Are UK charities ready for the storm ahead?

A couple of years ago, New Philanthropy Capital polled the British people on what they thought of charities. It made tough reading for development NGOs here.

When people imagined small, community-led groups doing a bit of local work, they felt quite positive about charities. But when people were thinking about wealthy, international organizations instead, their opinion of the whole charity sector dropped significantly.

Most — if not quite all — our development NGOs fall into that latter category. In a sector dominated by small organizations scraping along without much cash, the leading NGOs are very wealthy indeed. A big chunk of that money comes from the U.K. government’s Department for International Development to deliver its services abroad.

Charity accounts can be a bit unwieldy when you want specific details, but they make clear that DfID is a multimillion pound donor to our major aid charities. Save the Children UK says it received 120 million pounds ($158 million) from DfID in 2013-2014. Oxfam’s 2015 accounts for the U.K. show 45 million pounds for various DfID projects, and the British Red Cross 26 million pounds. Millions more go to other charities in the field. This is serious money.

All of which gives us a sense of how much the government relies on these organizations to try and realize its development aims. But we also start to see the difficulties which may confront them not far down the line.

One challenge will come from a potential shift in the government’s attitude to development. When David Cameron ascended to head the Conservative Party, and then to become prime minister in 2010, it was on the back of a “modernization” process.

The law to commit 0.7 percent of gross national income to the aid budget every year was part of a political package to attract moderate voters to Cameron, which also included warnings about climate change and promises to better understand troubled children.

It worked — but it’s over now. Cameron has gone, and most of his modernizing ministers have gone with him. His replacement in the top job, Theresa May, is a very different leader looking for a very different sort of political positioning. As a result, no one seems to know what will happen to the 0.7 pledge. For all the difference that the spending pledge may have made for the developing world — and DfID projects have certainly achieved incredible things — there is no guarantee that the pledge will survive now it is past its political usefulness.

In addition Priti Patel, the new cabinet minister taking charge of DfID, has previously expressed deep public skepticism about the department and its role. If she carries her skepticism with her to the ministerial hot seat, it is likely to herald a new political reality, where money may not flow so smoothly and where harder questions might be asked of charities getting that money. (It should be noted, though, that few cabinet ministers choose to abandon their spending powers. Devex has already drawn attention to the emergence of “a reassuringly Greening-esque tone” from Patel, referring to her pro-development predecessor).

So the question is not whether there will be newfound pressure on aid charities. There will almost certainly be some. The question is how they step up to and meet this challenge.

In the first instance, it will be more important than ever to demonstrate that DfID, and by extension the taxpayer, is getting value for money. Aid charities already talk a very good game on this — their websites and publications are full of joyous case studies and happy faces to illustrate the good they do — but a more skeptical government is likely to demand something much more robust in return for big contracts.

And quite right too. This applies across the board. DfID, and the organizations paid to deliver services on its behalf, should be looking much more directly at the impact its money achieves.

A report this May from the aid watchdog Independent Commission for Aid Impact does a neat job of showing the size of the task at hand. The report looked at what DfID had achieved in its work improving the quality of water, sanitation and hygiene in the developing world between 2011 and 2016, a key focus for the department.

It is complimentary about the sheer number of people to whom services had been delivered (more than 60 million), but it admits that it can reach few if any conclusions about the lasting impact of DfID’s programs: “From the evidence available, we cannot reach conclusions as to where and to what extent these impacts are occurring. Impact data is not routinely available at the program level. Nor is it aggregated at either the international or the country level. Around half of the programs in our sample planned to conduct an external evaluation of some type, but many are not set up to generate the evidence that would allow impact to be measured.”

To put this another way: DfID has spent nearly three-quarters of a billion pounds on water and sanitation work in five years, but it can’t say whether this has brought a lasting solution for the communities on whom the money has been spent.

Is it easy to demonstrate impact on complex, multilayered projects? No. Is it essential? Yes.

It isn’t hard to imagine one way that a new, skeptical secretary of state might react to such reports. If DfID is to justify its spending then the department and its partners, including all those NGOs, have to show what they are achieving. Not just in the number of hours worked or how many people have received a service, but what sustained difference it makes to their lives.

Get this right, and they may be in a stronger position to weather some of the storms ahead.

For more U.K. news, views and analysis visit the Future of DfID series page, follow @devex on Twitter and tweet using the hashtag #FutureofDfID.