Brexit and Charities: Giving away the benefits of EU membership?

Brexit is now recognised by many as being far more complex and difficult than Leave campaigners said, or even understood. New problems, often in unexpected places, spring up every week.

One such is the crippling impact that Brexit could have on UK based charities, non-governmental organisations (NGOs) and international aid organisations such as Save the Children, Oxfam and the International Rescue Committee, as well as local charities across the country.

Current situation

Being located in a member state of the EU has provided major advantages to this sector which will be jeopardised, and therefore put the beneficiaries of their charitable projects at risk, at home and abroad.

In 2015 alone, British charities received over £253m worth of direct and shared investments from the EU. These include the Erasmus+ programme which funds projects such as the Royal National Lifeboat Institute’s ‘Lifeboat Crew Exchange’ scheme which develops the technical skills of RNLI volunteers. The training they receive can be passed on to volunteers in their own local crew when they return to the UK. Another example is the Elevate project which helps people in recovery from drug and alcohol addiction move into employment and change their lives for the better. This vocational education and training project was based on the successes of a work-based recovery programme developed by organisations such as NHS Greater Glasgow and Clyde, Glasgow Council on Alcohol and Glaswegian work placement company Light on the Path. All participants having taken part in this extremely successful project have remained substance-free.

Not for profit organisations also benefit from European Structural and Investment funds, such as the EU’s Regional Development Fund and the Social Fund and the financial value of this is quite considerable. For example in 2015, European funds granted a total of £9.3 million to six different charities, including the Prince’s Trust. In addition, the Common Agricultural Policy, better known for regulating and subsidising the agricultural industry, also supported the development of rural areas through charities, with a total of £27.1 million from the Agricultural Fund for Rural Development and £11.1 million from the Agricultural Guarantee Fund. Wildlife trusts, conservation and community projects received a total of 111 EU grants.

The Brexit impact within the UK charities sector

If the United Kingdom leaves the EU in 2019, UK charities will likely not be able to continue applying for funding from these EU programmes.

The Directory of Social Change has released a report examining the impact of Brexit on charities, and estimates that they risk losing up to £258.4 million in EU funding per year post Brexit, because NGOs needing to be legally established in an EU member state to be eligible. Although some foreign NGOs can become eligible, their funding is at significant risk because there is no guarantee that those currently receiving support would be automatically entitled to continue.

Sadly, this uncertainty has only been exacerbated by the UK government’s chaotic approach to the Brexit negotiations and is already creating considerable hardships for these organisations. According to Bond (the UK’s NGO network), civil society groups have already been declined long-term EU funding contracts since Theresa May triggered article 50 in March 2017. This also means that until there is more clarity as to what the UK government wants post-Brexit, UK charities which relied on UK funding for their longer term projects are unable to plan ahead.

According to the National Council for Voluntary Organisations, almost 5% of the charity sector’s workforce come from the EU27. The potential shortfall in EU nationals not being able to work or volunteer for our UK charities post-Brexit would be a great loss to the sector. For instance, medical research charities are concerned about losing access to specialist researchers from across the EU. Although they have made significant contributions in health, social care and other public services, the uncertainty about their future rights to stay in the UK means that many are leaving the UK, adversely affecting the many vulnerable people who rely on them. Furthermore, NGOs who organise exchange programmes and training in other countries, or who rely on volunteers from the EU27 to come frequently to the UK, will face extra challenges if freedom of movement to the UK is curtailed.

The Brexit impact beyond EU borders

The loss of EU funding will be felt particularly acutely for NGOs in the humanitarian and development sectors. The EU is the biggest aid donor in the world. Member states decided to pool together their humanitarian and development assistance for a good reason: it is a more effective way to help those most in need. The EU provides funding for projects which foster sustainable economic, social and environmental development, tackle global poverty and promote democracy, the rule of law and respect for human rights (see DG DEVCO). In parallel, the Commission’s emergency humanitarian aid unit ECHO funds programmes to save and preserve lives and lessen human suffering of those affected by both man-made crises and natural disasters.

The EU’s overall development funding totalled £52 billion in 2015. Oxfam, Action Aid, Save the Children, the World Wildlife Fund, the International Medical Corps and the International Rescue Committee (IRC) are recipients of tens of millions in ECHO funding. EU funding currently represents 10% of Oxfam GB’s income, for instance. However, even large organisations such as the IRC would not only need to have a legal presence in an EU member state post-Brexit, but would be required by the EU’s eligibility rules (which, of course, Britain shaped as a Member) to relocate their “centre of decision-making” to the EU in order to continue to receive EU funds. UK NGOs working alongside organisations who are receiving direct EU funding as subcontractors, which is common practice in the sector, may also need to comply with EU location rules, potentially multiplying the number of affected organisations still further.

If the UK decides to pull out of the European Development Fund, which is separate from the EU budget, then there is also a risk that a Conservative government will prioritise other issues over international development. According to Johannes Trimmel, President of Concord Europe, a confederation of 2,600 relief and development NGOs:

EU development spending will suffer from the loss of UK core contributions and, potentially, from political pressures to divert funding to security. There are already pressures on issues like migration and security and so I’m expecting additional investments will go to security, at the cost of others, and likely development is one area under threat.”

Regardless of the outcome of the Brexit negotiations, it is therefore going to be particularly important to ensure international aid and development do not fall by the wayside due to shifting political priorities.

Conclusion

If Brexit goes ahead, it will present a very real risk of UK based NGOs, charities and humanitarian aid organisations losing a significant amount of funding they receive. Consequently, the employees and volunteers who run these organisations, and ultimately the people they help, all stand to lose from the UK’s disengagement from the EU. It is critically important that a proper assessment of the impact of their potential change of status under existing EU grant rules is undertaken.

As the Brexit negotiations continue, the government should listen to the concerns of NGOs and make the case for international cooperation, multilateralism, efficiency and generosity, rather than falling into the trap of protectionism, border control and aid spending cuts.

With all the sound and fury of the Brexit debate, it is important that charities and NGOs, working locally, nationally and internationally to support some of the most vulnerable people in the world, do not themselves become victims.

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