March 23, 2010; Third Sector Online | The chairwoman of the U.K.’s Charity Commission warned this week that “large charities that are heavily reliant on public sector funding must take measures to avoid finding themselves on a ‘financial cliff edge’ when the current spending round ends.” Her comment was in response to the release of the Economic Survey of Charities by the National Council for Voluntary Organisations, which reported that 86 percent of the 1,000 charities in the poll were optimistic about the nonprofit sector’s economic position, up from 69 percent of respondents voicing optimism only six months ago.
The chairwoman, one Dame Suzi Leather, hinted that the optimism might be especially unwarranted for those charities whose most important income stream is the public sector. That sounds much like the U.S. situation, in which many domestic charities that received lots of stimulus money now face a future of the stimulus funds ending.
Many U.S. nonprofits find themselves looking at the financial cliff that Dame Suzi warned about. For British charities, the possibility of the Conservatives tossing out Gordon Brown’s Labour government in the upcoming elections must add to their potential apprehensions.
As Economist editor and “philanthrocapitalism” promoter Matthew Bishop noted last week, the voluntary sector in the U.K. has traditionally been more comfortable with the propensity of Labour governments to provide more funding through charities. David Brown and his Conservative Party allies have said little about nonprofits other than voicing vague interest in promoting smaller organizations, according to Bishop, not much for nonprofits to hang their sectoral hats on.
So Dame Suzi, Labour PM Brown, and Conservative Party leader Cameron, what do you plan to do to protect British charities from falling over the edge of the cliff? And what can we in the former colonies learn from your strategies to help our nonprofit sector brave a post-stimulus funding picture?—Rick Cohen