Northern Rock Foundation

“There are two groups; there are those that are basically saying we will do anything we can to cut back, we will tighten up and batten down the hatches and then there are the others who are saying we are open to transformation here.”

Two major studies chart the strengths and the vulnerabilities of the voluntary sector in the North East and Cumbria and point to the actions organisations will need to consider in order to respond to change whilst facing additional demand and managing an uncertain financial future. These reports are especially relevant for those parts of the voluntary sector that are particularly vulnerable to public sector spending cuts, due to be announced in this week’s Comprehensive Spending Review.

These large scale studies show that some parts of the sector will fare better than others.

1 Many enterprising organisations will survive

About 20% of Third Sector Organisations (TSOs) are mature organisations which deliver direct services to beneficiaries. They are entrepreneurial in their outlook, train their staff and volunteers, and have been planning well. They tend to have a mixed profile of income, are businesslike, focused and know what they need to do.

2 Traditional locally embedded charities are better placed to continue

A core of about 50% of TSOs are locally embedded traditional organisations which may have thrived on a growth in pubic sector grants in the last 10 years, but will probably continue to survive by other means.

3. Which are the most vulnerable organisations

About 30% of organisations, many of which started up since 1997 or grew during that time are the most vulnerable. They emerged in response to major investment in regeneration and sustainable communities agendas. Most do very good work, but many of these organisations lack the agility, independence or financial base to weather change now.

Organisations which do not provide direct services to beneficiaries may be amongst the most vulnerable. Those which offer capacity building support, such as CVSs, to other TSOs are likely to be especially vulnerable as the government agenda shifts away from partnerships, and infrastructure support declines.

In spite of the economic climate, most TSOs are fairly confident about their future survival and financial prospects: -

• The vast majority of TSOs (89%) believe that their organisation will continue to operate in the long term;
• Most TSOs (72%) expect their income to remain the same over the next two years and 11% think their income will rise significantly. However, 17% expect a significant fall in income.
• Almost all TSOs (97%) think that demand for their services will stay the same or rise significantly. Those that have, or may have, a role in delivering public services are also confident that their involvement in the delivery of public services will stay the same or increase.

Comments from Focus group participants taken from theForearmed with Foresight report:

“It’s accepting that change is the norm and that you are going to have to be enterprising and innovative, and creative. If you don’t, government cut backs, or a recession, or whatever will take the ground from under you. So you can?t relax and say everything is great.This is the norm, you have to keep that upwards spiral going.”

“It’s trying to get the balance between being realistic and being optimistic and I think at the moment there’s a danger of people being very pessimistic. But actually a way to be successful is to be optimistic and I know it sounds like pie in the sky but I’m sure that’s true.’

Tony Chapman, Professor of Social Policy and Project Leader, Teesside University said:

“The speed at which cuts are to be made is likely to hit voluntary and community sector organisations and social enterprises particularly hard. Local authorities, government departments and quangos are eager to protect what they can of their core services. Inevitably they will scan the social market for soft targets.”

“The third sector has had many boom years under Labour and it is certain now that there will be a period of contraction. But this sector is populated with people who have strong values and beliefs, and have the skills and commitment to make a difference. Our research shows that sector is remarkably optimistic about the future. And one way or another, even if many organisations have to scale down what they do, the majority will keep the show on the road.”

P rofessor Fred Robinson, Durham University, who is co-director of the project said:

“Voluntary and community organisations are certainly worried. They are struggling to cope with uncertainty – and feel like they can’t plan for the future. Many  are resilient and have faced difficult times in the past. But some will find it hard to get funding and just won’t survive”.

Penny Wilkinson , Chief Executive, Northern Rock Foundation said:-

“This research provides an independent and objective insight into the state and nature of the voluntary sector. Its findings might be controversial but the conclusions it draws can translate into practical actions for voluntary sector organisations that will be facing very difficult choices in the next few months”

Background information for editors

Two reports are published simultaneously by Northern Rock Foundation:

Keeping the Show on the Road ,

by Prof Tony Chapman, Dr Peter van der Graaf and Dr Victoria Bell, ( Teesside University), Prof Fred Robinson ( Durham University).

A survey of over 1,000 Third Sector Organisations (TSOs) in North East England and Cumbria undertaken by Teesside University for the Northern Rock Foundation’s Third Sector Trends Study.

The study was undertaken in May 2010 just after the General Election.

The sample characteristics have been matched with mapping data from the Third Sector Trends Study undertaken by Southampton University, NCVO and Guidestar UK. These comparisons confirm that the sample is broadly representative of the third sector in North East England and Cumbria.

Forearmed with Foresight ,

by Dr Victoria Bell and Prof Tony Chapman ( Teesside University) and Prof Fred Robinson ( Durham University)

A study of 12 one hour focus groups in North East England and Cumbria by a panel of experts and practitioners from the third sector, public sector and private sector.

The focus groups took place shortly before the election in spring 2010 in Newcastle, Middlesbrough and Penrith.

They will be available from week beginning 17 th October, 2010 on the Northern Rock Foundation website www.nr-foundation.org.uk

For more information, contact

Professor Tony Chapman
Social Futures Institute
Teesside University
Middlesbrough TS1 3BA

Mobile 07949 022 627
Landline 01325 248500
contact Hilary Florek 0191 284 4054 – 07831 552624 – hilary@hilaryflorekpr.co.uk