Summary from our CEO
Understanding need of those we serve
2018 witnessed a particularly ground-breaking piece of work for this charity in the completion of its ‘Need’ report which had pan-Naval charity sector input and support and is summarised in the RNRMC Group Annual Report and Accounts. We are using this work to guide and structure our thinking and development and, in particular, to aid us in our choices of partners, our allocation of grants and investments in services for our beneficiaries, and our overall prioritisation of desired outcomes.
But let me start with the landscape in which we find ourselves. The overall military charity sector, including the naval sector, is witnessing an increasing demand for its services. Part of this stems from the age profile of beneficiaries, but it is also extremely likely that a decade of austerity in Government and Local Services and possibly the ramifications of Universal Credit, are contributing to this picture, especially with families and children. At the same time we are aware of the increasing costs of delivering services, partly around governance and regulatory systems and processes, but also in staffing costs notably where agency staff are being used to backfill permanent staff in the care area. We also have a growing concern that the number of caseworkers, so vital to making sure beneficiaries are properly identified and appropriately supported is decreasing, and we worry that this might be a significant issue in the not too distant future.
At the same time we believe the sector is experiencing the initial effects of the cessation of the LIBOR programme which has pumped almost £1bn into the charity sector over the last few years – with the bulk of that money going into the military charity sector. This will very likely increase the competition for other sources of funding and probably lead to greater expectations of reliance on charities such as the RNRMC at a time when many charities are reporting that voluntary income is at best flat and possibly declining. The reasons for this view of voluntary income are many and varied but significant are the peacetime profile of the military and the sector-wide experience of a reduction in individual regular giving where acquisition costs can now often outstrip returns.
“…greater reliance on charities such as the RNRMC at a time are reporting that voluntary income is at best flat and possibly declining.”
We must also take into account the general state and reputation of the Third Sector with the general public. The various scandals that have rocked the sector recently have undermined public confidence and this will
take significant effort and time to restore. On top of this we need to be cognisant that the sector has yet to witness its significant ‘disruption’ moment as graphically demonstrated in other areas of everyday life such as our high streets, film production, taxis and home-delivered restaurant meals due largely to the dominance of the likes of Amazon, Netflix, Uber and Deliveroo.
This all has considerable significance for RNRMC and will very likely effect how we operate and how we support beneficiaries. There are a number of competing issues that will need to be balanced carefully. First, if the level of support beneficiaries need is rising, then, in the absence of LIBOR, we will likely need to drawdown on reserves in the first instance. For every £1m drawdown the charity loses circa £30k/annum of investment income. Replacing this from voluntary sources requires more investment in fundraising and this will take time to be realised, especially in the present, very competitive fundraising environment, which will probably drive a continued requirement to lean on reserves and hence reduce still further valuable investment income.
At the same time we need to consider the charity’s footprint. The charity has been sensibly anchored in Portsmouth for a long time with regional cover being provided from that office. The charity has reached a point where it needs to have a more permanent presence in the North and the South West so that we may better support beneficiaries. Equally, we need a degree of agility to deal with the challenges I mention above and especially any potential disruption in the sector. This will likely require us to structure and operate somewhat differently but should also open other opportunities.
“I see a huge desire on the part of charities in the naval sector to work together more closely… and the openness to challenge accepted norms.”
And it is to opportunities that I must now turn. I see a huge desire on the part of charities in the naval sector to work together more closely and to cooperate and collaborate wherever it makes sense for our mutual beneficiaries. I see this enthusiasm and interest equally to the fore in service delivery partners with a noticeable commitment to innovative thinking and the openness to challenge accepted norms. We are also witnessing a focus in Whitehall, especially MOD and NHS and Social Care, on our veterans and this is matched by an increasing interest and commitment from within the Naval Service as well.
So, whilst the challenges do worry me, and we need to plan now to ensure the greatest chances of success, my optimism that we will achieve stems from all I see in our opportunities. All I ask is that as you read and digest this report you take the time to consider all we do and how you might support us if so moved to do. I look forward to hearing from you!