Coronavirus has knocked the charity sector into a severe crisis. Charities expect their voluntary incomes to fall by half, and National Council for Voluntary Organisations (NVCO) estimated that the sector is set to lose £4.3 billion (at time of publication) over the next 3 months.

Here at The Fore, we have spoken to dozens of organisations in crisis due to event cancellations, school closures, cancelled contracts and falling consumer demand. Staff are taking voluntary pay-cuts to keep organisations afloat. Many compelling and unique delivery models could be lost entirely. The scale of this crisis highlights a trade-off that philanthropists must grapple with – that between efficiency and resilience. Efficiency is about minimising the costs of outputs, or by cutting waste and narrowing focus. Resilience is about building adaptability – having the capacity to pivot in order to survive and thrive in changing circumstances. In the good times, we tend to place a great deal of emphasis on efficiency. In a crisis, we need resilience – however, by this point, it is too late to begin developing it. Philanthropists and funders have historically placed considerable emphasis on efficiency in charities. Donors often speak of value for money, asking for measures of output-per-pound and placing a constant downward pressure on overheads. Many grants are also ‘restricted’ to use on narrowly defined projects, with little (if any) funding assigned for broader operating costs. Charities are apprehensive about having any meaningful reserves on their books, as this could damage their chances of winning grants. Staff salaries are suppressed, and budgets for training are minimal, leading to a sector that is under-skilled in crucial areas (such as finance, business planning and digital technology).

All of these practices by donors and philanthropists have constructed a charity sector that is highly efficient, but is brittle and lacking resilience. As a result, the third sector is extremely vulnerable to sudden shocks. In the wake of this crisis, we need to rethink our approach to philanthropy. Philanthropy can’t just be about buying results, but about investing in organisations to make them more secure for the longer term. At The Fore, we hope that our approach to grant-making might be one model for building resilient small charities and social enterprises. We offer £30,000 in unrestricted funding (combined with wraparound support and training) to charities and social enterprises with annual incomes below £500,000. Organisations spend this funding on whatever they need most to unlock the next step in their development.

Charities have used funding from The Fore to access new revenue streams, diversifying incomes by winning new public-sector contracts or developing new products. Charities have also used funding from The Fore to invest in their systems – one organisation used a grant to develop a CRM system, saving an estimated nine days of staff time per month in a team of only seven people. Our findings to date indicate that this kind of support makes organisations stronger, more secure and more resilient, with 85 per cent of The Fore’s grantees hitting their targets for increasing organisational capacity.

This, in turn, has knock-on effects on organisational growth, as increased capacity also gives organisations the opportunity to scale. We compared grantees from The Fore’s pilot programme with an algorithmicallygenerated control group of over 600 similar organisations. Three years after receiving support, The Fore’s grantees had more than doubled in size, while control organisations hadn’t grow at all. We believe that strengthening the organisations receiving grants should be a key objective of funders. When the coronavirus crisis has passed, we hope that the existential threat that it posed to the charity sector will enable us to create a new approach to philanthropy, and help us to build a more resilient sector for the future. The Fore has launched a two-pronged response to the crisis, under the banner of RAFT (Rapid Action by The Fore and Trusts). RAFT Fund is providing grants of up to £5,000 to help organisations

weather the crisis, and prepare for the new and heightened needs of service users once the acute phase of the crisis has passed (in 6-12 months). The Fore has already raised £1 million for RAFT Fund, and is now looking to raise more. RAFT Fund is complemented by the RAFT Directory of Skilled Volunteer Requests, which matches charities and social enterprises to skilled volunteers who can help them overcome new challenges posed by the virus.