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What are some of the financial, political and regulatory challenges facing civil society leaders? 

In this era of change, there are an increasingly large number of external factors that are creating unpredictable, complex and uncertain challenges.   

These challenges can come from: 

Political volatility 

The ongoing uncertainty surrounding Brexit and its effect on our economy is almost certainly going to have a large impact on the funding of many civil society organisations; including those in Wales. 

Those that have relied heavily upon EU funding, will be looking to diversify their income streams to replace the potential lost revenue. Thus, the funding environment is becoming increasingly competitive, which can mean organisations are prioritising and focusing on trying to raise funds.   

Economic shift 

Many organisations have encountered, and continue to predict, an increasing demand for services. This, paired with stagnant or reducing income, has adversely affected charities’ reserves. 

Diminishing reserves will result in charities being forced to make the decision whether to reduce their current services or to postpone investing in their own, longer term, strategies. Both of which, could have a detrimental effect on the future of our sector in the face of the increased demands being placed upon us.

Changes in the regulatory environment 

Over recent years we have seen an increasing volume of legislation, regulations, codes of practice and compliance standards across the sector. We now have a new Fundraising Regulator, numerous new Ministers and ‘the changing of the guard’ at the Charity Commission.  Increasing governance requirements come at an increased cost, and at a time when many organisations have less resources and reduced funding, creating a complex challenge. 

Small organisations especially have, for example, been overwhelmed with the complex GDPR regulations; both in terms of truly understanding what is required from them, as well as having the resources available to apply these regulations within their charities.  Often it is not that organisations don’t want to comply; it’s more about how to comply and where to start, when there are multiple competing demands and priorities. 

Different funding models 

The number of charitable grants available are reducing and it is becoming common for those that remain to have outcomes frameworks placed upon them, making them almost indistinguishable from contracts in many cases. 

Contracts themselves can appear attractive but often have short-term timeframes, little co-design and poor use of payments by results.

 How have technology, people and public trust become greater challenges?

While we may have little, to no, control over the impact of some challenges, such as Brexit, there are several challenges that we can chose to embrace both as a sector together, or within our individual organisations, through culture, innovation and public relations. 

These challenges can include: 

Technology 

Innovations such as block-chain, artificial intelligence (AI) and robotics will have profound effects on our society, our organisations and our workforce, in ways that we are not even aware of yet.   

Many organisations can, and may, resist some of these technological changes for the time being, for numerous reasons such as: lack of funding; lack of skills; lack of time. However, as society develops and accepts these advancements, those that do not embrace, or plan for, these changes now will be left behind. 

People 

Staff recruitment and retention is one of the most worrying issues facing us. 

While this isn’t a challenge unique to civil society, our former ‘unique selling point’ whereby commitment to the cause was able to compensate for lower salaries, is now being eroded by the emergence of purpose-led businesses and an increasingly sector-agnostic generation of millennials and beyond. This of course extends to volunteering, where this is making it increasingly difficult to recruit and sustain volunteers. 

Varying levels of public trust and confidence 

We are operating in an environment with a varying level of public trust. The recent fundraising and governance scandals have had a detrimental effect on the perception of charities. 

There has been a noticeable societal shift in the way that the public view “institutions” where trust was previously taken as a given.

 Are there opportunities ahead?

This era of change can appear to be presenting leaders with more challenges than ever before. 

However, it is far from doom and gloom.  In the face of such complexity and volatility, there are several exciting opportunities that civil society leaders can begin to explore as a result. 

These include: 

A renewed emphasis on focus

Reduced resources mean we need to concentrate more than ever on the activities that make the biggest difference and have the greatest impact. 

Reduced resources also mean the increased need for collaboration, diversification and finding new enterprising approaches. 

A renewed emphasis on localism 

As the state retreats from providing public services, it seems likely people will fall back on the local services around them for the support they need. 

Also, in a big world of globalisation, people have an increasing need to feel rooted in their local community. 

There’s also an opportunity here for local charities to emphasise their local roots and relevance in their supporters’ own neighbourhoods.  Embracing the Welsh language and supporting Welsh culture could be an opportunity for organisations operating in Wales. 

An opportunity to harness technology 

Technology can be used to drive more holistic approaches to the way we serve beneficiaries.  It can be cost effective and help your charity’s services become more accessible to different audiences and generations.  As well as taking over much of the unrewarding aspects of work, technology can free up people for more creative and interpersonal activity. 

The opportunity to provide an “antidote” to technology 

One reaction to accelerating technology is a greater tendency to value something simpler - something that feels local, analogue, or human. 

Charities can offer quality time, moments and spaces where people remember and act on our shared humanity - with their phones switched off.

 Eight ideas how we can lead our organisations through this era of complex change 

Embrace diversity, equality and values-led leadership. Drive the agenda for change. 

Champion digital solutions at leadership, and Board level, and drive the integration of digital across your organisation.   

Governance is now truly in the spotlight and good governance is at the heart of any effective organisation. 

Produce responsive strategies: test, adapt and learn.  Move away from traditional strategy (planned) models. 

Continue looking outwards and resist the pull to become inward looking, regardless of how challenging things can be at times. 

Flexibility and openness is key. Embrace change and generational change e.g. millennials, generation Z. 

Help to change perceptions. The sector should reframe core costs as a long-term investment that facilitates innovation and development. 

Invest in yourself as a leader, and in your teams, to build resilience.   

How can ACEVO help civil society leaders to lead successfully in this era of change? 

Civil society leaders need to lead differently to ensure we can handle whatever life throws at us.  We have qualities that put us ahead in adapting to these new demands – flexibility, resilience, passion and commitment. 

To keep up with a continually changing environment, civil society leaders must constantly develop and learn new skills, help others to grow and change their behaviours. ACEVO can help you.  It’s a charity itself and ACEVO invests in civil society’s leaders – whether through encouraging peer support and sharing of good practice, by offering leadership development opportunities, or by reinforcing leaders’ mental health and resilience. Good leadership in turbulent times is based on relationships, connections, authenticity, growth, commitment, trustworthiness and the desire to improve; it comes from both the head and the heart. 

There’s not much we can do about volatility, uncertainty, complexity or ambiguity – but by leading differently, leading digitally and leading for greater impact, we can be prepared for it.

ACEVO exists to help civil society leaders make the biggest possible difference. It inspires and supports a network of over 1,000 leaders in Wales and across the United Kingdom. Providing leaders with valuable connections, advocacy and skills. To find out more visit www.acevo.org.uk 

WCVA has recently announced the reopening of the Walter Dickie Leadership Bursary, which aims to help leaders in the third sector to develop their entrepreneurial leadership skills. Visit the website for information on how to apply.