Charities to bear the brunt of Brexit

Brexit, whatever its eventual form, will have a significant impact on community and voluntary organisations, charities and social enterprises. Currency fluctuations, disruption of cross-border activities, loss of funding due to economic fallout, and loss of collaboration opportunities with UK charities are just a few of the challenges facing Irish charities in the coming months and years.

“The important point to note is that Brexit, whatever the outcome, will have as significant an impact on community and voluntary organisations, charities and social enterprises as it will on businesses generally across the island of Ireland,” says Ivan Cooper of charities representative organisation The Wheel.

The Wheel carried out a survey at the beginning of the year which found that 54 per cent of members believed Brexit will have a direct impact on their work. Areas of concern include potential changes around import and export processes and documentation and how it will affect supplies, delays in ports affecting goods, the continued availability of services from the UK, and potential new data management, insurance and financial services requirements.

For many community and voluntary organisations that operate with limited budgets and resources, preparing for Brexit, with all the uncertainty that surrounds it, represents a significant challenge

Sentiment among UK charities is even more downbeat, according to research for the Charity Landscape 2019 report carried out by the UK Charities Aid Foundation. The research found that 63 per cent of UK charities believe Brexit will have a negative impact on their work. Nearly a quarter (23 per cent) said the EU withdrawal process had already had a negative impact. Some 37 per cent expressed the belief that there would be a decrease in donations as a result of the UK’s withdrawal from the EU.

“Organisations across Ireland have been preparing for Brexit,” says Cooper. “But for many community and voluntary organisations that operate with limited budgets and resources, preparing for Brexit, with all the uncertainty that surrounds it, represents a significant challenge. Brexit risks producing outcomes that may impact many organisations that support the most vulnerable people in society. Charities will also be at the coalface in responding to the needs of communities adversely affected by Brexit and need to prepare for that.”

A cloud on everyone’s horizon

It’s a question of balance for Barnardos. “Brexit is a cloud on everyone’s horizon and the charity sector is no different,” says director of fundraising Mary Gamble. “We are torn between spending too much time on it when no one knows what’s going to happen and not doing enough. We are doing practical things like making sure that staff are aware of day-to-day issues like driving licences and so on.”

The effect on income streams is uppermost in her mind. “As director of fundraising, I am aware of the impact it could have on the economy,” she says. “If it hits people’s disposable income it will impact on the amount they are able to donate to charity. We understand that people have to look after themselves and their families first. We are ensuring that we have as many different income streams as possible. That is as much preparation as we can make in that regard at the moment.”

Disruption to collaboration with UK charities on EU-funded programmes is a major cause for concern for The Wheel. The organisation welcomed the reassurances given last year by the two governments in relation to the continuation of the Interreg and PEACE cross-border programmes. Significant uncertainty remains around the long-term future of other similar programmes, however.

All-island charities may also have to contend with further regulatory requirements, which would add further costs and overheads to already stretched resources.

In common with many other sectors, Irish charities have been somewhat over-reliant on UK partners up until now

The Wheel has described Brexit as a “potential everyday disaster” for community-led organisations located near the border if people are prevented from crossing the border and engaging in activities together.

The departure of the UK from the EU will also mean that UK charities are no longer eligible to apply for EU funding. This will have quite a severe knock-on effect for Irish charities as that funding is normally only available to projects run by consortiums of organisations from different member states. Charities in Britain and Ireland have been natural partners in such consortiums for decades as they share a common language and legal system.

Irish charities will have to bear the additional costs in time and money of finding partners in other member states. This will almost inevitably result in a decrease in funds coming to Ireland from these programmes and that in turn could mean reduced services to communities and individuals.

“Irish charities also need to reach out and collaborate more with European partners who are aligned with their aims and vision,” says Cooper. “They won’t have UK partners in future. In common with many other sectors, Irish charities have been somewhat over-reliant on UK partners up until now.”

Other risks

Law firm Mason Hayes & Curran has pointed to other risks to Irish charities arising from Brexit, including fluctuations in sources of income and funding. According to the firm, a possible consequence of Brexit could be a reduction of average disposable income in Ireland, and as a result there may be a reduction in the level of charitable donations. As well as that, Government funding priorities may change as a result of the response to any fallout from Brexit. Additionally, Irish charities which have suppliers based in the UK may experience disruption in these supply chains and may experience difficulties due to currency fluctuations.

It’s not all bad news, however, and the firm advises Irish charities to be aware of the opportunities that may arise for them following Brexit. Ironically, one possible opportunity may be that more funding opportunities could become available from the EU if organisations based in the UK are no longer in receipt those funds. Of course, we have yet to see what the impact of the loss of the UK’s contribution to the EU budget will have on overall funding availability.

The other opportunity could arise through UK charities setting up offices in the Republic of Ireland in order to remain eligible for EU funding. This may open up the potential for Irish charities to enter into mutually beneficial cooperation and collaboration agreements with these organisations.