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Samaritans closures show brutal reality of financial crisis for UK charities Samaritans closures show brutal reality of financial crisis for UK charities
(30 minutes later)
Household names are having to take drastic action as they lack resources to meet rising demand for their servicesHousehold names are having to take drastic action as they lack resources to meet rising demand for their services
A week ago the voluntary sector was being love-bombed by ministers at launch of the civil society covenant, an agreement designed to cement the role of charities in the government’s economic growth plans and social renewal mission At one level, it was a heady moment of optimism for a sector used to being patronised and ignored. A week ago ministers were love-bombing the voluntary sector at the launch of the civil society covenant, an agreement designed to cement the role of charities in the government’s economic growth plans and social renewal mission. At one level, it was a heady moment of optimism for a sector used to being patronised and ignored.
A few days later, news that the mental health charity Samaritans is to close about half of its 200 branches over the next few years was a reminder of the cold, hard economic reality gripping much of the sector. Samaritans is just the latest household name UK charity to take drastic action to stave off financial crisis.A few days later, news that the mental health charity Samaritans is to close about half of its 200 branches over the next few years was a reminder of the cold, hard economic reality gripping much of the sector. Samaritans is just the latest household name UK charity to take drastic action to stave off financial crisis.
In recent months Macmillan Cancer Support has axed a quarter of its staff and cut millions in hardship grants; the disability charity Scope has cut a fifth of its workforce; at Oxfam GB 265 roles are at risk; 550 jobs will go at the National Trust; and the counselling charity Relate was rescued from administration having cut a third of its staff. In recent months Macmillan Cancer Support has axed a quarter of its staff and cut millions in hardship grants; the disability charity Scope has cut a fifth of its workforce; at Oxfam GB 265 roles are at risk; 550 jobs will go at the National Trust, and the counselling charity Relate was rescued from administration having cut a third of its staff.
This is just the most visible tip of the iceberg: thousands of less high-profile charities are shedding jobs and cutting back services, considering mergers, or in some cases shutting their doors. The prime minister paid tribute last week to the “incredible work of charities” but much of that work exists on fragile ground. This is just the most visible tip of the iceberg. Thousands of lower-profile charities are shedding jobs and cutting back services, considering mergers, or in some cases shutting their doors. The prime minister paid tribute last week to the “incredible work of charities” but much of that work is on fragile ground.
At the root of the crisis in the voluntary sector is what commentators call a “perfect storm” – a brutal confluence of negative economic and social factors. A decade of austerity cuts merged into the pandemic, followed rapidly by the still lingering cost of living crisis with its high inflation and soaring energy prices. At the root of the crisis in the voluntary sector is what commentators call a “perfect storm”, a brutal confluence of negative economic and social factors. A decade of austerity cuts merged in the pandemic, followed rapidly by the still lingering cost of living crisis with its high inflation and soaring energy prices.
Demand rose for charities as a result – in simple terms, there were vastly more people coming to them for help whether for a food parcel, a hostel bed for the night or to get mental health advice and therapy. At the same time income has shrunk: state funding has fallen away, donations have flatlined, and national insurance bills rocketed. Demand rose for charities as a result. In simple terms, there were vastly more people coming to them for help, whether for a food parcel, a hostel bed for the night or to get mental health advice and therapy. At the same time income has shrunk: state funding has fallen away, donations have flatlined, and national insurance bills rocketed.
Even Macmillan, with one of the slickest fundraising machines in the business, raising over £230m a year, could not keep up with demand. For several years it rode out the crisis by drawing down tens of millions of pounds a year from reserves to fix the holes in its balance sheet – a practice it has now declared unsustainable. Even Macmillan, with one of the slickest fundraising machines in the business, raising more than £230m a year, could not keep up with demand. For several years it rode out the crisis by drawing down tens of millions of pounds a year from reserves to fix the holes in its balance sheet, a practice it has now declared unsustainable.
Samaritans is tight lipped about the cash savings it wants to make but its published accounts show that spending has exceeded income for each of the last three years and it has struggled to bring costs down. At the same time, its income from state-funded grants and contracts, and from its charitable activities, has fallen. Samaritans is tight-lipped about the cash savings it wants to make but its published accounts show that spending has exceeded income for each of the last three years and it has struggled to bring costs down. At the same time, its income from state-funded grants and contracts, and from its charitable activities, has fallen.
A conventional business might see rationalising the charity’s 201 branches across the UK and Ireland as a no-brainer. Lower overheads, and perhaps a windfall from asset sales. Couple this with the rise in mobile technology and AI – with more people working from home since the Covid pandemic – and why keep all this costly bricks and mortar? A conventional business might see rationalising the charity’s 201 branches across the UK and Ireland as a no-brainer. Lower overheads, and perhaps a windfall from asset sales. Couple this with the rise in mobile technology and AI – with more people working from home since the Covid crisis – and why keep all this costly bricks and mortar?
Charities are not conventional businesses, however: Samaritans is largely run by passionate volunteers, their focus often hyper-local, immersed in community cameraderie, support networks and face-to-face relationships. The prospect of speaking to suicidal callers in remote call centres or at home appalls. Charities are not conventional businesses, however. Samaritans is largely run by passionate volunteers, their focus often hyperlocal, immersed in community camaraderie, support networks and face-to-face relationships. The prospect of speaking to suicidal callers in remote call centres or at home appals.
As one Samaritans volunteer who contacted the Guardian put it: “It’s a funny organisation, like a cross between an emergency service and the WI [women’s institute): life and death and ginger biscuits.” As one Samaritans volunteer who contacted the Guardian put it: “It’s a funny organisation, like a cross between an emergency service and the WI [women’s institute]: life and death and ginger biscuits.”
Volunteers were understandably upset, they added: “If you run a service which callers use because they’re dying of lack of human contact, closing and automating it seems a little odd.”Volunteers were understandably upset, they added: “If you run a service which callers use because they’re dying of lack of human contact, closing and automating it seems a little odd.”
In this environment staff and volunteerscan feel abandoned by what they see as the out-of-touch corporate centres of large charities. Ire is directed against big managerial salaries, expensive rebrands, fancy HQs, and a spreadsheet culture perceived to be out of step with core charity values. In this environment staff and volunteers can feel abandoned by what they see as the out-of-touch corporate centres of large charities. Ire is directed against big managerial salaries, expensive rebrands, fancy HQs and a spreadsheet culture perceived to be out of step with core charity values.
In charity boardrooms, the harsh reality is expenditure cannot exceed income for too long. Charities continue to be overwhelmed by overflow of demand from decaying public services and rising poverty. As ever, the people most at risk are charities’ beneficiaries: the poor and desperate relying on charity to survive. In charity boardrooms, the harsh reality is that expenditure cannot exceed income for too long. Charities continue to be overwhelmed by overflow of demand from decaying public services and rising poverty. As ever, the people most at risk are charities’ beneficiaries: the poor and desperate relying on charity to survive.