A survey of local charities has shown that only 47% are confident of financial stability five years down the line
More than half of local charities fear they will not still be around in five years’ time.
A survey of almost 700 smaller organisations has revealed that only 47% are confident that they will be financially sustainable in in 2023.
The study - carried out by support organisation Localgiving - has shown that demand is growing for the services provided by local groups, but traditional income streams are drying up.
The research, entitled The Local Charity and Community Group Sustainability Report, saw 686 UK charities questioned between July and October last year.
More than three-quarters of charities surveyed (78%) said they had experienced a rise in demand for their services over the past year.
The vast majority (82%) of groups said they are confident of being financially stable in 12 months’ time, but the figure plummets to 47% after a five-year period.
More than half (56%) of respondents said that generating income and financial sustainability are their biggest worries, and 29% are concerned that they are over reliant on a single funding stream.
Seven in 10 respondents said they were concerned that their organisations did not have the requisite skills to run successful fundraising campaigns, the report says.
The effects of Brexit are also examined: with 40% of organisations saying they are unsure about what effect leaving the European Union will have on their finances. Only 2% believed Brexit will have a positive effect on their finances or those of their beneficiaries.
Chris Dormer, head of business development at Localgiving, said that the report shows that many smaller charities feel they are close to breaking point.
He said: “As the state retreats, organisations have seen a year-on-year rise in the demand for their services. And whilst this year we have seen a significant drop in the number of organisations who have experienced a reduction in staff, we continue to see that organisations are over-stretched and underresourced.
“The majority of organisations are unsure that they can sustain themselves over the next five years and do not have the capacity to invest in their long-term future, by building new skills to help to diversify income streams or making operational processes more efficient.”
Report author Lewis Garland added: "Our report has revealed a sector stretched well beyond its capacity.
"Local charities have been expected to fill the gaps left by public sector cuts, while simultaneously competing for dwindling funding opportunities.
"If the sector is to survive, let alone flourish, it is essential that local charities are actively included in key decision-making processes, both at the local and national level. Furthermore, we must find ways to increase and diversify the funding and support available to these groups."
