The road ahead?

1. The road ahead? A review of the voluntary sector’s operating environment for NCVO members, 2012 • October2012 • Véronique Jochum • Karl Wilding • This report was produced for NCVO members. • It should only be shared within your • own organisation.

2. INTRODUCTION • This publication provides an analysis of the changing operating environment for NCVO’s members and anyone working in the voluntary sector. It identifies and explains a number of forces and trends that are shaping the sector and likely to impact on the future of voluntary organisations. • The report was developed using a PEST analysis to highlight the key drivers shaping the sector in four key areas: political; economic; social and technological. To carry out the PEST analysis we used a range of information sources, from official statistics to the latest economic forecasts, and the expertise of our colleagues at NCVO. • The report firstly draws out the major issues identified as a result of the PEST analysis, which we think will continue to shape the sector in the next five years. It then provides a more detailed summary of the thematic drivers on which these issues are based. • Like what you read? For NCVO members, we’ve got an accompanying slide deck so that you can easily present the analysis. Just email research@ncvo-vol.org.uk. • Source: Piero Sierra www.flickr.com/photos/piero/

3. section ONE: Top-line issues on OUR radar • Using a PEST analysis framework, NCVO regularly scans the operating environment to identify forces and trends – ‘drivers’ – that are shaping the sector. A summary of these drivers is in Section Two. • As a result of our analysis, this year we identified seven key, related issues for the voluntary sector and its future: • 1. Rebalancing the economy: the growth agenda2. Rising costs: the ‘squeezed voluntary sector’3. New money: social investment and evolving business models4. Political polarisation: the anti-welfare agenda5. The Charity brand under attack?6. Accountability in a digital age7. Data-driven social change • We think trustees and managers should take these issues into account when planning for the medium term. All of the above issues present opportunities and threats. • For help and guidance on strategic planning, including PEST, see www.ncvo-vol.org.uk/advice-support/change/looking-out/tools • Source: reidracwww.flickr.com/photos/reidrac/

4. 1. Rebalancing the economy: THE growth agenda • Economic growth – or the lack of it – is likely to dominate politics in the run-up to 2015 as people start to worry more about jobs, debt levels and falling living standards. There is a clear political imperative to grow the economy – and the voluntary sector can contribute to this as an employer and a buyer of goods and services. But this ignores a substantive debate about growth not being the solution – and the need for a different type of economy and alternative, more sustainable business models. • Solutions to the growth challenge are likely to continue to focus upon reform of the ‘supply side’ of the economy – for instance, through the deregulation of labour markets, lower taxes and public spending, and the watering down of both equalities and environmental commitments. This potentially benefits some organisations in the short term – but disbenefits those individuals and communities already marginalised or vulnerable, and has long term implications that could negatively impact on the majority. • Implications for strategic planning: recession is not a blip. Low forecast economic growth means organisations should plan for austerity until 2016-17; rising levels of advocacy and campaigning activity are likely to put the sector as a whole more in conflict with statutory bodies; funding opportunities are likely to focus on innovation that increases organisations’ productive capacity or reduces demand for public services. • Source: Dominic’s Pics • www.flickr.com/photos/dominicspics/

5. 2. Rising costs: the ‘squeezed voluntary sector’ • Rising costs have been a serious impediment to voluntary organisations since 2009. Whilst the rate of inflation is now beginning to slow, this will be no relief to organisations facing seemingly across-the-board inflation-plus increases in (amongst other things) energy, postage and licencing costs (music; newspaper cuttings). In addition, regulatory costs continue to add a cost burden for many charities. • Some analysts are arguing that the Bank of England’s on-going Quantitative Easing programme will continue to contribute inflationary pressure in the economy. There is evidence that funders and commissioners are imposing non-inflationary settlements on voluntary organisations; anddonations are static. Inflation therefore represents a significant threat to the sector’s sustainability. • The transition to ‘greener’ technologies and working practices that consume fewer resources (‘lean innovation’) are seen by many as part of the solution. However, voluntary organisations will need support and working capital in order to make this transition. • Implications for strategic planning: considerable uncertainty surrounds the outlook for costs. The Bank of England expects inflation to meet its 2% target – but independent commentators expect higher inflation in the medium term as energy and commodity prices rise. Group buying solutions and greater use of technology (‘digital by default’) may offer respite – and should be investigated. • Source: pyoorkate • www.flickr.com/photos/49965961@N00/

6. 3. New money: social investment and evolving business models • The social investment market is still a small (£165 million) and emerging market despite significant interest, particularly amongst policy-makers. The attention this market has received appears somewhat inflated compared to its actual size. Nevertheless, the need to generate more income is leading voluntary organisations to rethink the way they operate and explore a wider range of business models. • The biggest challenge facing this nascent market, according to potential investors, is not the lack of funds, but more the lack of investment opportunities: in short, the sector is not ‘investment ready’.For voluntary organisations, social investment is clearly not a replacement for income, and many trustees are still very reluctant to take on loans. For others, social investment provides the means to ‘scale up’ and compete for larger contracts. • In Europe, social entrepreneurship and social investment are seen as drivers of the economic recovery; both feature in the EU’s Social Business Initiative and Single Market Act II. However, the concept of social entrepreneurship differs between member countries. • Implications for strategic planning: the social investment market is forecast to grow to £1 billion by 2016. It is one of the few available options for organisations wishing to grow. More funders and intermediaries are providing support for organisations aiming to become ‘investment ready’, although the supply of funds available may still exceed levels of effective demand.

7. 4. Political polarisation • As the economy tightens and external threats to the economy become increasingly visible, more extreme political parties across Europe have gained support, and growing numbers of voters are rejecting incumbent governments and mainstream parties. This could potentially lead to a situation reminiscent of the ‘culture wars’ in the US. • There is a much harsher public mood towards ‘others’, and in particular those in receipt of welfare: surveys report a long-term shift towards a more individualistic society. In the UK, government has ambitious and, in the eyes of some, harsh plans to tackle welfare that are likely to put large swathes of the sector in opposition to government on issues that it believes it has widespread public support for. • However, tougher government policies combined with continued spending cuts may also lead to increased protest, more local campaigning and stronger social movements. • Implications for strategic planning: many charities are likely to find the public mood difficult, particularly for charities campaigning around welfare provision and rights. Trusts and foundations in particular will need to reflect on the sector’s advocacy and campaigning capacity. In the run-up to 2015, a charged political environment will mean charities will need to ensure they comply with Charity Commission guidance on campaigning. • Source: doughaslam http://www.flickr.com/photos/doughaslam/

8. 5. THE Charity brand under attack? • Trust in charities remains high and has changed little in the last five years, according to the latest Charity Commission figures. However, the sector should not be complacent: a number of recent events have put the Charity brand under the spotlight and as such represent a potential threat in the longer term. • The recent debate over Gift Aid and income tax reliefs highlighted challenging issues, including questions of what is charitable (and accusations government funding negates charitable status), the fairness or otherwise of wealthy donors able to ‘hypothecate’ their taxes, and whether charities are sufficiently distinctive to benefit from tax reliefs (the public benefit argument). The sector also has had to deal with accusations that fraud is common – both by, and on, charities. • Over the last two years, the Big Society agenda has put much emphasis on volunteers. Lively debates on the appropriateness of voluntarism in a range of situations – to deliver public services; as interns; in mandatory work placements etc. – have followed. Some of the discussion has been negative: voluntarism has been equated with amateurism and as threatening those in paid work. • Fundraising – and in particular face-to face-fundraising and its regulation – continues to divide opinion. At the time of writing this is a major focus of the Hodgson review and follow-up investigation by the Public Administration Select Committee. • Implications for strategic planning: at the macro level, the sector needs a stronger narrative on what is distinct and valuable about ‘charity’. Individual organisations will similarly need to communicate strong, clear statements regarding their public benefit. • Source: www.spurgeons.org/network/protecting-against-fraud

9. 6. Accountability in a digital age • Successive ‘scandals’ regarding conduct in public life (such as the MP’s expenses and the Leveson inquiry) and on-going public concern that the elites in society are somehow exempt from the difficulties faced by the majority – the 99% – are feeding into negative perceptions of the accountability and transparency of individuals in public life and institutions. • The sector can be part of the solution, but not before tackling its own accountability deficit. Organisations can sometimes appear unprepared for on-going challenges to their own practices (fundraising costs; salaries of CEOs; pay-out levels of foundations and trusts) and the shift to open data. Surveys continue to suggest that public concerns over these issues limit public trust and confidence. • The shift to more open data is likely to increase calls for accountability and transparency. As a consequence, voluntary organisations will need to make more of their own data accessible: models such as Glasspockets and Open Charities show the likely direction of travel. • Implications for strategic planning: organisations now more than ever need to engage with stakeholders via social media (rather than simply using social media as a marketing channel). Senior management in particular should consider using social media to enhance trust in their organisations. Finally, organisations should plan for the trend away from digital reporting simply via PDF to include more open reporting of ‘machine readable’ data. • Source: justgrimeswww.flickr.com/photos/notbrucelee/

10. 7. Data-driven social change • The increasing availability of data – whether administrative data, so-called ‘organic’ data from embedded sensors – is likely to shape more decision-making in organisations. Lucy Bernholz (author of ‘Disrupting Philanthropy’) argues that ‘data is the new fuel for social change’. • As more administrative datasets become publicly available (open data), linked and geographically aware, it is likely that more and more will be known about how people use services and how public bodies prioritise limited resources to maximise outcomes. Moreover, organisations will be able to measure and pinpoint outcomes more accurately: sites such as aidData and data.gov.uk (and particularly its spend reporting tool for government departments) exemplify the direction of this agenda, enabling organisations to target ‘what works’. • The rise of mobile technology (smartphones, tablets) in particular is likely to drive social change: apps that facilitate giving and sharing will in turn generate data on our ‘pro-social’ behaviour. • Other trends – for example the rise of data visualisation, such as Where Does My Money Go – will help policy makers and practitioners make sense of what is being called ‘Big Data’ (e.g. anonymised health records of the whole population). • Implications for strategic planning: data-driven organisations are more likely to prosper in an era of open public services and ‘networked social change’. Implications are many: they include skills needs (e.g. data manipulation and analysis), policies (e.g. on open data) and the need for investment (e.g. CRM). To quote Beth Kanter, organisations need to become ‘networked nonprofits’.

11. Section 2: Key drivers This section provides a summary of the thematic drivers on which the issues presented in Section One are based. • 1. Political2. Economic3. Social4. Technological • Source: Jonas Wallinder www.flickr.com/photos/jonaswallinder/

12. 1.1 Setting the scene: the wider political environment • The political agenda has largely focused on the economy and reducing the public deficit. This focus will continue to dominate the foreseeable future. • Assuming the government sticks to its tough spending plans, the structural budget deficit should be eliminated by 2016/17, according to PricewaterhouseCoopers, with public sector net debt peaking at around 78% of GDP in 2014/15 and then gradually declining(Source: Outlook on public finance, PwC March 2012). • The results of the recent elections in the UK, France and Greece have reignited the austerity vs. stimulus debate. Could a slower pace of austerity lead to more growth? Government seems so far unlikely to sway and change tack. • UK budget deficit and borrowing (£ millions) • (Source: ONS)

13. 1.1 Setting the scene: the wider political environment • However people’s acceptance of fast and deep cuts appears to be gradually wavering (Source: Ipsos Mori). • On balance, do you agree or disagree with the statement that ‘in the long term, this government's policies will improve the state of Britain's economy’? (%) • What do you see as the most/other important issues facing Britain today? (%)

14. 1.2 The voluntary sector policy environment • Growth vs. austerity: the voluntary sector as solution or problem? • Voluntary organisations are often portrayed as being too dependent on government and seen as a cost. • Their capacity to generate income and role as a contributor to sustainable growth are still not fully recognised, despite evidence that they purchase goods and services worth £17.6 billion and employ 780,000 employees. • Focus on delivery • The ‘Big Society’ is now hardly visible as a brand, but many of the planned measures associated to this flagship policy agenda are slowly being implemented (Big Society Bank, National Citizen Service, Community Organisers and the Community First fund). • Reduced numbers of civil servants has made policy development and implementation more difficult. It is still unclear how the Office for Civil Society will successfully work across government departments. There seems to be relatively little interest in the sector from key ministers. • Civil service FTE figures by quarter – including structural changes • (Source: Whitehall Monitor no.13, Institute for Government)

15. 1.2 The voluntary sector policy environment • The ‘local’ matters more… • The Prime Minister’s aim to devolve power away from Whitehall has resulted in an increased focus on the local and a more disparate operating environment for organisations. • DCLG for example sees less of a role for centrally controlled, large scale funding programmes: instead, it wants to ‘mobilise’ communities, showing them the powers they have to help themselves. • Support of local and national infrastructure bodies has diminished in favour of initiatives that are run by frontline groups and/or aimed at increasing the involvement of individuals in local community action. • …and so does innovation • There is a continued focus on innovation and particularly on technology as an enabler of participation, but it remains to be seen whether this will lead to any significant rise in participation, a greater diversity in the type of people who get involved, and importantly sustained involvement. • “Today [launch of Localism Act] marks the beginning of an historic shift of power from Whitehall to every community to take back control of their lives. The Localism Act pulls down the Whitehall barricades so it will no longer call the shots over communities.” • Eric Pickles MP, Secretary of State for Communities and Local Government

16. 1.2 The voluntary sector policy environment • Public services: a level playing field? • Initiatives to open up public services to a wider range of providers are privileging the largest charities and private companies. Very large contracts are in reality won by very large organisations, few of which are in the voluntary sector. • The development of ‘payment by results’ commissioning will pose additional risks and increase competition with private sector providers. There are potential positives in shifting towards a more outcomes driven model. However, outcome measurement remains a key challenge for providers and there are additional challenges in terms of capital requirements and cash flow. • A greater use of prime-subcontractor relationships to reduce costs is to be expected in the future. However, the success of this model relies largely on prime contractors acting responsibly and proactively managing their supply chains. • The Public Services (Social Value) Act may encourage and enable voluntary organisations to bid for public sector contracts, but they will need to demonstrate impact - a difficult and expensive exercise. Smaller value contracts (those worth less than £250k) are exempt, though it is hoped that commissioners will be encouraged to adopt the principles of the Act. • “The aim of the Social Value Act is to support community groups, voluntary organisations and social enterprises to win more public sector contracts and to change commissioning structures so that a wider definition of value rather than just financial cost is considered.” • Chris White MP, whose Private Members’ Bill became The Public Services (Social Value) Act 2012

17. 2.1 The economic context • Stimulatory monetary policies through the Bank of England’s Quantitative Easing programme have helped to stabilise the economy in the depths of recession, but they have not been successful in generating a strong recovery in difficult international economic conditions. • The continued Eurozone crisis is an on-going cause for concern with implications for the economy worldwide. Economic growth has shifted to emerging economies such as China, India and Brazil, but is slowing due to lower demand from the EU and the US. • CPI Inflation is forecast to meet the Bank of England’s target of 2%, but forecasters predict forces such as oil and commodity prices will strengthen inflationary pressures (Source: Ernst & Young ITEM Club). • The UK economy returned to recession in 2012. The country’s economic output fell by 0.5% in the second quarter of 2012 (Source: ONS). In July, the International Monetary Fund downgraded its UK growth forecast for 2012 to just 0.2%, against the 0.8% it had predicted earlier in the spring (Source: World Economic Outlook, IMF). • Unemployment was down by 7,000 in the three months to July 2012. The total number of jobless fell to 2.59 million, bringing the unemployment rate down to 8.1% compared to 8.2% in the previous quarter. However, the number of people working part-time because they are unable to find a full-time job remains high at 1.42 million. And the unemployment rate for the 16-24 age group is still a major concern (21.6%) (Source: ONS). • The squeeze on public spending is expected to last two years into the next Parliament. • Gross domestic product at current market prices: percentage change, latest quarter on previous quarter (Source: Second Estimate of GDP, Q2 2012, ONS)

18. 2.2 The voluntary sector economy • Falling income, rising costs, higher expenditure to meet greater need • Despite a fall in income and a rise in inflation and costs, voluntary organisations responded to the recession by increasing expenditure by £400 million in 2008/09 and by another £700 million in 2009/10. • However, this is unlikely to be sustainable. The sector’s aggregate free reserves were £42.2 billion in 2009/10; £4.1 billion lower in real terms than at the beginning of the decade (Source: UK Civil Society Almanac 2012, NCVO). • Further trouble to come? • Public sector income supported the sector during recession, representing 38% of total income. Grants are £2 billion less than in the peak of 2003/04. Will Government contracts still increase? • Many organisations are currently planning for round 2 of cuts and restructures. The UK voluntary sector stands to lose £3.3 billion from Government over the current spending review period running from 2011- 2016 (Source: UK Civil Society Almanac 2012, NCVO). • Voluntary sector income and expenditure • (£ billions, in 2010 April prices) • (Source: UK Civil Society Almanac 2012, NCVO)

19. 2.2 The voluntary sector economy • Giving stable, but for how long? • Charitable giving has been relatively stable. In real terms, individual donations amounted to £11.0 billion in 2010/11 as in the previous year (Source: NCVO/CAF UK Giving 2010/11). • A key risk for the sector is its dependency on a number of wealthy donors – just 7% of the population contribute to 45% of the total amount of charitable donations, by giving £100 or more per month. • Debate continues over whether charitable giving in the long term is threatened by the passing of the ‘baby boomer’ generation – and a lower propensity to give amongst Generation Y (Source: CAF). • Marketisation…and voluntarism • In the current context, voluntary organisations including infrastructure bodies will increasingly need to charge for services. Charities will need to explore different commercialisation models and ensure that they are compatible with the public benefit test. • The paid workforce of the voluntary sector reduced by 70,000 between Q3 2010 and Q3 2011, though this has partially recovered in 2012 (Source: NCVO/TSRC analysis of Labour Force Survey). Will voluntary organisations have to rely increasingly on volunteers? • Estimated total amounts given by individuals, adjusted for inflation and unadjusted, 2005/06 –2010/11 (£ billions) • (Source: NCVO/CAF UK Giving 2010-11)

20. 2.2 The voluntary sector economy • Business models and social investment • Seeking more sustainable and diverse income streams, there has been a big rise in the sector’s earned income from trading and contracts. Many voluntary organisations, including infrastructure and intermediary bodies, are now having to charge for services. Meanwhile, those just starting up are considering a wider range of business models to achieve their social objectives – including CiCs, but also straight-up companies. • These trends are important drivers of demand for new money, along with the direction of public service reform, and the extent to which the sector gets a look-in on new contracts. • The social investment market seems ready to take off – it is forecast to increase in value from £165m to £1bn in 5 years –but is largely dependent on the wider health of the sector to stimulate demand (Source: Boston Consulting Group). • However, while social investment is very much on-trend at the moment, it is not suitable for many in the sector. It should be seen as additional option to existing funding sources, not a replacement or panacea. • Voluntary sector income by type of income (£ billions) • (Source: UK Civil Society Almanac 2012, NCVO)

21. 2.2 The voluntary sector economy • Mergers and closures: more visible? • In the context of reduced statutory funding and static giving, there is an expectation that the voluntary sector will experience a growing number of closures and mergers and an assumption that the sector operates like a market, which many contest. • There have been some high profile mergers in the sector, however figures from the Charity Commission suggest that the number of mergers has decreased over the last two years. • Organisations that engage with public sector commissioning processes are being encouraged to merge and collaborate as a prerequisite to winning contracts in order to achieve economies of scale. However, as 75% of voluntary organisations do not have a funding relationship with the state, it seems unlikely that this will result in a substantial reduction in the number of organisations. • Media reports have recently suggested that a significant number (7,000) of removals from the Charity Commission register indicate a sector in crisis. This is unlikely: whilst the sector is undoubtedly experiencing difficulty, and some high profile organisations have entered administration, this number of closures is not unusual. It is also worth noting that similar numbers of new charities were registered (Source: NCVO). • “We ought to celebrate the fact that there are lots and lots of charities and that more people want to make society and the world a better place through their own voluntary endeavour. That is absolutely wonderful. As a regulator, we should certainly not be in the business of closing down or saying you can have only a certain number of organisations doing any particular thing.” • Dame Suzi Leather, Chair of the Charity Commission

22. 3.1 Social trends and attitudes • Inequality and fairness still important narratives • For a number of years the gap between the rich and the poor has increased, and this trend has continued. Social and spatial disparities have got worse (Source: OECD). • Almost three in four people (74%) agree the income gap between rich and poor is too large (Source: British Social Attitudes Survey 28). • There is also growing concerns in all sectors about very high earners and fair pay…but at the same time, attitudes to poverty are hardening (Sources: High Pay Commission; BIS). • Less support for the welfare state? • Despite widespread concern over economic disparity, only a third (34%) believe government should take steps to redistribute wealth. Support for government increasing taxes and spending more on health, education and social benefits has decreased from 51% in 2000, to just 36% in 2011(Source: British Social Attitudes Survey 29). • More than half of Britons (62%) believe unemployment benefits are too high and that they discourage those out of work from finding new jobs. Almost two-thirds (63%) believe parents who "don't want to work" were a reason why some children lived in poverty(Source: British Social Attitudes Survey 28, 29). • “This change of mood…appears to represent a fundamental long-term change that leaves Britain looking like a more individualistic society, one in which those on benefits are judged more harshly than in the past and seen as less deserving of public assistance”(Source: British Social Attitudes Survey 29). • Attitudes towards taxation and spending 2000-10 (%) • (Source: British Social Attitudes Survey 29, 2012)

23. 3.2 The voluntary sector and the general public • Public trust and confidence in charities remains high • Charities are still one of the most trusted groups, with only the police and doctors being more highly trusted (Source: Charity Commission). • However, when prompted with a direct question on how trust and confidence had changed in the past two years, 16% said it had decreased compared to 11 % in 2010. • Levels of giving time and money relatively stable • Levels of charitable giving have also remained flat in the medium term, although the latest figures on donations of at least £1 million pounds represent the lowest number of both donations and total value since 2006/07 (Source: Coutts Million Pound Donor Report 2011). • 25% of people reported that they volunteered formally at least once a month in 2010-11, a lower rate than at any point between 2001 and 2007-08, but unchanged on 2008-09 and 2009-10 levels. Fewer people are volunteering on a less regular basis: levels of formal volunteering at least once a year have dropped to 39% in 2010-11 compared to 44% in 2005 (Source: Citizenship Survey 2010-11). • With the rise of unemployment, the number of people seeking to volunteer to develop or improve skills is increasing. However, voluntary organisations often lack the resources and capacity to provide the support and training volunteers need. In the current context the issue of volunteers and interns being substituted for paid employees is becoming ever more relevant. • Public trust and confidence in charities vs. other organisations • (Source: Charity Commission, 2012)

24. 3.2 The voluntary sector and the general public • Need and social action • The demand for services delivered by voluntary organisations will continue to grow, particularly in the most deprived areas of the country, where needs will be greater and the support of government is much reduced. • This is most starkly illustrated by the rise of food banks such as Fare Share and Save the Children’s recent focus on UK children in recession – activities and campaigns that have unsettled those on all sides of the political spectrum. • The ‘unringfencing’ of budgets at the local level has enabled greater flexibility. But it is leading to more of a ‘postcode lottery’, with changing thresholds and patterns of provision emerging in different areas. There are concerns that reforms to local government finance (particularly business rates) may increase such differences. • As often in times of economic hardship and reduced public spending, there are many examples to illustrate the resilience of communities and the importance of self-help and cooperation (see the Civic Crowd website). However, these projects are often very small, and while often contributing to improving people’s quality of life and sometimes even challenging current models of production and distribution they remain limited in reach and impact. • A challenge is to grow social action in areas where needs are the highest. • “A raft of Government policies – including elected police commissioners, free schools, academies and health service reform – threaten to fragment rather than integrate delivery of better public services at local level.” • Clive Betts MP, Chair of the Communities and Local Government Committee

25. 4.1 Technological change • The use of mobile technologies is expanding. Over a quarter of adults (27%) and almost half of teenagers (47%) now own a smartphone. Globally, the number of mobile phone subscriptions exceeded fixed telephone lines in 2002 (Source: KPCB). • Most mobile smartphone users (60%) have acquired their device over the past year, with many forecasters arguing that the adoption of new technologies is characterised by ever-shortening cycles(Source: Ofcom). • Mobile app downloads are forecast to rise from 10.7billion in 2010 to 182.7billion in 2015 (Source: IDC). Facebook has over 425 million users of its mobile products, yet is seen to have missed the trend towards mobile usage (Source: IPO document). • Many commentators point to the increasing use of mobile phones as virtual wallets, used to make contactless payments via technologies such as Near Field Communications (NFC) or new players in web payment such as Stripe and mPowa. Almost a third of UK consumers have already made a purchase using their mobile (Source: Econsultancy). • A number of tech entrepreneurs are threatening to disrupt the world of online payment, suggesting that online transactions are likely to get significantly easier (Source: Pando Daily). • Mobile phone internet connection by age group 2011 (%) • (Source: Internet Access - Households and Individuals 2011, ONS) • Base: GB adults who accessed the Internet in the last three months

26. 4.2 Social action and technology • E-giving will continue to grow • Smartphones and tablets will increasingly be used to make gifts via text message or through mobile applications (e.g. Givey). With the rise of NFC and a new wave of web-based payment systems (e.g. Square), payment integration in mobile devices could mean organisations could benefit from faster, simpler payments. • Location-based transactions are thought by many to be an important next phase (smartphone users might be encouraged to donate based on their location). Similarly, ‘embedded’ giving (where transactions are embedded in other transactions, such as giving at cash machines) are seen as a growth area. • The rise of social ‘platforms’ • Crowdfunding (and lending) platforms have been very popular in the US and is increasingly popular in the UK – examples include Buzzbnk and Lendwithcare. But existing examples that have been successful show that it requires a good strategy, business plan and network to work effectively. • NESTA’s Innovation in Giving Fund applicants included a number of platforms that facilitate the web-based brokerage of time/skills/assets; micro-volunteering; and social reward/credit schemes (Source: Nesta). This includes the rise of so-called collaborative consumption, exemplified by Landshare and the People Who Share. • Open data and accountability • Public policy increasingly sees organisational data as a public good: some analysts are arguing that charities are an important part of a ‘data ecosystem’ (Source: Alliance Magazine). • As common standards develop (such as IATA) along with more data hubs, we expect the need to open, share and link charity data will increasingly be seen as a core accountability mechanism (Source: Nominet Trust). • “We must not mistake the short-term • fundraising potential of the web and • mobile for the sea change it is already • bringing to people’s expectations of • relationships and communication.” • Steve Bridger, Director of Spring and Beyond Profit Partner at Visceral Business

27. References and acknowledgements • Online references • The Economist – Sweetened Charity • Lucy Bernholz – Disrupting Philanthropy • Beth Kanter– Networked Nonprofits • Ben Hecht – 5 Transformational Forces That Should Be Driving The Social Sector (But Aren’t) • 1. Political • Outlook on public finances, March 2012, PwC • Deficit, national debt and government borrowing, Guardian Datablog with ONS data • Ipsos MORI Issues Index • Ipsos MORI Confidence in the Government's Economic Policies 1980-2011 • Whitehall Monitor no.13 • Speaking Out – Guidance on campaigning and political activity by charities (CC9) • 2. Economic • ONS – Second Estimate of GDP, Q2 2012 • IFM – World Economic Outlook Update • Ernst & Young ITEM Club – Outlook for UK Inflation, November 2011 • ONS – Labour Market Statistics July 2012, • NCVO – UK Civil Society Almanac 2012 • NCVO/CAF - UK Giving 2010-11 • CAF – Mind the Gap: The growing generational divide in charitable giving • Boston Consulting Group –The First Billion: A Forecast of Social Investment Demand • NCVO – David Kane: why "7,000 charities close" doesn't tell the full story • Charity workforce shrinks by nearly 9%, NCVO/TSRC analysis of the Labour Force Survey • 3. Social • BIS – Divided Income, Divided Society: Hardening Attitudes to Poverty • OECD – Divided We Stand: Why Inequality Keeps Rising • High Pay Commission – Cheques with Balances: Why tackling high pay is in the national interest • Natcen– British Social Attitudes Survey 28 • Natcen– British Social Attitudes Survey 29 • Ipsos MORI (for the Charity Commission) - Public trust and confidence in charities • Save the Children – Child Poverty in 2012 • The Coutts Million Pound Donors Report 2011 • Citizenship Survey: April 2010 – March 2011 • 4. Technological • KPCB – Internet Trends 2012 • ONS – Internet Access – Households and Individuals • Ofcom – Communications Market Report: UK • IDC – Nearly 183 Billion Annual Mobile App Downloads by 2015 • Econsultancy– 32% of UK consumers have made a purchase using their mobile • Nesta – Innovation in giving shortlist • Nominet Trust – Open data and charities • Pando Daily – We Have No Evidence Amazon Is Launching a Square Competitor… • Alliance Magazine – Data for Good • Lasa– Digital: What Every Charity Leader Should Know • Acknowledgements • We would like to thank our colleagues James Allen, Pete Bass, David Kane, Charlotte Ravenscroft, Charlotte Stuffins and Chloe Stables for their invaluable contribution to this report.