# Charities face £10.1 billion funding gap over next six months

- Link: https://fundraising.co.uk/2020/06/10/charities-face-10-1-billion-funding-gap-over-next-six-months/
- Published: 2020-06-10T10:41:42+01:00
- Author: Melanie May

**UK charities are facing a £10.1 billion funding gap over the next six months as
a result of Covid-19, with incomes expected to drop by £6.7 billion at the same 
time as demand for their support rises by the equivalent of £3.4 billion, according
to new analysis from Pro Bono Economics (PBE).**

[The analysis](https://www.probonoeconomics.com/sites/default/files/files/06%20Jun%2002-03%20results.pdf)
draws on [Pro Bono Economic](https://www.probonoeconomics.com/)’s latest weekly 
charity tracker survey, covering 261 civil society organisations across the UK. 
88% of those responding say they expect Covid-19 to reduce their income over the
coming six months relative to pre-crisis plans, and well over half (59%) say they
have had to significantly reduce their activity in response.

Many charities have sought additional funding, with half saying they have applied
for emergency support from non-government sources and more than one-in-three (37%)
applying for a share of the £900 million of support earmarked for the sector by 
the government. However, PBE points out that with these sources not available to
all, one-in-ten (12%) of charities say they expect to cease operating altogether
before the start of December.

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Simultaneously, there has been a sharp increase in demand for the services of many
charities with the survey showing that 72% expect demand to rise over the next six
months in response to the crisis. To meet this surge in demand, PBE estimates that
the sector would require an additional £3.4 billion of resource, meaning that the
estimated £6.7 billion income hit is generating an overall funding ‘gap’ of some
£10.1 billion.

PBE says that small charities, with incomes of less than £500,000 a year, are especially
exposed to the income squeeze. Its survey suggests that close to two-in-three (63%)
in this group have already reduced their activity in a significant way, with 45%
saying they have grown more pessimistic about their situation over the past week,
and that one-in-eight (13%) expecting to go out of business within six months.

Matt Whittaker, Chief Executive of Pro Bono Economics, commented:

> “If we don’t funnel more resource to charities in the coming weeks, it’s clear
> that many will struggle to survive.
> “The fact that one-in-ten charities expect to go under in the next six months 
> is on its own a shocking enough statistic. But once we add in the significant 
> constraints being faced by many of those organisations that do survive, we’re 
> looking at a huge hit to the overall capacity of the sector – with implications
> for all of us.
> “The significant scale of the support being provided by government is of course
> very welcome – as is the generous help being provided by the public in the form
> of donations and volunteering – but it’s not enough. Charities’ incomes are under
> great strain at precisely the same time that demand for their assistance is rising,
> generating a £10.1 billion funding gap that translates into huge unmet demand.”

Roberta Fusco, Director Policy and Communications, CFG on behalf of a coalition 
of charities coming together in the [#NeverMoreNeeded](http://www.nmn.org.uk) campaign,
also commented, saying:

> “The figures are highly concerning and are broadly in line with emerging findings
> from our joint survey of charities with the IoF, NCVO and PWC, full details of
> which we hope to release next week.
> “As we look towards planning for post Covid-19 recovery and the impending economic
> crisis, it’s essential to the nation’s economic and social recovery that government
> invest in and use civil society expertise, knowledge and networks to help rebuild.
> The work of charities is never more needed to support people and communities hardest
> hit by Covid-19.
> “Recent research shows that the original projected loss of income to the sector
> of £4.3bn to May 2020 was largely correct and that set against the government’s
> response to date of £750m, the gap is ever widening and impact on beneficiaries
> felt ever more keenly precisely at a time when charities are needed the most and
> have the vital services that people need.”

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