NPC research highlights charity & public sector vulnerability to Covid-19 crisis

Melanie May | 24 March 2020 | News

Twenty pound notes. Photo: Pixabay.com

Charities and public services are more vulnerable to Covid-19 crisis than is currently understood, according to research by charity think tank NPC.
The NPC research found that the majority of charities with public sector contracts cross subsidise those contracts with other funds, such as donations from the public.
54% of the charities NPC surveyed delivered public sector contracts and 59% of these said they are cross subsidising that contract with money from other sources such as fundraising. And, it found, as fundraising, trading, or investment income fall – with NCVO reporting charities are set to lose more than £4bn over 12 weeks as a result of the coronavirus outbreak – charities will not be able to afford to cross subsidise these contracts.
This, the research suggests, may mean they are unable to deliver them, and vital services fail, or government funding is placed under more pressure as it has to find a short notice new provider.
The early headline results come from NPC’s State of the Sector 2020 report and have been released to help funders and charities understand the underlying challenges in the charity sector, and help shape how government and funders target their support to charities.
Other findings include:

NPC CEO Dan Corry said:

“Charities are mobilising to help thousands of people across the country but they are also crying out for more help and support. Their income is collapsing just as people’s need to use them starts to grow. Our research reveals some underlying problems in the sector, which the crisis will undoubtedly exacerbate. The response both from policymakers and the sector to the crisis needs to take this pre-existing weaknesses into account, and make sure issues like the lack of core funding, the weaknesses on using digital technology and the cross subsidy of contracts are not overlooked, or we could see charities fail and thousands of vulnerable people put at risk.”

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The research was funded by PwC, Barrow Cadbury Trust, Lloyds Bank Foundation and Odgers Berndtson.
 
 

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