Charities face hard times

February 20, 2010

here are parts of London where consumers care passionately about the ethical origins of their cocoa-butter body scrub. Until recently these people may have spent little time sorting through the racks in charity shops, but they are now the best hope for a struggling sector that is having to make staff redundant as its income falls.

In the depths of the recession it is acceptable to carry a Selfridges bag in one hand and a Primark bag in the other – a contradiction marked by the decision of Mary Portas, a retail adviser best known for her tele-vision series Mary, Queen of Shops, to open a charity outlet near the Louis Vuitton store at London’s Westfield shopping centre. Portas said she wanted to revamp the “slightly smelly” and “irrelevant” charity-shop image, but charities themselves claim they had the idea first, and the impetus is economic rather than image.

“Retailing is our second-biggest source of income, and there has been a leap in sales of health and beauty products,” said Helena Brett, head of trading for the recently merged Help the Aged and Age Concern, which launched its Well range of ethically sourced fair-trade products in March.

According to Brett, Kentish Town, north London, where the charity has a shop, is an example of an area where the Shea body butter with patchouli and ylang ylang oils, on sale at £4.95, has gone down particularly well. Shoppers can also buy organic chocolate and aloe vera handwash as well as gardening DVDs that show how to grow vegetables in tiny urban spaces.

Help the Aged and Age Concern’s new range reflects a growing trend for charities to earn income rather than rely on donations. Such innovation may be necessary to save a sector that is now suffering deeply from the effects of the recession. More than 1.3m people work for a charity or voluntary sector organisation in the UK but, despite a combined turnover that is higher than car manufacturing, there has been little suggestion of a government bailout. A proposed £42m government funding package is restricted to charities that provide services related to employment and training. As income from legacies and donations falls, leaving an estimated £200m shortfall in charity finances, chief executives fear the offer of help is not nearly enough.

Up to a third of all charities report that they will have to follow big names, like the NSPCC and Shelter, in laying off staff. The disability-rights group Scope recently culled 150 senior managers, combining back-room posts in marketing and communications in an effort to preserve front-line services. John Sparks, Scope’s chief executive, said: “We’ve cut a quarter of senior staff so that we can prioritise services. Since the autumn we have been feeling the pinch. Our legacy income is down 15% and we weren’t in a particularly strong position with reserves. There wasn’t enough rainy-day money, and it’s raining.”

Dame Suzi Leather, chair of the Charity Commission, has warned that the voluntary sector will have to think smarter to survive. Some people who have lost their jobs in financial services may be hoping to work for a charity, but recruitment consultants said their chances are slim unless they have experience of an area that is growing.

Brett, 29, decided to work for Help the Aged and Age Concern after training in the retail sector. Her experience, she said, points to a decade-long process of professional-isation. “Launching the Well range has been very exciting. It’s almost like running my own business and I can help to take the charity into uncharted territory.”

Retail specialists like Brett, along with top fundraisers, continue to be snapped up at a premium, but the days when retired army officers and lawyers could expect to walk into senior roles in the voluntary sector are over.

“Twenty years ago charities were often run by men from the armed forces. That’s no longer true, although there was something to be said for candidates who, when asked what conflicts they had resolved at work, could claim victory in north Atlantic sea battles,” said David Lale, founder of People Unlimited, a charity recruitment agency.

“This recession has led to an enormous increase in applications. We are getting 700 enquiries for a top job, instead of 200. Most of those applications are from outside the sector. People who already have secure jobs are staying put.”

The merger of Help the Aged and Age Concern reflects another trend that has been speeded up by recession – the move towards partnerships between charities with similar aims. Other high-profile partnerships include the RNIB and Action for Blind People. The Charity Commission is urging smaller organisations to follow suit.

“Pooling resources and limiting competition in a difficult market makes sense,” said Lale. “There was a period of overexpansion, but now smart chief executives should grasp the nettle and reorganise.”

One chief executive who did so, however, reorganised himself out of his job. Jeremy Taylor took up his post as executive director of Groundwork East London after 20 years as a senior civil servant. “I worked at the Treasury during what could be called ‘interesting times’ in the Blair-Brown years, and now I’m going through interesting times again,” Taylor said wryly.

Groundwork is a social enterprise charity, working on environmental and training projects for people who are not in employment or education. Changes in government funding, and the growing impact of the recession, led Taylor to implement a merger between Groundwork’s separate London offices, doing away with his own role in the process.

He is now East London director of Groundwork and plans to stay with the organisation. Experts predict, however, that mergers and consolidation will lead to the loss of many jobs in the charity sector.

Stephen Bubb, who leads the Association for Chief Executives of Voluntary Organisations, said that while mergers and partnerships could lead to job duplication, they should not be viewed as a means of shedding staff. “Some charities are struggling. There has been a collapse in corporate funding, and a reduction in income from legacies and donations. However, we have to look forward and ask where jobs are going to come from. They are not going to come from manufacturing.”

Listing the environment, health, education and the arts as growth areas, Bubb said there was still scope for some confidence: “These areas are where the charity and voluntary sector is strong – and these are the jobs of the future.”

THE 10 MOST SECURE JOBS IN A RECESSION

The NHS: Few areas are as recession proof as the NHS. Just as many people need treatment and the government doesn’t want to make cuts in essential services.

Teaching: Children will always need to go to school, and their numbers don’t decline in a recession.

Other public services: Organisations, like the police, that are funded by the state are more secure than those that rely on consumer spending.

Green jobs: Public money will be pumped into environmentally friendly projects, including the insulation of Britain’s homes.

Energy: Work should start soon on several new power stations.

Public transport: Even if you are working for a private-sector contractor, a lot of money being spent on public transport still comes from the government.

Technology: IT work is still available. Experts say specialist skills are particularly in demand. Again, work on public-sector projects will be safer than work in the private sector.

Human resources: HR experts, particularly those with experience in making staff redundant, can still find work, as can career coaches and those who specialise in retraining.

Interim managers: With few organisations willing to take on permanent staff, interim managers who can supervise a particular project, or cover a period of maternity leave, are doing well.

Accountants, finance directors and risk managers: As failed firms are wound up, accountants, insolvency experts and those who specialise in risk management are much in demand.

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