Ongoing challenges in recruiting and retaining staff, the cost-of-living crisis, a lack of progress to end inequality in the sector and adapting to political and regulatory change, will dominate charity leaders agenda in 2023, a report is warning.

The list of priorities has emerged in the NCVO’s annual Road Ahead report, which details action plans for charities to tackle over the next 12 months.

Here we outline what charities can do to tackle each these key challenges for the year ahead highlighted by the charity infrastructure body.

Equality, diversity and inclusion

The NCVO warns that “action on equity cannot be put to one side” as “equity, diversity and
inclusion (EDI) remains a challenge for many organisations and communities”.

Despite recent efforts by charity organisations to uncover and seek to tackle racism within their own ranks, including the NCVO itself, Macmillan, Amnesty International UK, Barnardo’s and Wellcome, the sector still has a long way to go on this issue, according to latest evidence.

MPs last year warned that racism is “particularly pertinent” in the aid sector, due to its roots in colonialism. The NCVO’s Civil Society Almanac last year found that the charity sector is “less ethnically diverse than the private and public sectors" and action to improve diversity has stalled in recent years.

Change is particularly needed at the top. Just 7% of charity leaders are from Black Asian or minority ethnic backgrounds, according to last year’s pay and equalities survey by ACEVO. This proportion has remained static in recent years.

The Road Ahead report highlights the importance of data collection to “enrich” charities’ understanding of inequality and point to its guidance on how charities can create robust EDI practices.

Importantly, charities need to ensure that the data they collect in EDI is creating meaningful change. “Remember: data is only helpful if we act on it”, says the NCVO.

Another EDI priority for charities in 2023 is to reach a diverse audience, through social media such as TikTok and Youtube rather than focusing on mainstream media. Charities need to ask themselves whether their approach to social media needs to change.

Cost of living

The cost-of-living crisis will understandably dominate the running of charities this year.

Despite inflation and fuel costs set to fall later in 2023, charities face “a tough year ahead” and the cost of running charities to rise, due to less public sector income and increased demand from service users, the NCVO warns.

📣 The #RoadAhead 2023 has arrived to help inform your charity’s decisions over the next year.

Check out our new financial insights that might have you reconsidering how you manage your funds 👉 https://t.co/CiGlIRnSMs pic.twitter.com/1KD8NGq0kn

— NCVO (@NCVO) January 25, 2023

Charities are being urged to ensure their budgets are realistic and consider rising costs and demand. Charity leaders need to be especially watchful of “any risk of insolvency” and whether the organisation can meet immediate costs such as leases and staff payments.

Those in financial peril need to consider action such as merging with similar charities or even closing, the NCVO says.

Recruitment and retention

Financial turmoil adds to existing recruitment and retention challenges, with staff trustees and volunteers increasingly “feeling crises fatigue”.

The NCVO urges charities to prioritise flexible working arrangements and support for staff’s wellbeing this year to ensure it can avert burnout and attract and keep workers and volunteers, many of whom will feel emotionally shattered by Covid crisis and now the cost of living crisis.

Recent evidence from the Chartered Institute of Personnel and Development found that more than half (56%) of charities are struggling to fill vacancies, more than other sectors, where 46% face similar challenges, the NCVO repport points out.

Charities in 2023 need to ensure they are considering their lowest paid staff when setting pay budgets to support them through the cost-of-living crisis, it adds.

Embedding flexible and remote working options is also important to keeping staff and helping their work/life balance. Supporting volunteers’ wellbeing is also vital, with charities urged to “look for ways to show you value them”, says the Road Ahead report.

Political upheaval

Within the last 12 months there have been four Chancellors of the Exchequer, three Prime Ministers and several other senior changes across Cabinet. It’s been a lot for charities to take in as they look to lobby politicians on issues to benefit their service users and causes.

In addition, there’s a general election on the horizon, which presents opportunities for charities to engage with politicians “looking for new ideas”, according to the NCVO.

Charities are advised to review their lobbying and find out which of their supporters in parliament plan to stand again at the next general election, or plan to retire or leave national politics. With the Labour Party showing a sustained lead in opinion polls charities are being called on to ensure they are engaging with shadow ministers and their teams.

Another concern around lobbying in 2023 is how the public order bill will impact on charities when it becomes law this year. This will include new offences for public protests. Several charity sector organisations have already spoken out about this legislation and its impact on people’s right to be heard.

Regulatory change

A raft of regulatory and legal changes to impact on charities are taking place. Charity leaders need to be aware of how their operations need to change in 2023 to ensure they are compliant.

Last April’s Butler Sloss case which confirmed trustees have discretion to exclude investments, such as in fossil fuels, even if it is not the best financial decision. This allows trustees to ensure their charities can align their investments and ensure they don’t conflict with their charitable purpose, says the NCVO It urges charities to keep an eye on Charity Commission guidance later this year on how this legal judgement impacts on their investments.

Charity leaders also need to be aware of forthcoming legislation, through the Worker Protection Bill, to create new duties on employers to ensure third parties do not harass their staff. This planned law includes ensuring employers take “all reasonable steps to prevent sexual harassment of their employees. Third parties for charities can include service users and volunteers. Charities need to ensure they have robust processes in place to prevent sexual harassment in the workplace.

Further changes include mooted data protection laws, which will impact charities, although the time frame for this legislation is currently not known.

Safety of those taking part in charities’ online discussion forums is another area that may to be strengthened in 2023 as the Online Safety Bill continues to move through the parliamentary process.

Charities also need to be aware that their duty to protect participations at events has been strengthened by the Protect Duty, also known as Martyn’s Law, named after Martyn Hett, who died in 2017’s Manchester Arena terrorist atrocity.

Changes are also set to come into force in how government procures goods and services through the Procurement Bill, which is set to alter how public services commission and offer contracts to charities.

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