State of the Sector 2024

It has been four years since the NPC published its last State of the Sector report. Since then charities have had to deal with several challenging events and occurrences, including the Covid-19 pandemic, the rise of inflation and increased interest rates.

Key findings reported by NPC’s publication on the state of the sector included:

• Essential public services are at risk due to underfunded contracts held by charities with 62% of charities believing that they do not receive the full value it costs to deliver a pubic sector contract.
• There is a clear gap between the public’s view of charities working where they are most needed and the view of charity leaders with 83% of leaders thinking that they would work in the areas where help is needed most or all of the time.
• The environmental, social and governance (ESG) agenda is not seen as a key opportunity by many charities, with only 31% discussing it at board level.
• Charities are more confident using digital technology but face large financial barriers to doing more.

In light of the report the CEO of NCVO, Sarah Vibert also reflected on the report stating that the pressure of the ongoing ‘cost-of-giving crisis’ means charity leaders are more focused on short-term survival. The report indicates that leaders are having fewer strategic conversations about mission, mergers and partnerships compared to three years ago.

The recommendations for charities to act on include:

• A review of the risks which government contracts may pose to the charities’ sustainability.
• Not to overlook the longer-term risks that charities face in regards to the environmental crisis.
• Ensuring charity leaders make time for difficult conversations at board level thinking about their mission, delivery model or opportunities faced by merging at board level.

Guidance: State of the Sector 2024: Ready for a reset – NPC (thinknpc.org)

Guidance: State of the Sector 2024: Reaction and reflections | NCVO