Of course the big news at the moment is the EU referendum, the outcome of which has left many reeling and wondering “what does Brexit mean for charities”? what the sector can expect and how we’ll deal with the implications of what many see as a drastic, unnecessary and ill-informed decision.

It’s very early days (at the time of writing, less than a week has passed) but the rallying cry seems to be that as a sector we have dealt with some ‘difficult times’ so we will be able to ride this storm. As the practical and financial implications will take time to unfold (MP’s are resigning, the pound is falling in value) what is already evident is that racial and class tensions are high and this is where heads of the sector have focused first.

Sir Stuart Etherington, chief executive of the NCVO, wrote in a blog:

“The referendum has thrown into sharper contrast than ever previously a division in the United Kingdom. Questions of social mobility will rightly now come to the fore again. And we can hope that the racial tensions stoked so crudely and cruelly during the campaigning do not linger, but the risk of this is clear. We must now play our role in healing these divisions. We can and must help people in the communities we work with to understand, respect and cherish each other.”

His views were echoed by Neil Cleevely of Navca who said:

“The ability of local charities and community groups to bring together people from different backgrounds and experiences for the common good is more vital than ever. I am sure that our members will do what they always do and unite people to tackle the economic and social consequences.” (reported in Third Sector)

As the third sector is already struggling to defend its value to the public and rebuild trust after the events of last year, we find ourselves looking for answers about who is going to represent us and what impact this will have upon our organisations and those we seek to support.

On the day the results were announced, the CEO of ACEVO, Asheem Singh published an open letter to the Prime Minister calling for a commission to ensure that the harmful impacts of Brexit on the most vulnerable are mitigated. In an interview with Third Sector magazine he said;

“Without urgent reform, Brexit will prefigure convert cuts to community funding, it is time for immediate talks between third sector leaders and the government to ensure this shortfall does not result in immediate and real harm, and to create road map to reform of social protection legislation.”

There is an ominous silence about the impact that Brexit will have on funding. In addition to the lost potential of billions of pounds of funding that we are no longer eligible to apply for, we can reasonably assume that a recession is now a strong possibility. Economic uncertainty and insecurity will likely lead to a recession which will have a wider impact on funding for the voluntary sector.

Reduced returns on investments (or concerns that this is a possibility) will lead to a reduction in expenditure by grant-making trusts and foundations and public finances will be further stretched, leading to more severe funding cuts. Add to this increased unemployment and a fall in the average wage – which could lead to a reduction in charitable giving and increased demand for charitable services – it looks like we are in for some very challenging times.

NCVO have arranged a free webinar, EU Referendum and Implication for the sector, on Thursday the 7th July (sign up here).

*UPDATE* on Wednesday the 28th June NCVO published this Policy Paper which includes the early anaysis that “It is likely that the impact of Brexit in the short term will be over-estimated; but impact in the long-term will be under-estimated” it also calls for  the third sector to consider how we “offer solutions for our own democracy – how to better engage the public, give voice to those less often heard, and ensure politicians and institutions are accountable.