Almost half (47%) of UK charities are expecting a difficult winter with increased demand for their services. However, the same proportion have had to reduce activity, with 1 in 4 so far also cutting jobs as a result of Covid-19, according to a survey.
The latest Covid Charity Tracker by Pro Bono Economics shows that service delivery and fundraising are the areas seeing the most job cuts. Overall, 32% have either made or are making job cuts to their service delivery functions, and 15% to fundraising – rising to around 1 in 5 medium-large charities.
Overall, 94% say that Covid-19 has posed a financial challenge, with drops in earned income, public donations, and money associated with fundraising activity like lotteries and auctions especially problematic. More than half of the survey respondents say public donations have fallen, with one-in-five reporting a drop in such income of more than 25%. Funding from public sector contracts, trusts and foundations however has broadly held up to date.
In response to the financial challenges faced, 48% say they have significantly reduced activity, with the majority seeking additional support. 68% said they had applied for financial help from government (including furloughing staff) with 72% seeking other additional sources of funding.
The survey, conducted ahead of the government’s announcement on a new wage subsidy scheme, found that more than one-in-four charities (29%) had already made redundancies, with one-in-five expecting to make cuts once the government’s Job Retention Scheme is withdrawn at the end of October. This was more common among larger charities at a quarter of medium-large charities compared to just 6% of small charities.
Just over a quarter (27%) have also renegotiated rent, sold property or reduced office space.
Overall, almost half (47%) of UK charities have also revised down their financial forecasts over the last two months in anticipation of a tough winter ahead. Among small charities, this rises to 58%, and sits at 42% for medium and large organisations.
Only 8% of small charities and 5% of medium-large charities said they had not faced any financial challenges as a result of Covid-19.
Matt Whittaker, CEO of Pro Bono Economics, said:
“While some parts of the economy are on the up after a tough first half of the year, charities have yet to see the light at the end of the tunnel. The updated jobs support package set out by the Chancellor will likely provide some relief for the sector, but against a backdrop of an economic recession, and the looming tightening of lockdown, for many organisations it will do little to square the circle of rising demand for help and shrinking capacity – with very serious consequences for all of us.”
Caron Bradshaw, Chief Executive of Charity Finance Group, said:
“The findings of our latest survey are not surprising but are deeply troubling. Social change organisations play an enormous role in our communities, providing crucial services to millions of people every day, nationwide. A significant number now face an increasingly uncertain future. Our capacity to deliver for both the short and long term is shrinking fast at a time it is never more needed.
“We are calling on government to take action now to address the fragility of the organisations working at the heart of our communities; working on the frontline, helping to mitigate the worst effects of the Covid-19 crisis. We must ensure that charities and social enterprise are supported to meet the public need and sustain healthy communities.”
The September 2020 PBE Covid Charity Tracker was conducted in partnership with the Chartered Institute of Fundraising and the Charity Finance Group between 15 and 20 September. 224 charities responded to the survey.
Peter Lewis, Chief Executive of the Chartered Institute of Fundraising, commented:
“This research further confirms the significant scaling back of charitable services and activities just when people across the UK need them most. Fundraised income continues to be hit despite the valiant efforts of our members and the fundraising community around the UK, and tragically many fundraisers are facing redundancy as their organisations are forced to make incredibly difficult decisions. Politicians and policy makers need to act now to safeguard vital charity-delivered services and activities around the UK.”
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