Results from the Scottish Third Sector Tracker show that charities are at crisis point
New research reveals that 81% of charities and voluntary organisations are facing financial challenges, putting the essential services and support that they deliver at risk.
In response, the Scottish Council for Voluntary Organisations (SCVO) is calling on the Scottish Government to use the Medium-Term Financial Strategy on 25 June to provide the sector with the financial stability it desperately needs to continue supporting people and communities across Scotland.
Results from the Scottish Third Sector Tracker show that many charities are at crisis point - facing a triple threat of rising demand, falling income and rising operational costs.
Only 13% of voluntary organisations that responded had confirmed all their funding for the next financial year, and more than a third had no funding confirmed at all.
Meanwhile, 60% reported that financial pressures were having a moderate or severe impact on their ability to deliver services, with more than one in 10 having no choice but to stop one or more strands of their work.
More than one in 10 of the voluntary organisations who took part face redundancies, and 20% are postponing or cancelling planned recruitment.
And finally, more than half of voluntary organisations said they are relying on reserves for their short-medium term survival, with the majority of those reporting that this is unsustainable.
All this undermines the sector’s ability to plan and deliver services and causes extreme stress for staff.
Other research by SCVO, also published today, finds that while the Scottish voluntary sector has shown remarkable resilience in the face of significant challenges, from the Covid-19 pandemic and rising costs to increasing demand and workforce pressures, persistent financial insecurity is chipping away at this and poses a serious threat to long-term resilience.
Anna Fowlie, SCVO chief executive, said: “Financial concerns have been prevalent in the voluntary sector for some time, but the impacts that we are starting to see in terms of service closures and redundancies are increasing much faster than before.
“We are calling on funders, including the Scottish Government, to recognise the scale and the impact of these financial difficulties before it is too late.
“SCVO and its members have welcomed the Scottish Government’s commitment to fairer funding for the sector, but progress has been frustratingly slow. The Medium-Term Financial Strategy gives the Scottish Government the opportunity to provide the financial certainty to Scottish Government departments and local authorities to enable them to provide that certainty in turn to the voluntary organisations that they fund.
“Scotland’s 46,500 voluntary organisations are integral to delivering the Scottish Government’s priorities, and all parts of government must be empowered and encouraged to properly invest in the sector.
“The upcoming Medium-Term Financial Strategy must recognise, resource and support the voluntary sector and the essential services and support we provide people and communities through a longer-term commitment to multi-year funding and ensuring grants and contracts cover the full costs of employing staff.
“The Scottish Government has committed to achieving fairer funding for the voluntary sector by 2026. It must act in the Medium-Term Financial Strategy if it is to have any hope of fulfilling this promise.”
