Pressure is mounting for small and local charities as they face long term problems worsened by the pandemic

New analysis from Lloyds Bank Foundation for England and Wales, Small charities responding to COVID-19: summer 2021 update, shows how small and local charities are continuing to adapt rapidly to the changing needs of the communities they serve, their staff and volunteers. All while battling their own challenges, from rising complexity of services, insecure funding, and staff burnout.


The report, published today, captures the views of 401 charities the Foundation supports and is compiled from the annual monitoring reports completed between November 2020 and May 2021. These charities have been working in communities delivering frontline specialist services to help people overcome complex social issues like domestic abuse, mental health and homelessness.


These charities supported people experiencing poverty and prevented them from being pushed into greater hardships. Yet many of them fear the ending of furlough, the forthcoming cut to universal credit, and increased evictions and unemployment will deepen inequalities, particularly on people where complex social issues and other inequalities collide.


The report finds that while emergency funding ensured that many charities could adapt to continue to support people, many now face an uncertain future. The short-term funding prevalent in 2020 is making it difficult for charities to address the long-term problems made worse by the pandemic.


Azalea is a small charity supported by the foundation that works with women caught in sexual exploitation and poverty. Since the first national lockdown, Azalea have seen an increase in the number of women turning to them for help and the level of support they need.


Ruth Robb, CEO of Azalea said: “Our Covid world has ushered in a challenging economic perspective and yet Azalea has never been so needed. It is projected that living with COVID in our communities means the increase of violence to those trapped in sex trafficking will become a permanent alteration.


“There are more women who need more than just crisis support including one to one help and more intensive support at the end of their journey with skills to equip them to become independent. We have established therapeutic art group sessions and are trying to set up employability skills training but this has a big cost both financially and in terms of staff hours. Recognition that the problems caused in the first Lockdown are still with us and, if anything worse and we are now in a worse position financially as we try to meet the increased need.”


These funding obstacles and the increased demand of the pandemic has presented unique challenges with recruitment and retention of staff. Charities have needed to increase their workforce to cope with rising demand, but as short-term funding comes to an end, so do staff contracts, causing great uncertainty on how charities will continue to meet the needs of the people they support.


Staff and volunteers within small charities have demonstrated resilience over the last year but the pandemic has had a significant impact on their mental health and wellbeing and risk burnout. Some charities have also been finding recruitment challenging over the last year which has contributed to the pressure on existing staff in sustaining high levels of demand on their services.


Paul Streets, Chief Executive of Lloyds Bank Foundation for England and Wales said: “The crisis has exacerbated existing inequalities and deeply impacted our communities, the effects of which will be felt for years to come. Small and local charities, which by design are rooted within their communities, have been vital to the humanitarian response.


“They showed up and stuck around throughout the pandemic in ways that others couldn’t, didn’t and wouldn’t. They also face insurmountable challenges. Alongside the rising demand and complexity for their services and the wellbeing of their staff and volunteers, they are seeing great fluxes in their income. The short term funding which helped them keep their doors open last year cannot adequately solve the long term problems we face as a direct result of the pandemic. If we are to recover from this crisis we need to support small charities to survive and thrive.”


Drawing on this evidence, Lloyds Bank Foundation for England and Wales is calling on funders, local and national government and organisations that partner with or rely on services delivered by small and local charities to:

  • Provide longer-term unrestricted funding rooted in trust
  • Invest in organisational resilience and staff wellbeing
  • Sustain and build on partnerships formed during the crisis
  • Build a robust welfare safety net to meet the needs of people
  • Suitably resource public services, particularly local government funding
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