced by the voluntary sector.  We need a co-ordinated response across a range of different funders and approaches to ensure the sustainability of the sector, including creating the climate where organisations can go back to generating their own income rather than relying on government funding. 

Voluntary organisations, and the work they do, have never been more needed.  We need resilient and sustainable voluntary organisations to continue to respond to the health crisis created by the pandemic, and the impact of lockdown on a range of groups and individuals; to help Scotland to respond to the economic crisis created by the pandemic; to contribute to national discussions on renewal; and to be part of the wellbeing economy we want to build, empowering communities and to provide much needed spaces for people to attend to their own wellbeing.

In thinking about the sector’s funding needs, it is important to remember that everything in the garden was far from rosy before the pandemic.  The Equalities and Human Rights Committee highlighted issues in their 2019 report, including the uncertainty of short-term funding, and the impact on partnership working of a competitive funding environment; we highlighted the importance of these recommendations in our submission to the Advisory Group on Economic Recovery, and were pleased to see them echoed and built on in the Group’s recommendations.  We also raised these issues with the Cabinet Secretary in our webinar last month, and will continue to discuss solutions with Scottish Government and the wider sector. 

Since the pandemic hit, we have also been working with independent funders to encourage collaboration, information sharing and strategic decision making on future funding.  Most recently we have called on all funders, including the Scottish Government, to learn the lesson from COVID emergency funding in making future funding streams flexible, based on trust, and as easy as possible for organisations to apply for; SCVO Chief Executive Anna Fowlie made this point strongly at the Local Government and Communities Committee last week.  We’ve also joined partners across the UK in calling on the Westminster government to make changes to Gift Aid which would bring in additional funds to the sector, and are entering into conversations with COSLA on future joint working arrangements between local authorities and voluntary organisations.

The stories being collated under the #NeverMoreNeeded, and questions from voluntary organisations to our webinar discussions with the Cabinet Secretary and the COSLA President have helped us to understand some of the complexity of the situations individual organisations are finding themselves in, but we know that we have more to learn from you, particularly as we move to the next steps of our work in finding joint solutions to the longer term funding issues being faced by the sector.  Join us this week for our webinar with independent funders, and keep an eye on our website for further ways to get involved soon.