A study has shown organisations will build on progress made during Covid-19

Charities are set to build on the innovation they have displayed in response to the Covid-19 crisis.

Research from Pro Bono Economics’ Covid Charity Tracker, produced in partnership with Charity Finance Group and the Chartered Institute of Fundraising, shows wide-spread innovation and invention through the charity sector as a result of Covid-19. That tide of constructive, creative change is expected to carry through and build throughout 2021.

From app-based delivery of food vouchers to hashtag-based running challenges, the crisis has moved fundraising, service delivery and day-to-day operations online. Three quarters (77%) of charities have made greater use of digital and technology during the pandemic, while two thirds (67%) have innovated to deliver services remotely. The shift is all the more remarkable given that, in 2019, only 10% of charities reported to the Digital Skills Report that they had been through a digital transformation process that was embedded in all they did.

The figures show seven in 10 charities want to make more services digital and deliver new services remotely over the next 12 months. Over half (54%) want to increase their use of technology and digital within their back office functions.

Meanwhile, 50% of charities are looking to collaborate more with others in their sector, something 30% were reporting undertaking in August last year. Additionally, 35% wish to enhance their relationships with business. However, corporate giving has not been spared Covid’s impacts. Previous surveys have revealed just under a third (28%) of charities have reported a decline in corporate giving in 2020.

Despite these positive trends, the research provides a clear reminder of the challenges facing the sector. One in four charities (25%) anticipate it taking at least two years for income to return to pre-Covid levels, and 81% expect Covid to negatively affect their ability to deliver their objectives over the six months ahead.

Anya Martin, senior research and policy analyst at Pro Bono Economics, said: “Voluntary and charitable organisations have a long history of overcoming adversity. 250 years ago, they rose to the world-altering challenge of the Industrial Revolution. Following the last financial crisis, the sector pivoted towards new sources of earned income when other sources of funding fell away. This crisis is no different.

“Much about the months and years ahead are uncertain and the funding gap is a flashing red light on the sector’s dashboard. Yet a determined focus on collaboration and digital innovation means it is possible the charity sector emerges from the pandemic more closely knit and more efficient in the long-term – ultimately able to help more people, more effectively.”

Daniel Fluskey, head of policy and external affairs at Chartered Institute of Fundraising, said: "The story of Covid through 2020 for the charity sector has been one of huge challenge, but also of resilience, flexibility, and innovation. The loss of income told to us by the sector in this research means that we have never before seen such a threat to the delivery of charitable services and public benefit that charities exist for. Where charities have been able to carry out fundraising - either through limited activities in a safe and responsible way, or through new channels and innovative appeals - people have responded generously, but we have not been able to match the normal levels of income our beneficiaries rely on for the services they need.

“As we look ahead, we will need to learn the lessons of what worked in 2020 and embed some of the flexibility and innovation that we've seen in fundraising activity. But we also have to be realistic that the charity sector will start 2021 smaller than it was in 2020 and that a full 'recovery' is unlikely to be seen this year."