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Economic climate could see almost half of UK NGOs cut operations

Melanie May | 9 October 2020 | News

Around half of UK NGOs risk having to cut operations, with smaller organisations at particular risk of closure, due to the current situation, according to Bond research.
A Bond survey of 93 organisations shows that Covid-19, Brexit, the recession and cuts to official development assistance could see 48% of NGOs ceasing operations that support marginalised communities, with 29% of small NGOs and 64% of medium NGOs at risk of closing by 2023. Larger organisations are also at risk with a quarter unable to confirm their ability to operate beyond the next two years.
Stephanie Draper, CEO of Bond, said:

“The whole world is facing difficult times ahead, and this survey gives us a stark and clear picture of what’s to come for both NGOs and the communities they help.  Millions of people have been pushed even closer to the edge by this pandemic.  They depend on NGOs, in the UK and internationally, for the basics – clean water, healthcare, sanitation and food.”

Overall, 65% expect their income to fall in 2021-22, with just over a quarter of all organisations surveyed anticipating falls in income of over 20% in 2021-22.  72% of small organisations and 56% of medium organisations expect income to fall.
Bond also found that just over half of organisations have experienced cuts as a result of the Foreign, Commonwealth & Development Office cutting the Official Development Assistance budget this year due to the drop in Gross National Income (GNI).
Job losses across the sector are expected to continue, with almost half (46%) of NGOs stating that they had either made or were likely to make staff redundant. Jobs that appear particularly vulnerable are those involved in programme delivery – already cut by 53% of organisations, admin and finance – cut by 51%, and public fundraising, cut by 41%.  UK based roles, junior roles and fixed-term contracts look likely to be most affected.
Despite 49% of organisations making use of the government’s furlough scheme, only 11% said they would be making use of the replacement scheme once the furlough scheme finishes at the end of October.
Draper added:


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“Small NGOs are particularly vulnerable.  We would ask that the government set up a £10m relief fund to help small NGOs so that they can continue to support their local partners and the communities they work with. If we don’t, we risk losing both specialist organisations, but also charities that are the heart of local communities across the UK.”