The House of Lords committee on charities has warned that charities face a £200m funding gap following Brexit.

UK charities receive around £200m from the EU every year (see the Stronger Charities for a Stronger Society report). Most of this amount is contributed by the European Structural and Investment Funds (ESIF), and the European Social Fund (ESF).

The select committee has predicted that this will be a significant blow to the small charities hardest hit by the loss of crucial grants, but heavy cuts to medical research funding, and loss of international collaboration opportunities, have also been forecasted.

Rob Wilson MP, minister for Civil Society, told the committee that Brexit will have a wide-reaching impact on charities and the work that they do; potentially hampering many, and causing deep funding issues.

Wilson stressed that the concerns of charities should be listened to, and suggested that dialogue about the future be initiated.

On a positive note, Wilson argued that ending EU authority over UK law, and handing full sovereignty to Parliament, will be beneficial in the long term. While significant, the issue of charity funding is much smaller than many economic issues that need to be addressed.

The minister has been asked by the committee to present a full report on the likely financial implications for charities, at the end of the year. This will include the impact of the loss of funding for research collaborations.

The select committee on charities was appointed by the House of Lords on 25th May 2016. The purpose of the committee was to examine key issues in the third sector, and look at ways to deal with stumbling blocks in charity management. The final report, ‘Stronger charities for a stronger society’, has been presented by the committee. As part of the report, Chester Mojay-Sinclare, the founder and CEO of Charity Checkout, was asked to appear before the committee as a digital expert, to give input on digital charities, and the potential risks and opportunities.

The Importance of Digital Skills

Speaking to the select committee, Chester Mojay-Sinclare stated that charities lack digital skills, and that the issue should be urgently addressed. Helen Milner, CEO of the Good Things Foundation, also present at the session, quoted the Lloyds Bank UK Business Digital Index that said ‘49% of the charities are digitally immature with nothing in the name of skills, awareness, and confidence’.

Chester Mojay-Sinclare argued that without digital transformation across the whole third sector, there is a risk that small charities will become obsolete; and that charities should therefore beware of being too cautious when investing in digital skills.

Digital Trustees

To facilitate effective use of digital, Chester Mojay-Sinclare also pointed out that a new officer role –  ‘technology trustee’, or ‘digital trustee’ – should be appointed at every new charity. This would help charities in multiple ways, and have positive effects across the sector – including encouraging younger people to become trustees. Such a holistic approach could enable digital to be fundamental to every charity’s operation, and make digital transformation inevitable.

Charity Checkout’s role in Digital Transformation

Founded in 2011 by Chester Mojay-Sinclare, Charity Checkout is a social enterprise. Its sole mission is to help charities increase their funding through various digital channels. Charity Checkout now has a team 21 strong and growing, over 1200 charity clients, has helped charities raise over £12million in total, and has helped charities to increase online donations by as much as 600%.