On Thursday 23rd June the British people voted to exit the European Union. The following morning, as the result was announced and Prime Minister David Cameron resigned, we in Ireland began to analyse the potential impacts this decision will have on our economic progress. The fears of instability in trade between Ireland and the UK, which is worth an estimated at €1 billion a week, and the potential of this instability to cause ripple effects across the economy is of primary concern. Equally as worrying is possible changes to the border with Northern Ireland. What will be the impact on the Irish community and voluntary sector? Our European Programmes Coordinator, Deirdre Finlay, analyses...
The European Union now faces a crisis of its legitimacy, and its member states a crisis of their democracies, as the rise of populist movements of the political extremes is boosted. In the UK, the close referendum result has exposed clear divisions in society and some signs of intergenerational and racial conflict, exposing real disharmony at community level. Indications are that ‘immigration’ was a driver for the leave vote but now as the implications of Brexit become clear to many, levels of immigration will not necessarily be reduced, so people are left confused and divided.
Impact on the Irish Charity Sector
Ripples can already be felt amongst the Irish community and voluntary sector. With the adverse effect on trade, people’s income and ability to donate could be negatively impacted, which raises concerns for fundraisers. As Ireland’s largest support and representative body for the community and voluntary sector, representing 1,335 organisations nationally, here at The Wheel we are now left exploring the following questions: What are the potential impacts of Brexit on our members? Will Brexit affect their ability to generate income, roll out impactful programmes? Are we ready to robustly ride these impacts and find ways to protect our service users and beneficiaries?
Location, location, location
Immediately following the vote, falls in sterling and the UK stock exchange were temporarily relieved by the promise of an injection of finance from the Bank of England. But the economic forecast is for a likely recession in the UK and already firms are exploring opportunities to relocate or set up offices in EU member states. For British charities, perhaps there will be an opportunity for them to establish a base here in Ireland. For example, already one Northern Ireland-based charity which does extensive programming in the south is investigating the possibility of opening an office in Dublin. What we don’t know is if this will bring more competition for restricted and unrestricted funding in Ireland or alternatively, perhaps new British actors in the Irish charity sector will bring strength in new ideas, advocacy initiatives and programming.
Corporate Fundraising and Foreign Direct Investment (FDI)
For corporate fundraising, the effects of Brexit could be positive. The impacts on FDI here are yet to be uncovered. Optimists assert that Ireland now holds the position of the only English speaking member state and, considering our success in attracting US corporates to headquarter their EMEA operations, yet more FDI must be enticed here. Irish fundraisers will need to monitor and track these developments closely and identify new potential corporate partners if and when they arrive.
Individual and Major Giving
For Wheel members with considerable numbers of individual givers and large databases, creative donor retention strategies need to be urgently deployed as economic uncertainty takes hold and Irish people look to cut costs. Maintaining lasting relationships with donors, both regular and major, will be key to riding this period out. Brexit also means that UK charities are no longer under obligation to adopt Europe’s strict data protection rules. While this would put UK charities at an advantage over Ireland, the likelihood is that similar rules to the EU will be developed in the UK in order to create a level playing field. Given the increased regulation over fundraising in the UK in recent years, this is the most likely outcome.
Under EU laws, member states must give the same tax concessions on donations to a charity based in another EU country as it would to a domestic charity - a rule which faces an uncertain future with Britain leaving, with obvious implications for UK charities with Irish links. The situation at present is that the EU encourages cross border giving and as long as an organisation meets the requirements to be a registered charity in the jurisdiction where it resides, then it should be able to benefit from tax effective giving across Europe.
EU Structural Funds
An obvious direct hit to the UK charity sector will be an inability to access EU structural funds, should the UK government not establish alternative programmes or allow access to certain EU funding streams. For Ireland, this may present an opportunity as competition for grants is significantly reduced but, considering many Irish organisations accessing EU funding have British partners, this is damaging to transnational relations and potential knowledge sharing.
Programmes such as Erasmus+, Justice and Europe for Citizens have a clear transnational element and including British project partners has always been easy and beneficial for Irish NGOs and voluntary groups. With such similar administrative and legal systems and often similar social issues, Britain and Ireland make good project bedfellows, learning and growing together. Some of The Wheel’s better known members such as Barnardos, Oxfam and VSO were originally founded in the UK and have arguably brought experience and knowledge to Irish programme, fundraising and advocacy strategies over the years. It remains to be seen if their parent bodies in the UK seek to bolster presence in Ireland in order to access EU structural funds from here.
What of the implications for Northern Ireland, where EU funding has enabled cross-border collaboration and programming such as PEACE and Interreg? Given that the PEACE IV programme, for example, is now being rolled out and border county members of The Wheel are possibly considering applying, it calls into question the future of programmes such as this and the new situation’s impact on their design and effectiveness. The talk of a ‘hard border’ in Northern Ireland does little to build on the progress made since the peace process and could create community divisions. Again, nothing is certain. Attending the European Council summit in Brussels yesterday (29 June 2016), Taoiseach Enda Kenny advocated for maintaining the open border with Northern Ireland and stated his intent to keep the peace process intact. What will be key is for voluntary groups on both sides of the border to have their needs, and the needs of their communities, considered and addressed in the border negotiations.
Economic uncertainty, changes to EU funding and increased social tension in the UK puts the Irish charity sector at risk, even though there could be some opportunities arising. But our sector is used to flux and perhaps needs to be commended for its ability to creatively respond to challenges and crises beyond its control. Precarity and ambiguity in funding and policymaking makes for an agile civil society, well placed to engage with communities and move forward. As Brexit unfolds and the European project takes a hit, The Wheel encourages members around Ireland to extend an arm of friendship and support to our UK voluntary sector neighbours. Existing and new partnerships can be developed and ultimately, it is the needs of communities both at home and in the UK that must be tracked and responded to as much as possible.
Deirdre Finlay, European Programmes Coordinator, The Wheel - firstname.lastname@example.org
LINKS and SOURCES:
Non-Profit Quarterly: https://nonprofitquarterly.org/2016/06/24/historic-uk-brexit-vote-raises-countless-issues-for-nonprofits-civil-society/
Third Sector - Impact on Funding to UK Charities: http://www.thirdsector.co.uk/round-voluntary-sector-reaction-eu-referendum-result/policy-and-politics/article/1400119
Huffington Post - Article re, development sector: http://www.huffingtonpost.com/entry/brexit-could-cause-uk-charities-to-lose-over-200-million-every-year_us_576d6105e4b017b379f5c67b
Irish Times - Impact on Charities (from March 2016): http://www.irishtimes.com/news/world/uk/brexit-voices-how-would-the-uk-leaving-the-eu-affect-charities-1.2569589
European Movement Ireland: http://www.europeanmovement.ie/press-release-european-movement-ireland-statement-on-the-outcome-of-the-uks-eu-referendum/