NCVO webinar: How charity sector trends can inform your next board strategy
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Slides from a webinar, broadcast on 19 November 2019, providing an overview of the state of the charity sector and exploring how some of the trends can inform your board strategy. View the full webinar at: https://www.youtube.com/watch?v=8_Cdwc_HPaI
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NCVO webinar: How charity sector trends can inform your next board strategy
- 1. HOW CHARITY SECTOR TRENDS CAN INFORM YOUR NEXT BOARD STRATEGY
- 2. TOPICS WE’LL COVER Size Money Transparency Diversity
- 3. WHAT IS THE ALMANAC?
- 4. OVER 15 YEARS OF DATA ON CHARITY FINANCES, WORKFORCE AND VOLUNTEERING
- 5. OVERVIEW OF THE SECTOR
- 6. Poll 1: How many General Charities are in the UK?
- 7. THE TOTAL NUMBER OF ORGANISATIONS IN UK REMAINS RELATIVELY STABLE Number of voluntary organisations in UK, 2000/01 to 2016/17 Source: The UK Civil society Almanac 2019; NCVO - 50,000 100,000 150,000 200,000 2000/01 2002/03 2004/05 2006/07 2008/09 2010/11 2012/13 2014/15 2016/17 166,854
- 8. Poll 2: What’s the total income of the sector?
- 9. WHAT’S THE TOTAL INCOME OF THE SECTOR?
- 10. Poll 3: How many trustees are there in the sector?
- 11. HOW MANY TRUSTEES ARE THERE IN THE SECTOR?
- 12. THE SECTOR’S FINANCES AND YOU
- 13. Based on the Almanac definitions, how big is your organisation?
- 14. MOST CHARITIES ARE MICRO AND SMALL
- 15. CHALLENGES FOR RUNNING SMALL CHARITIES • No paid staff and reliance of volunteers means responsibilities can be blurred • Changing funding sources • Changing nature of grants • Often left out of government planning
- 16. CHALLENGES FOR RUNNING LARGER CHARITIES • Difficulty in keeping an oversight of the charity • How can the board know everything? • Higher levels of public scrutiny? • Challenge of managing an organisation at scale (eg resources and operations) • Managing relationship with permanent expert executives
- 17. WHERE DOES YOUR MONEY COME FROM AND WHERE DOES IT GO? Source: The UK Civil society Almanac 2019; NCVO
- 18. TRANSPARENCY IN REPORTING Source: Trust in Charities 2019; Charity Commission
- 19. EXAMPLES OF GOOD TRANSPARENCY
- 20. Have you done any of the following?
- 22. STAFF CHARACTERISTICS Voluntary sector Public sector Private sector Total N of employees 865,916 7,087,452 24,134,174 Male 33 34 59 Female 67 66 41 16—34 29 28 37 35—49 34 37 33 50+ 38 35 30 White 91 88 88 BAME 9 12 12 Not known 0 0 0 Source: The Labour Force Survey 2018; ONS
- 23. CHARITIES HAVE A LOWER GENDER PAY GAP COMPARED TO OTHER SECTORS 7 12 11 12 0 2 4 6 8 10 12 14 Charity Private sector Public sector Total Median difference in hourly pay by sector, 2018-2019 (%) Source: Gender pay gap in large charities: findings from the latest data 2019; NCVO
- 24. WHAT DOES YOUR BOARD LOOK LIKE? Source: Taken on Trust 2017; Charity Commission
- 25. Which recruitment practices have you tried to improve your board’s diversity?
- 26. Questions to ask your board Size: What challenges are we more likely to face because of our size and scale, how can we prepare for these? Money: How does our income and spending match the sector overall and are we comfortable and able to justify our ratios? Transparency: How can we better ensure we are effectively communicating both our impact and information on how we are run? Diversity: Could our charity benefit from increased diversity of skills, experience and background? If so what do we need to differently to attract and retain this talent?
- 27. USEFUL RESOURCES UK Civil Society Almanac 2019 https://data.ncvo.org.uk/ NCVO publications and research www.ncvo.org.uk/practical-support/publications • The Good Trustee Guide, 6th ed., NCVO 2015 • Good governance: a practical guide for trustees, chairs and CEOs • Research briefing ‘Planning for tomorrow's workforce: Understanding skills and skills gaps in the sector’ www.knowhownonprofit.org • Governance guidance • Board basics • Income diversification tool Charity Governance Code www.charitygovernancecode.org 27
- 28. FURTHER SUPPORT 28 • NCVO Consultancy www.ncvo.org.uk/training-and-events/consultancy • NCVO training https://booking.ncvo.org.uk/training • Trustees Unlimited https://trustees-unlimited.co.uk/ • NCVO Annual Trustee Conference: https://www.ncvo.org.uk/training-and- events/trustee-conference • Charity Commission: www.gov.uk/government/organisations/charity- commission • Infrastructure bodies e.g. ACEVO, Small Charities Coalition, WCVA, Association of Chairs • Local infrastructure bodies: Council for Voluntary Service/Voluntary Action, Volunteer Centre
- 29. Q&A
Hinweis der Redaktion
- Introduce ourselves
- We will be discussing the following…
- Keeva Give some brief context on the Almanac-give over 15 years of data on the size and scope of general charities in the UK. We look at charity finances, workforce and volunteering General charities (different to registered charities) doesn’t include organisations like universities, independent schools, churches etc Mention that the 2019 Almanac covers 2016-17.
- Get started with a few quick-fire polls…
- Keeva Remind them that this is just general charities so doesn’t cover the full scope of the sector Poll 1: how many general charities are in the UK? 998,092 166,854 40,019 95,999 180,890
- Keeva The answer is… 166,854 If they expected it to be higher, it could be that they are thinking on non-registered charities, or charities that fall outside of the general charities definition. Number of voluntary organisations have generally remained steady
- Dan Remind them that this is just general charities… Poll 2: what’s the total income of the sector? £23.4bn £100bn £50.6bn £75.8bn
- Dan The income was £50.6bn, an increase from £49.7bn the previous year
- Dan Lastly… Poll 4: How many trustees are there in the sector? c850,000 c60,000 c950,000 c700,000
- Dan c700,000 This is only ‘unique’ entries. If you predicted higher it could be that you are thinking of people who sit on multiple boards or the number of trusteeships as opposed to individual trustees. Taken on Trust charity commission report 2017
- Keeva Start with another quick poll In the Almanac we measure size of organisation by how much income they bring in, not number of employees. Super major (More than £100m) Major (£10m to £100m) Large (£1m to £10m) Medium (£100,000 to £1m) Micro and Small (Less than £100,000)
- Keeva Mention that while most charities are smaller, the larger charities tend to have the most income, assets and expenditure Concentrated mostly in the large, major and super-major categories Interesting: While only making up around 0.5% of all organisations, major and super-majors make up over 50% of the sectors income Dan What does this mean for people on the webinar? How does their org compare?
- Dan to do
- Dan to do Larger charities more likely to work nationally and overseas whereas smaller organisations are more likely to operate locally. Super-major organisations have by far the largest proportion of organisations that work at a national level (70%) or overseas (18%). For more info: Super-Major: 10% operate locally 70% operate nationally 18% operate overseas 2% operate nationally and overseas Major: 40% operate locally 39% operate nationally 11% operate overseas 10% operate nationally and overseas
- Keeva There are 6 different income sources that we use in the Almanac. The largest income source is the public. The public isn’t just donations and legacies- it also includes charitable services that the public use (membership fees for charity services, delivering training) trading income (eg goods bought in a charity shop) and fundraising. Second largest income source is from the government. This also includes EU and international governments. *Key trends* While income from the public and government remain large, overall growth in income is due to an increase in grants and investments. Income from the public and government shows signs of plateauing This is shows the importance of looking at where your money comes from and diversifying income as much as able to. Check NCVOs income diversification tool. *Expenditure* Explain that boards often have to debate the proportions of their spending. – the sector spent 96% of its income. Majority went on charitable activities (ie activities that deliver the charities mission). Smallest proportion went towards governance however governance costs are underestimated in our reports- some charities report this under charitable activities Dan What does this mean for boards? Critics of the sector often criticise charitable spending but also want organisations to be run well
- Dan Why is transparency important? Transparency in spending is important to public trust- Trust in Charities 2018 data- when asked to rank which is most important in deciding to trust a charity on a scale of 0-10, being transparent about spending was ranked highest 8.8
- Dan *Explain examples of good transparency* Pinned tweet from Barnados Scotland- tweet give 5 quick impacts made that month. This is easily disseminated and sharable. It is also pinned so it is the first thing you see when going on their twitter. Infographic is very clear and visual. Impact calculator from Solar Aid (a charity that provides access to solar lights in Malawi and Zambia). In the impact calculator they don’t just say how many solar lights will be bought with your donation, but also how many people it will affect and the environmental impact. It is also interactive which is more appealing
- Dan We’ve discussed the importance of being transparent and seen some great examples of transparent reporting, so would be great to get an understanding if you do any of the following… Poll 6: Have you done any of the following? Ensure that board members and what they do is easily available on your website Show how much of a donation goes directly to charitable causes Publicly report CEO salary Make your annual report accessible on your website Publicly report gender pay gap data
- Keeva Workforce= over 860k Vol sector more likely to be female, older and white Compared to private sector which is spread out more evenly We did some research into skills gaps that explored why the sector isn’t more diverse. We found that charities value qualifications and experience which may put groups who have barriers into education and work at a disadvantage. Namely, young people, BAME people, disabled people and people from lower socio-economic groups. Really interesting, see skills briefing for more info… IF ASKED: voluntary sector employees are also more likely to be employed part-time (37%) than public or private sector employees (28%; 25%) More likely to be temp contract (9%) than public or private sector (7%; 4%)
- Keeva All organisations with 250+employees must report their gender pay gap. In 2018-19 571 charities submitted their gender pay gap data (5% of total employers that year). On average, men get paid 7% more than women working in charities. The difference is much smaller than in both the private (12%) and the public (11%) sector. While we are better than other sectors with gender pay gap, as we have a majority female workforce so having a pay gap isn’t great! --------------------------------------------------------------------------------------------------------------------- IF ASKED: Highest paid quartile- 63% are women which is lower than overall proportion of women in the workforce (underrepresented in the higher paid jobs)- Still much better than in public and private sector (54% and 36%) IF AKED ABOUT ETHNICITY PAY GAP: The Equality and Human Rights Commission found that only 3% of employers measure their disability and ethnicity pay gaps. Therefore we aren’t able to look specifically at ethnicity pay gaps in voluntary sector According to ONS: In 2018, Chinese, Indian and Mixed/Multiple ethnic groups were the highest earners, followed by White British. The ethnic groups that had the lowest median hourly pay were Pakistani and Bangladeshi If asked: Data is sourced from freelance data scientist David Kane and based on the government Gender Pay Gap service Charity numbers are based on data from findthatcharity Organisation type is determined by matching based on company numbers. This matching could be wrong in individual cases: Charities sometimes have incorrect/missing company numbers Company numbers can have odd formatting Public sector organisations are assumed based on those organisations without a company number which might be incorrect General charities classifications are based on the general charities definition used in the UK Civil Society Almanac The data may be incomplete and some organisations still missing
- Dan Reminder- 700,000 trustees Majority are men, white and average age of boards is 55-64. Very few under 35. Also according to the Young, Gifted &…a Charity Trustee? Survey in 2013, 85% of people under 35 would consider becoming a trustee Go to Charity governance code website to find recommended practice for small and large charities to increase governance diversity and evaluate your recruitment practices
- Dan It would be great to see if you have tried any of the following. Also comment if anything worked really well or didn’t work well Poll 7: which recruitment practices have you tried to improve your board’s diversity? Reviewing time, location and frequency of meetings Paying expenses to trustees Reviewing where and how trustee vacancies are publicised Monitoring and reporting on diversity Examining skills, experience and diversity of the board to find imbalances and gaps
- Dan
- Prepare a few questions in case the ones we get aren’t that great Trends in gov funding- changing nature of grants and contracts- blurring of lines- performance related grants. Local gov funding reduced and central gov funding is slightly more volatile Income sources by size of org- small orgs less likely to get legacy funding, fewer will have investment income… Unrestricted and restricted funding– we don’t analyse that data What is a good level of reserves? 6 months of spending average (Dan can talk more on this- recommendations between 3-6 months)