The impact of Brexit on the charity and not-for-profit sector

Charities have had to adjust to a lot of disruption this year, but they can’t afford to ignore the next big change – the end of the transition period.

Charities and not-for-profit organisations have had to adjust to a lot of disruption this year, with COVID-19 restrictions making usual operations, fundraising and business activities harder than ever.

But charity leaders can’t afford to ignore the next big change on the horizon – the end of the 2020 transition period following the UK’s exit from the EU.

Some details remain uncertain even as we near the end of the year, but there are steps organisations can take to prepare for any impacts on their workforce, data, funding and more.

Staff and volunteers

The UK’s new immigration system went live on 1 December 2020, with applications open to work in the UK from 1 January 2021.

With free movement between the UK and EU coming to an end, candidates from the EU will need to meet stricter requirements including skill levels, salary requirements, and English language fluency standards in order to qualify for a ‘skilled worker’ visa.

The number of EU workers in the UK charity sector has grown rapidly in the past couple of decades, with a report from the Institute for Public Policy Research (IPPR) in 2018 saying it had more than doubled from 14,000 to 31,000 since 2000.

Those workers tend to be more highly qualified on average than UK workers in the charity sector, with three quarters educated to age 21 or above, compared to 37% UK nationals, and are more likely to be in jobs with higher pay and skill levels.

That’s a slightly different picture to the UK workforce as a whole, in which EU nationals tend to be highly qualified but working in lower-skilled, lower-paid positions.

That doesn’t mean the charity sector workforce will be unaffected by the upcoming changes to immigration, however. According to the IPPR’s analysis, around 82% of EU employees in the sector would not be eligible to work in the UK under the new rules.

That means charities can expect a significant reduction in available job candidates from EU countries, and may need to plan for any recruitment gaps that leaves them with.

Possible alternative strategies include focusing on staff retention and training, or recruiting from other groups. And while charities don’t tend to have as much scope for automation as other sectors, you may be able to find technological solutions to streamline some of your processes.

Meanwhile, volunteers from EU countries will need to apply for tier 5 (charity) visas through a registered volunteering provider. So far, there’s no guarantee that British organisations will still be able to continue their participation in programmes like the European Voluntary Service, which offers volunteering placements for 18 to 30 year olds.

Personal data

Charities often hold sensitive data about their beneficiaries, donors, employees, volunteers and so on, so data protection will be a priority for many charity leaders.

The General Data Protection Regulation, or GDPR, which came into force in 2018 was a part of EU law, but the Government has confirmed that this will be retained in UK law. Charities should continue to comply with GDPR after the end of the transition period.

There shouldn’t be any changes to the way you send personal data to the EU or EEA, but receiving data from those countries could be a bit more difficult. The EU is currently carrying out an adequacy assessment of the UK’s data protection regime and has yet to confirm its decision.

In case the UK’s system is not deemed adequate, charities that receive information from the EU or EEA should prepare an alternative method for transferring data – you can find more detailed information on the Information Commissioner’s Office website.

Funding and finance

According to charity support organisation the Directory of Social Change, EU funding streams and institutions currently provide charities with around £258 million a year. The Government is planning to replace various sources of EU funding with a ‘shared prosperity fund’, however, with more information expected to be published early next year.

If you’ve already been awarded EU funding, you’ll still be able to get this after the end of the transition period. There are also some EU funding schemes that are still available for applications from UK organisations – you can find a full list here.

Finally, we’d recommend thoroughly assessing your charity or non-profit’s financial position ahead of next year, taking into account the continued disruption caused by the pandemic as well as any effects of Brexit.

While you can’t control or predict wider political changes, you can make sure your organisation is resilient and prepared for the next challenge that comes its way.

Get in touch to talk about preparing your not-for-profit organisation for 2021.

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