# Charities face £12.4 billion shortfall in income for year

- Link: https://fundraising.co.uk/2020/06/19/charities-face-12-4bn-shortfall-in-income-for-year/
- Published: 2020-06-19T07:43:37+01:00
- Author: Melanie May

**Charities face a £12.4bn shortfall in income for the year due to impact of coronavirus,
according to the Chartered Institute of Fundraising (IoF) and Charity Finance Group(
CFG).**

Following a [previous impact survey](https://www.institute-of-fundraising.org.uk/library/impact-of-covid-19-on-the-charity-sector-briefing-from-the/)
conducted in March 2020, just as lockdown

was beginning, [the new survey](https://www.institute-of-fundraising.org.uk/news/charities-are-facing-a-124bn-shortfall-in-income-for-the-year/)
carried out by [IoF](https://www.institute-of-fundraising.org.uk/home/), [CFG](https://www.cfg.org.uk/),
and [NCVO](https://www.ncvo.org.uk/), and supported by PwC found that respondents
were expecting a reduction of 24% to their total income for the year, which would
mean a £12.4bn loss of income if the average was applied to the sector as a whole.

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It also found that during lockdown (between 23 March – 12 May 2020):

 * Charities received 29% less income than they had budgeted for
 * 84% of charities reported a decrease or a significant decrease in their total
   income
 * 92% of charities reported a fall in trading income during the lockdown with just
   5% reporting that income from trading had increased
 * 20% reported that that their voluntary income had increased or significantly
   
   increased during lockdown
 * 15% of charities reported an increase or a significant increase in their total
   income

The performance of income sources varied widely with respondents reporting on average
that trading income was 72% lower than expected, and voluntary income 14% lower.
However, income from grants from trusts and foundations was 29% higher than expected,
and income from government in the form of grants and contracts was 51% higher than
expected.

When looking at the year ahead, charities:

 * Expect to see their total income significantly reduced, with their total income
   on average 24% lower than previously forecasted
 * Are planning on an average fall of 57% on trading income
 * Have revised their voluntary income for the year down by an average 42%

In total, 91% of the charities that responded are forecasting a drop in their budgeted
income with 56% believing it will decrease and 35% expecting a significant decrease.

Peter Lewis, Chief Executive of the Chartered Institute of Fundraising, said:

> “This new research shows that the impact of coronavirus is going to have a hugely
> significant impact on charity finances for the year ahead. With social distancing
> remaining in place for the foreseeable future, and an exceptionally difficult 
> time ahead for the wider economy, the fact that the charities who responded to
> the survey are planning for a loss of almost a quarter of their total income is
> extremely worrying.
> The government urgently needs to review and enhance its emergency support for 
> charities, with a further bespoke package of support, an extension to the Job 
> Retention Scheme that specifically supporting those charitable activities which
> are still unable to take place, or both.”

Caron Bradshaw, Chief Executive at the Charity Finance Group, also commented:

> “Charities are telling us that they are planning for a substantial decline to 
> their incomes for the year ahead, at a time when the need for their services has
> never been more acute. We calculate that drop to be in the region of £12bn. These
> survey results are strongly indicative of the scale of loss being suffered and
> is consistent with what our members and other data points are also telling us.
> “I cannot stress enough however, that this isn’t about the survival of the institution
> of charity or individual charities, but the devastating impact that this will 
> have on those who rely on the services charities provide. From providing food 
> to the most disadvantaged in our society, to supporting people through cancer,
> if charities are not there to meet the need, someone will have to pick up that
> work or that need will go unmet. It’s not about us it’s about them. Failing to
> invest in us now will be false economy and will let those most marginalised and
> disadvantaged shoulder the greatest fall out from this crisis.”

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