The Cost of Living Crisis: with Angela Kail (NPC)

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In this episode Rhodri is joined by Angela Kail (Director of Consulting at New Philanthropy Capital (NPC)) to take a look at the growing cost of living crisis in the UK (and beyond), and what means for philanthropy, grantmaking and the work of civil society organisations. Including:

Impact on charity finances

• What will the impact of inflation be when it comes increasing costs (e.g. staff costs, energy, food, building materials, leisure equipment etc)?
• What impact will inflation have on decreasing the value of reserves or longer-term contracts/grants?
•  Will any of the govt measures announced so far (e.g. capping energy bills) help charities? Are they enough? 
• What will the impact of rising interest rates be on charities?  Will any of the govt measures announced so far (E.g. capping energy bills) help charities? Are they enough?
• Is charities’ ability to fundraise going to be affected?

Increased demand for services

• Where are we going to see the most acute demand for services in coming months?
  • Direct support for those in poverty (e.g. food banks, warm spaces)
  • Advice and help (e.g. CAB, specialist advice for those dealing with major illness, disability etc)
  • Indirect effects (mental health, physical health, domestic violence etc)

Impact on everyday giving

• Will we see fewer people giving, or the same people giving less?
• Is there a danger that levels of donations remains stable, but their value decreases in real terms as inflation rises? Does this mean we actually need to encourage more giving? And does this present a major challenge in the current economic climate?

Impact on HNW philanthropy

• Should we expect any direct impact of the cost of living crisis on HNW giving? If so, is it likely to go up, or down?
•  Is there potential for philanthropy to play a role in helping charities survive the cost of living crisis?
• What are the dangers of seeing philanthropy as a potential solution here? (e.g. is there a risk of validating policy decisions, or hiding the true impact of cuts?)
• What are the practical challenges? (e.g. Lack of knowledge/experience of HNW fundraising, unequal distribution of donors around UK, increased competition for fundraising)

Impact on grantmaking

• What impact will inflation/interest rates etc have on grantmakers?
• Could funders be spending more from their endowments?
• Should funders add inflationary top-ups to existing gifts/grants?
• Would it help if funder simplified grantmaking processes?
• Why is unrestricted funding so importan? 
• How can funders use data (from NPC, 360 Giving etc) to help ensure grantmaking is targeted at areas of greatest need?

Related Links:

• NPC's Confronting the Cost of Living Resource Hub
• NPC's annual conference NPC Ignites 2022
• NPC's Local Needs Databank
• Pro Bono Economics/CAF briefing on inflation and charities
• CAF polling on public intentions to reduce charitable giving
• FT article, "Charities underpin the UK’s social safety net as cost of living crisis bites"