Sector Snapshot: Cost of Living Crisis Challenges and Opportunities for Heritage Organisations

27th April, 2023

Based on a Cost-of-living focus group held on 5th April 2023. Facilitated by Delphine Jasmin-Belisle, Head of Development & Membership, The Heritage Alliance

A series of focus groups was run at the end of the Rebuilding Heritage project, in March to April 2023, to explore current challenges and opportunities for heritage organisations. The findings from each focus group are presented as a series of ‘snapshots’ of sector views and experience.

To see all of the sector snapshots, click here.

Purpose of Focus Group

To explore the impact of the cost-of-living crisis on heritage sector organisations and to look ahead to how the sector’s resilience can be developed and supported in the future.

Twelve people attended the focus group. They were drawn from different parts of the UK, different types of heritage organisation, and different roles. The discussion focused on the impact of increases in cost-of-living, measures taken to mitigate challenges, training or support to help address challenges, opportunities that have arisen over the last six months, and the benefits of hindsight and areas for future support.

 

Impact of Increases in Cost-of-Living

To start the session, people were asked to identify the three greatest challenges arising from recent increases in cost-of-living (and inflation). Despite the range of different organisations taking part in the focus group, there was consistency in the challenges that were highlighted which included:

  • Increased costs, especially: transport, food (affecting catering costs), fuel and building materials
  • Costs increasing at a rate that can’t be passed on to customers
  • Reduction in income because reliant on people’s disposable income, which has reduced
  • Smaller number of visitors resulting in smaller spend
  • Uncertainty about the stability of the domestic market
  • Salaries for staff and the expectation of pay rises
  • Sustaining membership levels, especially fees paid by individuals
  • Impact on in-person events of increases in travel and accommodation costs
  • Rises in fixed costs such as insurance and audit
  • Impact on longer-term maintenance costs if heating/maintenance are reduced in short-term and result in damage to collections or building fabric

Tactics to Mitigate Challenges

Discussion about the different ways of mitigating the impact of these challenges revealed creative approaches, many of which are highly people-centred.

  • Think about how to improve quality of life beyond salary levels, for example other benefits that you can offer.
  • Embed hybrid working where possible.
  • Improve diversity of membership through a sponsored diversity scheme.
  • Freeze membership rates or event fees to retain engagement, or offer sponsored places.

Other suggestions focused on methods of reducing costs:

  • Switch to renewable energy (if an option) to reduce outlay.
  • Encourage volunteers to become more involved with the organisation’s activities.

There were also suggestions that focused on taking a different outlook, or being more adaptable:

  • Live with a deficit budget for longer.
  • Use reserves for longer and recognise that this will require a future business growth plan.
  • Identify and focus on the difference between fixed costs and variable costs to understand where proactive and reactive changes can be made (for example in response to changes in visitor numbers)

The theme of this focus group aligns with a wider piece of research on the impact of cost-of-living that is being carried out by The Heritage Alliance on behalf of Historic England. Participants were asked which of the six themes that had been identified through the research were the most pressing for them. Their responses are shown in the graph below:

Training and Support

Members of the group were asked if they had accessed any training or support to help mitigate the impact of increases in cost-of-living. The responses were varied but they all related to generic skills (i.e. not specific to operating in the heritage sector). People talked about training that helped them to embrace a more entrepreneurial approach, support to help to develop different methods of income generation, training to help improve and diversify recruitment practices, financial planning techniques, and health and safety courses.

It was also interesting to hear that learning from each other is a popular and productive way of gaining new knowledge and developing networks. As one focus group member said, “None of us is as smart as all of us.”

In terms of future training and support needs, focus group members agreed that these non-heritage skills need support; the generic skills involved in running a charity or business are the biggest gaps for the sector.

Opportunities Arising Over the Last Six Months

Although change can bring challenge, it can also bring opportunity. Focus group participants were asked whether the past 6 months had presented any opportunities for their organisation. Most of the responses involved opportunities to do things in a different way:

  • The opportunity to build long-term relationships with members through holding prices and offering annual passes.
  • The opportunity to prioritise and focus on income diversification.
  • The opportunity to connect to audiences more closely and generate better data for service development or advocacy purposes.
  • The opportunity to use heritage sites for other activities, such as community gatherings.
  • The opportunity to show greater compassion and flexibility in conditions for staff and volunteers.
  • The opportunity to focus on what works and what does not work – and make changes.
  • A greater emphasis on re-using and recycling.

With the Benefit of Hindsight

The next discussion prompt was, “With the benefit of hindsight, what do you wish you had in place 6 months ago (in terms of organisational building blocks or infrastructure) that would help you now?”

Some responses related to actions that would have eased time pressures:

  • Cleared non-essential things from my diary – not thinking I could do it all.
  • Allowed greater lead-in times for the promotion of events and conferences.

Whilst other responses related to aspects of financial preparation:

  • Set a lower break-even point.
  • Prepared trustees so they understand budgets, forecasting and how to build a business case.
  • Focused more on energy and the use of sustainable/renewable methods.
  • Encouraged members to think more about fuel costs and how to reduce them.

If valuable lessons are to come from the last two years, it is perhaps the need to build flexibility into plans and decision-making processes that is most important. Adaptability is a key component of resilience.

What’s on the Horizon?

Finally, people were asked to shift from reflecting on the past to thinking about the future. They were asked, given their roles as umbrella organisations, to think about the areas in which the sector will need support in the future. Whilst energy costs and the need to work sustainably are seen to be of ongoing importance over the next 2-5 years, the other major theme related to building connections. This includes connections:

  • With the next generation of volunteers to build long-term community connections.
  • With wider audiences through digital connectivity
  • With staff through support, benefits and a focus on well-being.
  • Through the use of technology to deliver high-quality hybrid events.
  • Between online platforms to support services to members.

People also identified the need to be pragmatic about the toll of the last 2-3 years and consider the skills and knowledge needed to enable mergers, to share costs and services or to deal with closures and orphaned collections. They also stressed the importance of looking after people – staff, leaders, volunteers and trustees – who have worked through two back-to-back crises (pandemic, cost-of-living) with the potential of a third (climate emergency) following swiftly.

We hope you will gain inspiration and ideas from this snapshot of the impact of increases in cost-of-living costs on heritage sector organisations, and we thank the facilitators and focus group participants for sharing their views and experience.

Rebuilding Heritage was a UK-wide support programme designed to help heritage organisations navigate the challenges presented by COVID 19 (July 2020-September 2022) and challenges arising from increases in cost-of-living (November 2022-April 2023).

The project was coordinated by the Heritage Alliance, funded by the National Lottery Heritage Fund and delivered in partnership with the Chartered Institute of Fundraising, Clore Leadership, Creative United and Media Trust, with support from additional providers.

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