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Third Sector Index Q2 2017

Charities Hit by Political Impasse

The political impasse has been hitting third sector organisations hard, a new report suggests.

The Ulster Bank & CO3 3rd Sector Index points to a near-doubling in the number of charities reporting a reduction in their government funding – from 17% last quarter to 32% now.

And most leaders (76%) of third sector organisations state that the lack of an Executive has had a negative impact on their organisation.

Charities’ finances appear to be under more pressure this quarter too – with an increasing number of leaders in the sector saying that their organisation is experiencing cash flow issues.

The percentage was up from 28% last quarter to 31% now.

The Ulster Bank & CO3 3rd Sector Index is a barometer of Northern Ireland’s third sector, involving a quarterly survey of CO3 members who include the leaders of some of Northern Ireland’s largest charities and social enterprises through to small community groups.

The survey is carried out by Perceptive Insight, based on a survey of almost 150 leaders of third sector organisations.

Looking ahead 65% of third sector leaders believe that political stability in Northern Ireland will worsen over the next year, with 16% believing that it will improve.

Third sector organisations have though become less pessimistic about the political outlook, with 59% believing that the outlook will worsen in the 12 months ahead, compared to 71% who believe this in Q1.

Commenting, Ulster Bank Chief Economist, NI, Richard Ramsey, said: “The latest index is a strong indication of the extent of the challenge the current political impasse is presenting for organisations in Northern Ireland’s third sector, who provide a wide range of important services, from care provision to skills development. We’ve already heard from business organisations in recent days about the impact the lack of a budget is having on the private sector, and third sector bodies are perhaps even more on the frontline. An Executive in place to agree a budget is one important part of the jigsaw for the economy, and the recently announced extra funding from Westminster will no doubt be helpful. But we also need to see timely and effective delivery across government including in areas such as planning, procurement and public services at large.”

Nora Smith, Chief Executive of CO3 said: “In addition to the cuts in funding that members have reported this quarter, the financial uncertainty due to a lack of NI budget makes the current operating environment extremely challenging.  Yet 62% of our members reported an increase in demand for their services this quarter.

“Just under a third of respondents highlighted that the lack of an Assembly has had a large negative impact on their organisations.  Indecision, uncertainty and the instability that the current political vacuum has caused is impacting on morale across the sector. The piecemeal approach to funding raises vulnerabilities on the cashflow situation of charities too.  This quarter’s results show we have seen an increase in the number of charities stating that their cashflow is very unstable.  It is important that we place the findings into a wider context.  Many of our members are supporting people in positions of vulnerability”.



Click to view the full Ulster Bank & CO3 3rd Sector Index.

Click to download the 3rd Sector Index Infographic.