Why worry about Brexit? The funding risks of inertia for UK CSOs

In 2016, UK CSOs received €356.9million in new development and humanitarian funding from the European Union (EU). Post-Brexit, this is all under threat and everyone in the international development sector needs to be aware of this. Inertia isn’t an option. UK CSOs need flexible mitigation strategies if they are to weather the current funding climate.

Research on complex funding challenges

Bond’s latest research shows the scale of the challenge many UK CSOs face. Funding may dry up to the point where some programmes are no longer viable, especially for sectors and countries that are not priorities for the other donors (such as DFID) that UK CSOs regularly work with.

Small and medium-sized CSOs, who are often more dependent on EU funding, are particularly vulnerable. But even those larger CSOs with “sister” organisations in EU member states are going to face substantial challenges. The skills, expertise and capacity that UK CSOs hold cannot simply be transferred to sister organisations in their federation.

Furthermore, organisations need to demonstrate a track-record of three years to be able to apply for EU funding. So even if UK CSOs are able to move their operations to (say) Ireland, a move alone won’t solve their woes.

Being eligible won’t be enough

Although there may be options for continued eligibility in some calls, the reality is that potential access is not indicative of future engagement. As the political climate increasingly indicates an acrimonious split from the UK, possible theoretical eligibility is no reassurance for those who have been working with EU funding for years.

Canadian CSOs have theoretical access to some funding calls, yet they receive almost no grants. Norwegian and Swiss CSOs show a slightly more optimistic picture, as their CSOs access some budget lines. But even their amount combined is less than half of what the UK current receives.

Losing policy influence is a real threat

The uncertainty around Brexit is reducing UK CSOs’ access to policy influencing (the subject of a separate Bond report), and also threatening their status as partners in joint EU bids. Some Bond members interviewed as part of this research reported being “left out” of conversations with EU CSOs, and were concerned about the potential risk of working with organisations based in the UK.

This Bond report looks only at the potential financial implications of Brexit on UK CSOs, which in itself is just a small piece of the conversation about the future role of UK CSOs in the EU and globally. But for a sector already rocked by currency devaluations, restrictive changes in fundraising regulations and a hostile media environment, it won’t offer any solace.

Check out Bond’s report on the impact of Brexit on EU funding for UK CSOs.