What might Brexit mean for the charity sector?

I will first apologise for another Brexit post, it’s probably the last thing anybody wants to read after months of speculation surrounding what will happen. The truth is that we still don’t really have much of an idea in a lot of sectors. However, discussions need to be had and awareness raised, especially in a sector that may have been overlooked and less discussed in the debates: charities.

In September 2018, the Charity Finance Group says Brexit “will be bad for both charities and their beneficiaries”. A “clean” Brexit would see the UK leave the single market and customs union posing less of a risk because the government would have some more options to reform tax rules in the sector. However, since these Brexit discussions have taken a turn from clean to messy and more likely a hard Brexit, prompting the report from CFG to conclude that it is “exposing the sector to potential harm.”

EU institutions do fund directly a number of charities, and without a deal to continue this, charities would have to potentially reduce their services. Even those who are not directly funded by the EU may be affected because they are linked to the funding in some way. Charities have built partnerships with EU organisations, which now have to be questioned and asked whether they will continue to function.

The charity sector can never be immune to economic change, as donations essentially come from profit and income of other people and businesses. At the end of 2017, the Directory of Social Change suggested 250 million pounds worth of funding could potentially be lost.  However, the impact will undoubtedly be more than a financial one, as a vast number of workers in this sector are EU nationals, and these consequences are harder to resolve.

The NCVO has reported that 4.5% of the charity sector workforce are EU nationals, and it may be the case as in other sectors like the NHS and agriculture, that these workers might start looking elsewhere for more stability while there is still so much uncertainty. However, a strong counter-argument to this is shown in the figures, as unlike other sectors, the majority of the third sector is still filled by majority British Citizens, so this is likely to be one of the least impactful areas.

One of the most interesting or concerning (depending on the way you view it), is the legal implications which Brexit could have on the workings of this sector. A move away from the European Court of Human Rights and potentially towards a speculated “British Bill of Rights”. This is something we are not talking about enough. With the prospect of a “no-deal” Brexit looming even larger, the UK has continued to promise that EU citizens will by no means be turfed out or lose their rights here, but the lack of clarity is still worrying.

Fortunately, even without a deal, the UK has drawn legislation that will incorporate most EU laws on the 29th March, such as protection against discrimination and workers’ rights. However, discarding the EU charter for fundamental rights, means that if desired, the government could look to pass laws which could weaken current rights below the standard of EU laws. Consequently, this could impact the charity sector and even public services such as social care.

At the end of the day, charities survive off donations and need income to carry out their work. They will be asking and wanting to know the answers now. In April 2017, a CAF annual report stated that “Brexit has had no effect on donations to the charity sector in post- referendum Britain, but more people are getting involved in protests and campaigns”. They posed the question if perhaps people are becoming more charitable as a cause of the turmoil we are finding ourselves in.

However, are there any positives to charities from Brexit? One positive is on the horizon: new rules and freedom to improve the current charity situation. If a deal finally does pass, changes to tax could really benefit some charities. Cutting some of this red tape would mean improvements could be made in some areas, but the deal is looking far off, and so this hope does not have much to stand on at the moment.

It will depend from charity to charity what the impact of Brexit, and particularly a ‘no-deal’ Brexit, will be, but most have been warned to come up with contingency plans, and keep aware of changes in human rights or environmental legislation which could still change.

In October 2018, David Timms, head of political affairs at Friends of the Earth, warned that the more panic heading into Brexit, “the less chance there is that charity voices will be heard”. However, Brexit after all was a vote for change, and we need to use this change positively. What kind of country do we want to build and how can we make it the best for everybody living here? The voluntary and charity sector has a responsibility to unite communities in times of such uncertainty by reaching out and helping others.

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