New research by Pro Bono Economics has shown the challenges organisations face over the winter
Charities face a gloomy winter, new research has claimed.
As new restrictions are announced by government in preparation for a second wave of Covid-19, over half of charities warn demand for their services may outstrip their ability to deliver - suggesting many people will be left without access to vital services they came to rely on during the previous lockdown.
In June, Pro Bono Economics estimated the sector was facing a £10.1bn funding gap. Since then, almost half (47%) of the UK’s charities have revised down their financial forecasts over the last two months in anticipation of a tough winter ahead, according to the latest Covid Charity Tracker published by Pro Bono Economics, in partnership with the Institute of Fundraising and the Charity Finance Group.
Nearly all (94%) charities say that Covid-19 has posed a financial challenge, with drops in earned income, public donations, and money associated with fundraising activity like lotteries and auctions proving especially problematic. More than half of the survey respondents say public donations have fallen, with one in five reporting a drop in such income of more than 25%. However, funding from public sector contracts, trusts and foundations has broadly held up to date.
The overall drop in charity income has forced organisations to make cuts to the frontline support they offer. The survey, which was conducted ahead of the announcement on a new wage subsidy scheme, found that more than a quarter of charities had already made redundancies, and one in five expected to make cuts once the government’s Job Retention Scheme is withdrawn. Among those reducing their headcount, 59% say that service delivery functions such as helplines, events and training are bearing the brunt. Fundraising capacity is also being cut, with 19% of those who are shedding jobs saying that fundraising teams are most likely to be affected.
Matt Whittaker, chief executive of Pro Bono Economics, said: “While some parts of the economy are on the up after a tough first half of the year, charities have yet to see the light at the end of the tunnel. The updated jobs support package set out by the chancellor yesterday will likely provide some relief for the sector, but against a backdrop of an economic recession, and the looming tightening of lockdown, for many organisations it will do little to square the circle of rising demand for help and shrinking capacity – with very serious consequences for all of us.”
Caron Bradshaw, chief executive of Charity Finance Group, said: “The findings of our latest survey are not surprising but are deeply troubling. Social change organisations play an enormous role in our communities, providing crucial services to millions of people every day, nationwide. A significant number now face an increasingly uncertain future. Our capacity to deliver for both the short and long term is shrinking fast at a time it is never more needed.
“We are calling on government to take action now to address the fragility of the organisations working at the heart of our communities; working on the frontline, helping to mitigate the worst effects of the Covid-19 crisis. We must ensure that charities and social enterprise are supported to meet the public need and sustain healthy communities.”
Peter Lewis, chief executive of the Chartered Institute of Fundraising, said: “This research further confirms the significant scaling back of charitable services and activities just when people across the UK need them most. Fundraised income continues to be hit despite the valiant efforts of our members and the fundraising community around the UK, and tragically many fundraisers are facing redundancy as their organisations are forced to make incredibly difficult decisions. Politicians and policy makers need to act now to safeguard vital charity-delivered services and activities around the UK.”