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Small and medium sized charities reported deficits of more than £300m in 2011

26 November 2012

Small and medium sized charities reported deficits of more than £300m in 2011, compared with an overall surplus of £325m in 2007 – according to an analysis of the latest accounts.

Research by the Charities Aid Foundation (CAF), which promotes charitable giving and provides financial services and social finance to not-for-profit organisations, found losses among small and medium sized charities have spiralled since 2007.

CAF's analysis of accounts lodged with the Charity Commission found that charities of all types with incomes of up to £1m a year reported total deficits of £306m in their financial year ending in 2011, compared with an overall surplus of £325m in the 2007 financial year.

The situation reported in 2011 had also markedly deteriorated from 2010, when small and medium sized charities reported an overall loss of only £20m.

Small and medium sized charities make up the majority of the nation’s charities – representing more than 130,000 of Britain’s 162,831 registered charities.

The CAF research found that:

  • Registered charities with incomes of less than £10,000 reported total losses of £111m in 2011, up from reported losses of £19m in 2007
  • Charities with incomes between £10,000 and £100,000 reported total losses of £113m in 2011, compared with a surplus of £33m in 2007.
  • Charities with incomes between £100,000 and £1m reported total losses of £83m in 2011 compared with a reported aggregate surplus of £311m in 2007.

This reduction in resources comes at a time when many charities face reductions in support from the public purse, reductions in giving and low income from any reserves or investments they have.

Among those charities reporting losses are those that work in education, poverty relief, sport and health. Some charities are being forced to cut services and cut staff numbers, where they employ any.

Last week, CAF and the National Council for Voluntary Organisations launched the Back Britain's Charities campaign to encourage government, businesses and individuals to get behind charities.

The campaign is calling for:

  • People to support charities through regular giving, regardless of how much time or money they can give.
  • The Government to modernise and promote Gift Aid and payroll giving so donations go further.
  • The Government to ensure that public bodies do not cut funding for charities disproportionately when making spending reductions.
  • Business to support charities either through donations, or through practical means.
  • Charities to work together with the Government to modernise and improve fundraising and enhance their impact, so that every pound given goes further towards helping beneficiaries.

John Low, Chief Executive of the Charities Aid Foundation, said: “The deepening losses being sustained by our nation’s small and medium sized charities are a great cause for concern.

“Many small and medium sized charities doing vital work in our communities are facing falling incomes at the very time that people are increasingly looking for their support.

“The vast majority of our charities are relatively small and do amazing work. But many are having to dip into their reserves to keep going, cut back on the work they do and lay off staff if they employ any.

“The situation is so worrying that we need the Government, business and the public to get behind Britain’s charities – so that they can survive and carry on their important work in these tough times.”

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