Social Impact: How current global circumstances are affecting the Charity Sector

We all know and accept that the world is in a state of constant change and evolution. Those born in the sixties learnt to use slide rules and log tables in maths, and computers were something we didn’t see until our teens.

Since we were born, we have seen human endeavour reach the moon and the planets. We have the internet, miracle advances in medicine, more effective ways to grow food and technology advancing at a mind-boggling rate. Access to data is such that each of us receives more information in a day than a citizen of the 1500s would have to process in a lifetime. Our brains are becoming overwhelmed! And yet, the past two or three years seem unprecedented. We have lived or are living through the Covid pandemic; we have massive geopolitical challenges, including a major war in Europe for the first time in over 70 years. Climate change is being felt around the globe, and people are challenging all their previous notions and values about life, work, leisure and society.

So, sitting here in mid-2022, we can start to feel some of the effects of all these things. Economically we can’t fail to notice that energy prices are skyrocketing, commodities have been the victim of supply and demand-led inflation, food is more expensive, and a global recession is lurking. Central banks seem to have little power to stave off a potential crisis, using the blunt tool of interest rates to try and stem what is largely supply-led inflation, only to invite recession in through the door. Financial markets have taken a beating, whether equities, bonds, cryptocurrencies or other such instruments. That affects all of us, whether active or passive investors, who have savings in the bank or are pensioners. Unlike the 1500s, we all know about it, we all think about it, and we all make decisions based on what we hear and how we (or others) interpret it. For most of us, the bottom line is that we have less discretionary money to spend.

The charity sector relies on individuals and corporates who “want to make a difference”. But for donors, this is still classed as discretionary spending. As inflation pushes higher than incomes, as is the case now in many instances, “making a difference” starts to compete more and more with going to restaurants, clubs and bars; holidays, a new car, decorating the house etc. How do we in the charity sector ensure that our donor base remains high and expands, continues to give at the same rate or more and does not move to other outlets for their squeezed funds? The Sparkle Foundation is a small charity operating in Malawi but with a global base of donors, both individuals and companies. For us, understanding the sector’s geography and the dynamics in play are essential. If we get it wrong, we will not be able to serve those communities that rely on us to the same extent, which is life-threatening.

Although we raise money worldwide, we still see most of our funding coming from the UK; hence much of our intelligence is derived from there. Figures in other countries will change, especially those with significant cultural or economic differences, but underlying trends will likely apply elsewhere. Holistically we still see the donating community at a high level, with 74% of the public continuing to give, against an inflation figure of about 9%. This number, however, peaked at the beginning of this year at 78%, so some softening. However, we do have the Ukrainian crisis ongoing, and of course, this has been on the TV and front pages of the news since it began, and we believe may be responsible for these continuing high numbers. In terms of broad-based giving, Generation Z and Millennials come out on top, with older people having a more focused approach, probably based on a historical preference for certain causes. Corporates also continue to give, although their cause loyalty is somewhat lower than individuals. Whilst corporates are driven by similar reasons to individuals, they are places for people, after all, Social Responsibility Programmes also drive them. This relates to being a good “Corporate Citizen”, providing opportunities for employees, customer sentiment and having the maximum ability to access external funding and attract shareholders. Green and ethical funds are capturing a larger section of the financial sector, and corporates need to ensure they can match with them.

Whilst the donor base does seem to be robust thus far, there has been a definite change in areas of support. Charities related to health, animals, children, disease research and mental health are gaining in popularity, and of course, across Europe and North America, then Ukraine facing charities are taking a large share. This has been exacerbated by the cost of living crisis, with people seeing Ukraine as a top priority. The economic situation has also seen a drop in the number of people making a regular monthly donation from 31% in the autumn of 2021 to 27% today. So more “one-offs” and fewer monthly. Again, we suspect that driven by the economics, fewer people are feeling positive about the charity sector, with the number moving from 33% in the summer of 2021 to 29% today (although 91% are positive or neutral).

So what does this all mean, and what can we do to ensure we get a share of that pot? Of course, we must have a meaningful and important story. We need to ensure that funds reach those who need them and not pay for an over-expensive organisation and act with the highest of ethics. We need to communicate and engage with donors and potential donors, creating “brand loyalty”. And, we need to ensure that it is easy to donate and remove barriers. We can do this in many ways, but creating corporate partnerships with a win-win ethos is a major step forward. Provide easy online giving routes (this already accounts for 45% of all giving). Increase their social media presence and look to have focussed campaigns and “join in” events, as well as maximise any grant opportunities.

We have been looking at and implementing all of these ideas at The Sparkle Foundation. We recognise that we are in an ever-competitive world, and many charities will not be here for the long term: many are already suffering financial difficulties exacerbated by the Covid crisis. So what do we do? Sarah Brook started The Sparkle Foundation several years ago after suffering a life-threatening illness whilst visiting. The help of local people and medical teams with limited facilities saved her life, and from thereon, she was determined to give back to the community that did so much for her.

Malawi is a small landlocked country in South Eastern Africa. It is a beautiful country with a topography defined by the Great Rift Valley, highlands and Lake Malawi. It is diverse with 20 million people and 12 ethnic groups, but the people are friendly, typified by its nickname as “the warm heart of Africa”. With a GDP per head of a few hundred dollars, it is one of the world’s least developed countries, with subsistence agriculture. Life expectancy is low, and there is high infant mortality. HIV/AIDS, tuberculosis, malaria and malnutrition are frequent causes of death.

The Sparkle Foundation has two sites in southern Malawi, close to the regional capital of Zomba. Our philosophy is one of enabling people to improve their life chances. This is done through several pillars of activity. At our sites, we take the most vulnerable children and provide a Montessori-based education to preschool children, which improves their outcomes whilst in mainstream education, and also increases the chances that their parent(s) will send them to school. We also provide nutrition to those children with two nutrition-rich meals per day and have an onsite medical centre able to diagnose disease and treat many basic medical needs. If hospital care is needed, we have an ambulance at our sites. In the local community, we support various things, from improving agricultural techniques (we are currently establishing our farm), providing youth group activities, teaching about good hygiene and nutrition, and business skills to enable people to establish businesses and provide for themselves. What we do is vital to this community; the community sees us as an essential part of it: we work in partnership.

The future is exciting as we strive to grow and help more African people and communities. Retaining and growing our funding is essential and we are prepared to meet the challenges ahead. If you feel ready to help with this journey, come and join us…

Dr Neville Prior

Neville is by education a PhD chemist, but today is Chairman of a global chemical business operating across three continents. He has a wife and two grown-up children and lives in the English countryside in a 500-year-old house, which is a project in itself. He is passionate about The Sparkle Foundation and its work, is Chairman of the Trustees and has visited Malawi many times, returning in November of this year. His hobbies include playing the saxophone and supporting one of his daughters, who has a career as an international showjumper.

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