Sector rallies to mitigate worsening financial picture

14 Jun 2012     Last updated: 20 Jun 2014

Almost half of NICVA member organisations report that their financial situation has worsened over the last 12 months. However, the latest Viewfinder results show that the sector has rallied to mitigate the worst of these problems.

This Viewfinder, the twelfth in the series, provides an overview of a number of issues which are currently affecting the voluntary and community sector in Northern Ireland. The survey focused on the current economic environment and competition, the impact of public sector cuts, sources of income in the sector, training provision, social enterprises, staffing and volunteers.  Viewfinder 12 builds on the research evidence base generated by Viewfinder 11 (March 2012) and outlines not only how NICVA members have been affected by the economic downturn but how they have managed to address a range of challenges.

Download a copy of Viewfinder 12 

Economic environment

The current financial situation is continuing to cause uncertainty and challenges for members.  67% of responding organisations have been affected by the public sector funding cuts, an increase of 14% since March 2012. Of those organisations that reported a cut in funding, almost half (45%) had lost up to 10% of their funding in the last 12 months. For 38% of organisations reporting a cut in funding, the levels of cuts were between 11% and 40%, whilst 11% reported a cut between 41% and 80%.

The wider economic environment has provided opportunities for some organisations, with 17% of organisations stating that the financial situation of their organisation has improved over the past 12 months. For almost half (47%) of the member organisations that responded to this survey real financial challenges exist as their financial situation has worsened over the past 12 months.  A significant minority of organisations (48%) have increased the services they offer over the last 12 months, whilst 14% have decreased their services in the same period. 36% of organisations have seen no change in the amount of services they offer.

Staff and volunteers

For 42% of respondents there has been no change over the past six months in the numbers of paid staff within their organisation.  28% of organisations reported a reduction in staff numbers whilst 20% of organisations stated that their staff numbers have increased. It is also clear that there may be more social need and more pressure put upon member organisations as the economic environment changes.  The trend shows organisations are increasing the number of volunteers, with 74% of organisations affected by funding cuts stating that they have increased their number of volunteers over the 12 months preceding the survey. 

Income

Over a quarter of organisations (28%) that responded to this survey have no earned income and for almost a third (31%), earned income makes up 10% or less of overall income. For 12% of respondents, earned income accounts for more than 70% of total income. For 57% of organisations, grants make up over 60% of all income, and for over a quarter of respondent organisations (28%) grants make up between 90% and 100% of overall income.

Expenditure

Previously, in Viewfinder 11 we reported that member organisations were evenly split on how the current economic and funding environment had affected their overall expenditure in the previous period, with a third of members each reporting increased, decreased and no change in expenditure. 

The main change in this report is an increase in the number of member organisations increasing their expenditure, up 8% to 39% which suggests that many organisations are positively responding to greater current need. The number of organisations decreasing expenditure has increased marginally by 2%. Perhaps significantly the number of organisations reporting ‘no change’ has reduced by 9% to 24% in this period.

Funding

There have been a number of notable developments in the funding environment over the past 12 months. 

67% of responding member organisations stated that they are under increasing demand from funders to show value for money, an increase of three percent. This increasing demand is mirrored by an increase in funding bureaucracy, with 61% of organisations affected by increased bureaucracy and 63% affected by increased demand for monitoring of outputs and outcomes. Working within tighter deadlines is now reported by 55% of responding organisations, an increase of eight percent.

The most significant changes in this period relate to ‘reduced funding period’ which was reported by 38% of respondents (up 14%) and ‘terms of the funding agreement revised’ which was reported by 49%, up 16% in this period.

In line with Viewfinder 11, the most common source of funding for responding member organisations is government departments. 53% of respondents are funded in this way, an increase of 4%. Charitable trusts remain a key source of funding with 47% of organisations currently obtaining funding from this source. Other key sources reported by respondents include councils (42%), the general public (36%) and health boards / trusts (36%).

Information

In May 2012 the Viewfinder 12 questionnaire was made available online to 903 NICVA member organisations.  In total, 191 organisations responded, generating a response rate of 21%. 

If you would like further information about the survey or how to include questions in future Viewfinders, contact the Research Unit on 028 9087 7777.

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