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Income has dropped for 30% of charities, says Charity Commission

The Charity Commission’s latest Economic Survey of Charities in England and Wales reveals that more than half of charities are now feeling the impact of the recession.
In September 2008, 38% of charities surveyed by the charity regulator said that they had been hit by the credit crunch; now 52% say they have been hit by the recession. Of these, 58% have experienced a decrease in income.
The majority (64%) of charities with an annual income of over £1 million say that they are concerned that their services or funding might be greatly affected.
The recession is hitting smaller charities harder. Charities with an annual income of £1 million or more were less likely to have experienced a reduction in income than the other charities – 46% had done so. For charities with an income of between £100,000 and £999,000 the figure was 65% and 60% for the smallest charities (those with an income of under £10,000).
However, only a minority of charities (32%) say that they have taken steps to combat the effects of the downturn. A mere 3% of charities say that they have considered collaborating with another charity and 3% have considered merging.
Dame Suzi Leather, Chair of the Charity Commission, said she was surprised that not all charities are putting measures in place to protect their work and their funds.
She said: “It is very surprising that more charities are not considering collaboration with others, as this can help them share expertise and costs. Some charities report that they have drawn on reserves in response to the economic pressure. Although this is not a step that should be taken lightly, it is important to remember that reserves are collected for this purpose – now is the rainy day charities have been saving for”.
The survey of 1,003 charities in England and Wales was carried out by Carol Goldstone Associates in February 2009.
The Charity Commission is providing advice and support to charities via its website and helpline (0845 300 0218). It is also involved in a number of projects relating to the economic downturn, including working with umbrella bodies and the Office of the Third Sector (OTS) to ensure that charities are kept up-to-date and provided with the information they need to react to the changing financial situation; and participating in the regional events that the OTS is arranging to offer advice to charities.