Statutory cuts on the way say charities - but more anticipated from fundraising and other streams
Charities are predicting a troubled year ahead – with many anticipating cuts in government income.
Two thirds of organisations polled across the UK said they expected statutory cash – including that given by councils – to drop in the next year, with uncertainty over the outcome of the imminent general election cited as a factor.
However, it was not all bad news - respondents were more optimistic about the outlook for funding from other sources, with over half saying they expected increases in donations, corporate giving and from non-charitable trading.
Accountancy firm Baker Tilly polled 120 charities for its poll.
Charities in Scotland will need to innovate and invest in fundraising as well as ensure they have robust financial controls and sound governance
Despite cautious optimism about the prospects for the recovery of the UK economy, 67% said that sourcing new revenue streams was among their biggest funding challenges, and competition for funding appears to be tougher than ever.
Almost 60% said increased competition was one of the most significant changes they had experienced in the last year, a rise from 46% in the same survey carried out two years ago.
Other concerns highlighted included contracts being renegotiated late or for short term periods, which is putting greater pressure on charities trying to ensure long-term sustainability.
Janet Hamblin, Baker Tilly’s head of charities in Scotland said: “Overall, our survey suggests that Scottish charities have so far been able to adapt to cope relatively well over the last few years despite government cutbacks and funding remains broadly stable.
“However, the reported increase in competition for funding and the recognition that sourcing new funding streams is getting even harder should perhaps set alarm bells ringing for some.
“Many charities in Scotland will therefore need to innovate and invest in fundraising as well as ensure they have robust financial controls and sound governance.
“Potential funders will also be looking for hard evidence of effectiveness and impact, and those that can’t deliver might find themselves at a disadvantage.”
